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This version was current from December 15, 2008 to October 31, 2009.
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C.C.S.M. c. B40
The Biofuels Act
|Table of Contents|
(Assented to December 4, 2003)
WHEREAS it is in Manitoba's economic and environmental interests to encourage and support the production and use of cleaner fuels, such as ethanol and other biofuels;
THEREFORE HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:
The following definitions apply in this Act.
(a) an ester-based oxygenated fuel that is derived from vegetable oils, animal fats or other biomass material; or
(b) a prescribed renewable fuel that may be used to power a diesel engine or for heating. (« biodiesel »)
"biodiesel sales mandate" means, for a prescribed motive fuel or class of motive fuel, the prescribed proportion of the total volume of that type of fuel sold by a fuel supplier that must be biodiesel in order for the fuel supplier to avoid a penalty under section 7. (« quota des ventes de biodiesel »)
"biofuel" means denatured ethanol, biodiesel and any other prescribed fuel derived from biomass material. (« biocarburant »)
"blended biodiesel" means a blend of biodiesel and a prescribed motive fuel or class of motive fuel. (« biodiesel mélangé »)
"blended biofuel" means gasohol, blended biodiesel or any other blend of biofuel and one or more of the following:
(b) a prescribed motive fuel or class of motive fuel. (« biocarburant mélangé »)
"denatured ethanol" means a blend of
(a) ethyl alcohol derived from renewable or recurring sources such as grain or biomass material; and
(b) up to 5% gasoline or other prescribed denaturant. (« éthanol dénaturé »)
"denatured ethanol sales mandate" means the prescribed proportion of the total volume of gasoline and gasoline-based fuels sold by a fuel supplier that must be denatured ethanol in order for the fuel supplier to avoid a penalty under section 7. (« quota des ventes d'éthanol dénaturé »)
"director" means the Deputy Minister of Finance or any Assistant Deputy Minister of Finance. (« directeur »)
"Ethanol Fund" means the Ethanol Fund established in section 6.4. (« Fonds d'aide à la production d'éthanol » ou « Fonds »)
"fuel supplier" means
(a) in respect of the sale of biodiesel,
(i) a collector under The Motive Fuel Tax Act, and
(ii) a deputy collector under that Act who purchases a prescribed motive fuel or class of motive fuel for resale from a person other than a collector; and
(b) in respect of the sale of denatured ethanol,
(i) a collector under The Gasoline Tax Act, and
(ii) a deputy collector under that Act who purchases gasoline for resale from a person other than a collector. (« fournisseur de carburant »)
"gasohol" means a blend of
(a) gasoline; and
(b) denatured ethanol;
that meets prescribed specifications. (« gazohol »)
"licence" means a licence issued under this Act to manufacture a biofuel. (« licence »)
"minister", except where it refers to the Minister of Finance, means the minister appointed by the Lieutenant Governor in Council to administer this Act. (« ministre »)
"motive fuel" means a motive fuel as defined in section 1 of The Motive Fuel Tax Act. (« carburant »)
"person" includes a partnership. (« personne »)
"prescribed" means prescribed by regulation under this Act.
The purposes of this Act are
(a) to encourage and support the production and consumption of biofuels in Manitoba; and
(b) to ensure that biofuels and blended biofuels sold in Manitoba meet prescribed quality specifications.
Renumbered as section 6.6.
No person shall manufacture a biofuel in Manitoba unless the person holds a valid licence issued by the minister.
The minister may issue a licence, or a prescribed class of licence, authorizing a person to manufacture a biofuel in Manitoba. The minister may also, with the approval of the Lieutenant Governor in Council, enter into one or more agreements with the person
(a) setting out terms and conditions that apply to the licence; and
(b) dealing with any other matter relating to the manufacture of the biofuel in Manitoba.
A licence is not transferable.
The minister may suspend or cancel the licence of a person who
(a) commits an offence under this Act, or under any other law relating to the person's business; or
(b) fails to comply with this Act or the regulations, with any other law relating to the person's business, or with an order or agreement made under this Act or a licence issued under it.
If the holder of a licence fails to comply with the licence or an agreement made under this Act, the minister may, in addition to or instead of suspending or cancelling the licence, assess a penalty in accordance with the regulations.
Before suspending or cancelling a licence under subsection (1) or assessing a penalty under subsection (2), the minister must
(a) notify the holder of the licence in writing of the proposed action and the reason for it; and
(b) allow the holder at least 30 days to show why the proposed action should not be taken.
