Taxes & Rebates - Questions and Answers

Fuel Tax Act - Budget 2011 Change - Tax Exempt Fuel Use (TEFU) Rebate

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See also:  Alberta Fuel Tax Special Notice Vol. 1, No. 31:  2011 Budget Change - Tax Exempt Fuel Use (TEFU) Rebate.


Which fuel tax rebates were eliminated in Budget 2011?

Rebates relating to the Tax-Exempt Fuel Use (TEFU) and Prescribed Rebates Off-Road Percentages (PROP) programs have been eliminated for fuel purchased or used after February 24, 2011.  Rebates that do not relate to off-road use will continue.  Below is a summary of activities which no longer qualify for a rebate, and those which continue to qualify.

Activities for which the rebate has been eliminated effective February 25, 2011:

  • fuel used in a licensed motor vehicle driven in an off-road area by a government authority;
  • fuel used in a motor vehicle licensed or registered in respect of its operation under any provincial or federal enactment that is driven in an off-road area for commercial purposes;
  • fuel used for regulating the temperature in a trailer or container used for the commercial transportation of goods, where the trailer or container is located on an off-road area;
  • fuel used in Alberta in a commercial tour boat;
  • fuel used by a licensed commercial fisher in Alberta in a commercial boat for commercial fishing purposes;
  • all rebates under the PROP program.

Activities that continue to qualify for a rebate (if all eligibility requirements are met):

  • fuel purchased in Alberta for its own use by a country or state other than Canada, or a political subdivision or agency of that country or state, or an accredited person representing that country, state or political subdivision in Canada;
  • fuel purchased by an Indian or Indian band who would otherwise have been entitled to purchase clear tax-exempt fuel on an Indian reserve except for the fact that the person’s ministerial identification card was suspended or cancelled at the time of purchase;
  • any rebate related to the farm fuel benefit program, including liquefied petroleum gas or aviation fuel used for farming operations in Alberta and fuel used for farming operations in Alberta by a farmer licensed under the International Fuel Tax Agreement (IFTA) for a farm truck that is part of the farmer’s fleet of qualified motor vehicles under IFTA;
  • fuel purchased by a member of the Diplomatic Corps;
  • fuel exported in bulk from Alberta, if fuel tax is payable in the jurisdiction the fuel is exported to and the applicant has paid that fuel tax;
  • aviation fuel purchased in Alberta for use by a domestic air transport service in a commercial aircraft on an international flight;
  • fuel used in circumstances in which the Fuel Tax Act would have permitted the use of marked fuel, but marked fuel was not reasonably available.

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Are there any changes in the marked fuel program?

No.  The marked fuel program continues with the same rules.  Marked fuel may be used by eligible farmers for farming operations in Alberta.  Marked fuel may also be used by commercial and government entities in unlicensed vehicles, machinery or equipment, for heating purposes and other eligible activities.  Marked fuel cannot be used in licensed commercial or government vehicles.

Anyone purchasing marked fuel must have a valid fuel tax exemption certificate at the time of purchase, and may only use the marked fuel for eligible activities.

A rebate continues to be available for fuel used in circumstances in which the Fuel Tax Act would have permitted the use of marked fuel but marked fuel was not reasonably available. Criteria for marked fuel not reasonably available have not changed.  For more information on the criteria, see paragraph 8 of Information Circular TEFU-1R4.

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Are there any changes to the Alberta Farm Fuel Benefit (AFFB) program or the Alberta Farm Fuel Distribution Allowance (AFFDA) as a result of the elimination?

No.  Both the AFFB program and the AFFDA will continue the same as before.  Marked fuel may be used by eligible farmers for farming operations in Alberta.  A rebate, with the applicable AFFDA, continues to be available to eligible farmers when marked fuel is not reasonably available.  Please refer to the question on dual farming and business operations for a farmer for more information.

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How is the effective date applied?

The rebate was eliminated for fuel purchased or used after February 24, 2011.  A rebate continues to be available for fuel purchased and used for eligible activities prior to February 25, 2011.

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How long can I claim rebates for fuel purchased and used prior to February 25, 2011? 