The holder of a licence must
(a) keep records and report to the minister in accordance with the regulations;
(b) make those records available for inspection, examination and audit under this Act; and
(c) if the records are not made available in Manitoba, pay to the minister the amount assessed by the minister for expenses necessarily incurred in inspecting, examining or auditing the records at the place where they are kept.
If the minister considers the licence holder's records to be inadequate for the purposes of this Act, the minister may, by written order, direct the licence holder as to how they are to be kept. The licence holder must then keep records as directed.
The Lieutenant Governor in Council may by regulation establish a grant program, to be funded by the Ethanol Fund, to support ethanol production in Manitoba.
Without limiting the generality of subsection (1), the Lieutenant Governor in Council may make regulations
(a) respecting applications for grants;
(b) respecting eligibility for grants;
(c) respecting terms or conditions to be imposed on grants;
(d) establishing reporting requirements for grant recipients;
(e) establishing criteria for assessing the need for a grant, and the amount of a grant;
(f) respecting the maximum amount that may be paid in grants in a 12-month period.
Upon receiving a grant application, the minister may
(a) approve the grant in accordance with the criteria established by regulation, and enter into an agreement with the applicant that sets out
(i) the amount or maximum amount of the grant, and the manner in which it will be paid,
(ii) any circumstances under which the amount of the grant may be reduced or any part of it must be repaid, and
(iii) any other terms or conditions that the minister considers appropriate for the payment and administration of the grant; or
(b) deny the grant.
To continue to be eligible to receive payments under a grant approved by the minister, the grant recipient must comply with
(a) the terms and conditions of the agreement governing the grant; and
(b) the applicable provisions of this Act and the regulations.
A fund to be known as the "Ethanol Fund" is hereby established, within the Consolidated Fund, to support the production of denatured ethanol in Manitoba.
The following amounts are to be paid or credited to the Ethanol Fund:
(a) for each of the first eight 12-month periods to which the denatured ethanol sales mandate applies, the amount determined by the following formula is to be paid or credited to the Ethanol Fund from the taxes collected under The Gasoline Tax Act for that period:
Credit = R × L
In this formula,
is the applicable rate, determined as follows:
(i) for the first two 12-month periods, $0.20 per litre,
(ii) for the next three 12-month periods, $0.15 per litre,
(iii) for the last three 12-month periods, $0.10 per litre;
is the least of
(i) the number of litres of denatured ethanol that were manufactured in Manitoba during the period,
(ii) the number of litres of denatured ethanol included in gasohol that was sold during the period and on which tax under The Gasoline Tax Act was collected and not refunded, and
(iii) the number of litres of gasoline and gasoline-based fuels that were sold by fuel suppliers during the period and on which tax under clause 2(1)(d) of The Gasoline Tax Act was collected and not refunded, multiplied by the prescribed percentage that applies in determining the denatured ethanol sales mandate for that period, or, if another percentage is prescribed, by that other percentage;
(b) any portion of a grant repaid to or recovered by the minister;
(c) interest earned on amounts credited to the Ethanol Fund.
For December, 2007, and for each month after that until the denatured ethanol sales mandate begins to apply, there is to be paid or credited to the Ethanol Fund, from the taxes collected under The Gasoline Tax Act for that month, the amount determined by the Minister of Finance to be the equivalent of $0.025 per litre of gasohol to which the rate reduction under subsection 2(2) of that Act applied in the same month one year earlier.
The Minister of Finance may pay or credit to the Ethanol Fund any additional amount authorized by an Act of the Legislature to be so paid and applied out of the Consolidated Fund.
On the requisition of the minister for a grant of money to be paid under this Act, the Minister of Finance must pay it out of the Ethanol Fund.
The Minister of Finance may, with the approval of the Lieutenant Governor in Council, transfer out of the Ethanol Fund and treat as general revenue of the government all or any part of the amount standing to the credit of the Ethanol Fund that is not required to pay the grants approved by the minister responsible for the grants.
On or after March 31, 2017, the Lieutenant Governor in Council may require the Ethanol Fund to be wound up and the balance, if any, to be to transferred out of the Ethanol Fund and treated as general revenue of the government.
The fiscal year of the Ethanol Fund ends on March 31 of each year.
SALE OF BIOFUEL AND BIOFUEL SALES MANDATES
No person shall sell
(a) biodiesel for use as a fuel or for another prescribed use;
(b) denatured ethanol for blending with gasoline in Manitoba;
(c) a biofuel other than biodiesel or denatured ethanol; or
(d) a blended biofuel;
unless the biodiesel, denatured ethanol, other biofuel or blended biofuel meets the prescribed specifications.
Not yet proclaimed.
A fuel supplier whose sales of gasoline and gasoline based fuels for a reporting period do not include the prescribed proportion of denatured ethanol must pay a penalty to the Minister of Finance on the shortfall.
Not yet proclaimed.
A shortfall and penalty under this section is to be calculated in accordance with the regulations. The fuel supplier must report the shortfall and remit the penalty in accordance with the regulations.
A fuel supplier must
(a) keep records and report to the Minister of Finance in accordance with the regulations;
(b) make those records available for inspection, examination and audit under this Act; and
(c) if the records are not made available in Manitoba, pay to the Minister of Finance the amount assessed by that minister for expenses necessarily incurred in inspecting, examining or auditing the records at the place where they are kept.
If the Minister of Finance considers the fuel supplier's records to be inadequate for the purposes of this Act, he or she may, by written order, direct the fuel supplier as to how they are to be kept. The fuel supplier must then keep records as directed.
If after an audit or inspection it appears to the director that a fuel supplier
(a) has an unreported shortfall in respect of denatured ethanol or biodiesel; or
(b) has failed to remit a penalty under section 7;
the director must notify the minister of the shortfall or failure to remit.
When notified of the shortfall or failure to remit, the minister may issue a notice of assessment to the fuel supplier. The notice must set out
(a) the director's determination of the shortfall, which may be based on an estimate if the fuel supplier's records are incomplete;
(b) the amount of the penalty under section 7 that remains unpaid; and
(c) the interest accrued on that penalty from the day it was due until the day of the assessment.
The fuel supplier may object to the assessment by filing a notice of objection with the minister within 60 days after receiving the notice of assessment. The notice of objection must set out the relevant facts and the reasons for the objection.
Upon receipt of a notice of objection, the minister must
(a) reconsider the assessment in light of the objection; and
(b) by written notice to the fuel supplier, affirm, set aside or vary the assessment.
Within 60 days after receiving the notice of the minister's decision, the fuel supplier may appeal the assessment, as varied or affirmed by the minister, to the Court of Queen's Bench by filing a notice of appeal.
The notice of appeal must set out the relevant facts and the grounds for the appeal, and the fuel supplier must serve a copy of it on the minister within seven days after filing it in the court.
In an appeal to the court, the onus is on the fuel supplier to disprove the assessment.
After hearing the evidence adduced by the fuel supplier and the minister, the court may
(a) affirm, set aside or vary the assessment; and
(b) make any order as to costs that it considers appropriate.
ADMINISTRATION AND ENFORCEMENT
Each of the following amounts is deemed to be a debt due to the government by the person liable to pay it:
(a) a penalty assessed under subsection 5(2);
(b) the expenses assessed under clause 6(1)(c) or 8(1)(c) in respect of the examination of records not made available for audit in Manitoba;
(c) a penalty payable under section 7, whether or not it has been assessed under section 9.
The debt bears interest, as prescribed by regulation under The Financial Administration Act, from the day it is due until the day it is paid.
The Minister of Finance may issue a certificate as to the amount of the debt and the applicable rate of interest, and may file the certificate in the Court of Queen's Bench. Once filed, it may be enforced against the person liable to pay it as a judgment of the court in favour of the Crown in right of Manitoba.
Sections 16 to 18 of The Gasoline Tax Act also apply, with necessary changes, to the collection of the debt.
The Minister of Finance or the minister may audit or inspect or may cause an audit or inspection to be made of the records of a fuel supplier, a manufacturer of a biofuel or a producer of a blended biofuel.
The Minister of Finance or the minister may designate persons as inspectors for the purposes of this Act and may issue inspector identification cards to those persons. Every peace officer is also an inspector for the purposes of this Act.
For the purposes stated in subsection (2), an inspector may at any reasonable time enter
(a) business premises occupied by a person involved in
(i) manufacturing, buying or selling a biofuel or blending it with other fuel, or
(ii) storing, transporting or selling gasoline, blended biofuel or any motive fuel that is prescribed for the purposes of the biodiesel sales mandate, in Manitoba; or
(b) other premises where the business records of a person described in clause (a) are kept.