Fuel tax paid on fuel purchased or used after February 24, 2011 is not eligible for a rebate.  Claims for tax paid on fuel purchased and used on or before February 24, 2011 may be made up to three years from the end of the calendar year in which the fuel was purchased.  Thus, the following claims periods apply:

Date of fuel purchase Deadline for rebate claim
January 1, 2007 - December 31, 2007 Claim is no longer permitted
January 1, 2008 - December 31, 2008 December 31, 2011
January 1, 2009 - December 31, 2009 December 31, 2012
January 1, 2010 - December 31, 2010 December 31, 2013
January 1, 2011 - February 24, 2011 December 31, 2014
February 25, 2011 onwards Rebate eliminated, no claims allowed

The applicable rebate criteria must continue to be met to be eligible for a rebate.

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What happens to claims made previously and already in progress? 

Any claim that has been submitted within the claim deadline will be reviewed in the normal course to determine the applicant’s eligibility for a rebate.

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Can I amend my prior claim?

Claims may be amended in certain circumstances.  An amended claim will receive a new receipt date and may be submitted unless the claim deadline has passed.  An amended claim will not be accepted unless the entire original claim has been recalculated and resubmitted. An amended claim must be submitted separately.  It cannot be the result of a new survey adjusting the allocation of on- and off-road hours used in prior assessed claims.

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I filed an objection relating to the disallowance of a rebate claim.  What will happen to that objection?

Objections filed within the time limit are generally reviewed by the Objections and Appeals area in the order in which they are received.  Objections relating to claims made for fuel purchased and used prior to February 25, 2011 will be dealt with in the ordinary manner. 

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What if I farm and have a business?

You will no longer be reimbursed for the tax on fuel used in licensed vehicles for non-farming activities.

An eligible farmer is entitled to apply for a farm fuel tax exemption certificate, or a commercial fuel tax exemption certificate, but not both. 

A farmer who has a farm fuel tax exemption certificate cannot use marked fuel purchased with that farm fuel certificate in a non-farm vehicle or for non-farming purposes (since marked fuel purchased with a farm fuel certificate already includes the Alberta Farm Fuel Distribution Allowance).  The farmer must use clear fuel for non-farming activities and apply for a rebate of the tax paid on clear fuel used for eligible non-farming activities.  After February 24, 2011, the rebate is only available for clear fuel used in unlicensed vehicles, machinery and equipment in the farmer’s eligible non-farming activities.

If the farmer holds a commercial fuel tax exemption certificate, marked fuel purchased with that certificate may be used in all eligible farming and commercial activities for which marked fuel may be used.  The farmer may then apply to Tax and Revenue Administration (TRA) for the Alberta Farm Fuel Distribution Allowance on that portion of the fuel used for farming operations in Alberta.  After February 24, 2011, the farmer can no longer apply for a rebate on clear fuel used in licensed vehicles for eligible off-road activities.

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We have been required to file for rebates based on our usage per quarter (ending March 31, June 30, September 30, December 31).  For the final claim, what date should we fill in the line asking for the “period ending”, since the program is ending before March 31?

For fuel used between January 1, 2011 and February 24, 2011, the period end date on the claim form will still be March 31, 2011.  The claim cannot include any fuel purchased or used after February 24, 2011.  Unconsumed fuel on hand as of February 25, 2011 is not eligible for a rebate.

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Am I required to conduct another survey in support of my unfiled TEFU claims given the program is ending?

Tax and Revenue Administration (TRA) may consider extending an expired survey if it is still representative of routine operations. If you wish to apply for the extension, please complete form AT4970, "Declaration of Tax Exempt Fuel User (TEFU) Survey Extension," and submit it to TRA.

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How long am I required to retain my records?

All records and documentation related to your TEFU claim (survey, fuel purchases etc.) must be retained for six years from the end of the calendar year in which the fuel was purchased or four years from the end of the calendar year in which the rebate was paid, whichever is later.

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How do you determine when fuel is used?

TRA relies on the claimant to accurately determine what fuel has been used by the program deadline, and what fuel remains and no longer qualifies for rebates after February 24, 2011.  Claimants are asked to document their criteria used in determining which fuel is used versus unused and be prepared to provide the documentation to TRA upon TRA’s request.

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Page last updated:  April 30, 2013