The purposes for which an inspector may enter premises under this section are as follows:
(a) to determine compliance with this Act, the regulations, and the terms or conditions of a licence or an agreement made under this Act;
(b) to inspect, audit or examine records required to be kept under this Act or the regulations, or under the terms or conditions of a licence or an agreement made under this Act;
(c) to ascertain how much of any type of biofuel is on hand, and how much has been manufactured, bought or sold by the person, and from whom it was bought and to whom it was sold;
(d) to ascertain how much of any type of petroleum-based fuel is on hand, and how much has been bought or sold by the person, and from whom it was purchased and to whom it was sold.
An inspector who is not a peace officer must show his or her inspector identification card if requested to do so during an inspection.
The owner or person in charge of the premises or the relevant records must give the inspector all reasonable assistance to enable the inspector to carry out his or her duties, and must furnish the inspector with any information that the inspector reasonably requires.
An inspector may examine and take samples of fuel on any premises that the inspector is allowed to enter under this section, including fuel in any tank, container or other receptacle.
In carrying out an inspection under this section, the inspector may
(a) require the owner or person in charge of the premises or the relevant records to produce for inspection a computer printout of relevant records stored in digital form; and
(b) use copying equipment at the place of inspection to make copies of records.
An inspector who is not able to make copies of records at the place of inspection may remove them to make copies. The inspector must make the copies as soon as practicable and return the original records to the person or place from which they were removed.
Subsection 13(1) does not permit an inspector to enter a dwelling occupied as a residence without the consent of the occupier. But an inspector may enter such a dwelling under the authority of a warrant issued under subsection (2).
Upon being satisfied by information on oath that premises occupied as a residence contain records that there are reasonable grounds to believe are relevant to a matter referred to in subsection 13(2), a justice may issue a warrant authorizing a person named in the warrant to enter the premises for the purposes set out in that subsection.
A justice who is satisfied by information on oath that there are reasonable grounds to believe that
(a) an offence under this Act is being or has been committed; and
(b) something that affords evidence of the offence is to be found in a building, receptacle, vehicle, or place in the province;
may at any time, and when necessary on application without notice, issue a warrant authorizing an inspector and any other persons named in the warrant, with such peace officers as are required to assist, to enter and search the building, receptacle, vehicle, or place for the thing and to seize and retain it for production in any court proceedings.
The minister, the Minister of Finance, or an inspector may serve a written demand on a person, including a director, officer or employee of a corporation, requiring the person to produce for audit, inspection or examination any records in the person's control or possession that relate to a matter referred to in subsection 13(2).
The person served with the demand must comply with it within the time specified in the demand.
A document certified by the minister, the Minister of Finance, or an inspector to be a copy of a record obtained under this Part
(a) is admissible in evidence without proof of the office or signature of the person purporting to have made the certificate; and
(b) has the same probative force as the original record.
A person commits an offence who
(a) makes, or assents to or participates or acquiesces in the making of,
(i) a false or misleading statement in an application, report or other document provided to a public officer under this Act or the regulations, or
(ii) a false or misleading entry in or record required to be kept under this Act or the regulations;
(b) destroys, mutilates, alters or fails to keep a record required to be kept under this Act or the regulations;
(c) fails to provide a record or report as required under this Act or the regulations;
(d) obstructs or interferes with, or attempts to obstruct or interfere with, a person acting or attempting to act under the authority of this Act or the regulations;
(e) manufactures or sells a biofuel or a blended biofuel in contravention of this Act;
(f) falsely represents
(i) a product as being a biofuel or blended biofuel, or
(ii) the proportion of biofuel in a blended biofuel;
(g) fails to pay a penalty assessed under subsection 5(2) or section 9.
Every person who is guilty of an offence under subsection (1) is liable on summary conviction
(a) in the case of an individual, to a fine of not more than $10,000.; and
(b) in the case of a corporation, to a fine of not more than $50,000.
If a corporation commits an offence under subsection (1), a director or officer of the corporation who authorized, permitted or acquiesced in the commission of the offence is also guilty of the offence and is liable on summary conviction to a fine of not more than $10,000., whether or not the corporation has been prosecuted or convicted.
The Lieutenant Governor in Council may make regulations
(a) defining "gasoline" and any other term that is used but not defined in this Act;
(i) fuels derived from biomass, for the purpose of the definition "biofuel" in section 1,
(ii) motive fuels or classes of motive fuels, for the purpose of subclause (a)(ii) of the definition "fuel supplier" in section 1,
(iii) motive fuels or classes of motive fuels that may be blended with biodiesel or another biofuel to form blended biodiesel or another blended biofuel, and
(iv) a renewable fuel, for the purposes of the definition "biodiesel" in section 1;
(b) prescribing specifications for denatured ethanol and for gasohol, and for the manner in which denatured ethanol may be blended with gasoline;
(b.1) prescribing specifications for biodiesel and blended biodiesel, and for the manner in which biodiesel may be blended with a motive fuel or a class of motive fuel;
(b.2) prescribing specifications for biofuels other than biodiesel and denatured ethanol;
(b.3) prescribing specifications for blended biofuels other than blended biodiesel and gasohol, and for the manner in which a biofuel may be blended with other prescribed fuels;
(b.4) prescribing classes of licences for the manufacturing of biofuels, the requirements to obtain each class of licence and the terms and conditions for each class of licence, which may be different for the different classes;
(b.5) respecting the Ethanol Fund and its administration;
(b.6) prescribing a percentage for the purpose of subclause (iii) of "L" in the formula in subsection 6.4(2);
(c) respecting penalties that may be assessed under subsection 5(2);
(d) prescribing reporting and recordkeeping requirements for fuel suppliers and manufacturers of biofuels, which may be different for the different types of biofuel;
(e) prescribing the proportion of the total volume of gasoline and gasoline-based fuels sold by a fuel supplier in a reporting period that must be denatured ethanol in order for the fuel supplier to avoid a penalty under section 7;
(f) for the purposes of the denatured ethanol sales mandate,
(i) prescribing the reporting period,
(ii) prescribing the method of calculating a shortfall in denatured ethanol sales and the penalty payable in respect of a shortfall, and
(iii) respecting the remittance of the penalty;
(f.1) for any prescribed motive fuel or class of motive fuel, prescribing the proportion of the total volume of that type of fuel sold by a fuel supplier in a reporting period that must be biodiesel in order for the supplier to avoid a penalty under section 7;
(f.2) for the purposes of the biodiesel sales mandate,
(i) prescribing motive fuels or classes of motive fuels,
(ii) prescribing the reporting period and the start date of the first reporting period,
(iii) prescribing the method of calculating a shortfall in biodiesel sales and the penalty payable in respect of a shortfall, and
(iv) respecting the remittance of the penalty;
(g) respecting the disclosure and use of information collected in the administration and enforcement of this Act;
Repealed, S.M. 2007, c. 17, s. 5.
A regulation under subsection (1) may adopt by reference, with any changes the Lieutenant Governor in Council considers appropriate, all or part of a code, rule or standard made by a governmental authority or any other body, and the code, rule or standard may be adopted as amended from time to time.
A regulation under clause (1)(d) may require reports to be provided to a director under The Tax Administration and Miscellaneous Taxes Act, and may require the director to provide information contained in those reports to the minister.
A regulation under clause (1)(f.2) cannot be made until the aggregate annual biodiesel production capacity in Manitoba exceeds 20 million litres.
This Act may be cited as The Biofuels Act and referred to as chapter B40 of the Continuing Consolidation of the Statutes of Manitoba.
This Act comes into force on a day to be fixed by proclamation.
NOTE: The following provisions of S.M. 2003, c. 5, have been proclaimed in force:
Part 1, subsections 4(2) and (3), clause 19(1)(b) and section 21 in force November 1, 2005.
Sections 6.1 to 6.4 and clauses 19(1)(a), (a.1), and (b.1) to (h), as originally enacted or as added or amended by S.M. 2007, c. 17, s. 5, in force December 1, 2007.
Sections 2, 5, 6 and 6.5 except clause 6.5(a), section 7 except subsection 7(1.1), sections 8 to 18 and subsection 19(5) as originally enacted or as added or amended by S.M. 2007, c. 17, s. 5, in force January 1, 2008.
Subsection 4(1), clause 6.5(a) and subsections 19(3) and (4), as originally enacted or as added or amended by S.M. 2007, c. 17, s. 5, in force December 15, 2008.
NOTE: Section 20 contained amendments to The Gasoline Tax Act that were never proclaimed.