Owner of Burnaby refinery fighting $5MM bill for uncollected taxes on coloured fuel

The Calgary company that owns the former Chevron refinery in Burnaby, B.C. is trying to fend off more than $5.24 million in penalties and interest from the B.C. finance ministry for failing to collect taxes on coloured fuel.

In a petition filed in B.C. Supreme Court last week, Parkland Fuel Corporation argued it was just a matter of paperwork.

Coloured or marked gas and diesel is not subject to the same taxes as regular, clear fuel if the buyers are using it for a ship, a stationary or portable engine, or a vehicle not licenced to operate on highways.

But buyers who purchase more than 45 litres or buy it through a cardlock have to provide a form declaring they’re using it for an authorized purpose – or the retailer is required to charge the same taxes as on clear fuel.

After a January audit, the finance ministry told Parkland in May the company owed $5,242,981.31 in penalties and interest for failure to collect taxes between 2015 and 2017

In its petition, Parkland said the ministry made the assessment on the basis “certain” forms Parkland got from its customers weren’t the right kind.

Instead of filling out one kind of form (FIN 430), some buyers had filled out another (FIN 438).

The FIN 430 replaced the FIN 438 in 2015, but Parkland argued there is “no material difference” between the two forms and, where the forms differ, “the deviations do not affect the substance of the form or its legal effect.”

Parkland has asked the court to set aside the finance ministry’s decision, saying the fuel company’s reliance on the old forms “was not calculated to mislead” and the minister had made an “unreasonable error.”

The two forms discussed in the petition are similar, but one notable difference is the certification buyers sign.

On the old form, buyers sign to say they “understand that unauthorized uses of coloured fuel may result in tax assessments, fines and/or penalties.”

The new form lists those consequences more explicitly, warning buyers they could be fined up to $10,000 or go to jail if they lie on the form.

The finance ministry has not yet responded to Parkland’s petition.

Parkland’s brands in B.C. include Chevron, Fas Gas Plus, Race Trac and Esso.

The company sells coloured fuel at commercial cardlocks, marinas and bulk plants.

— Burnaby Now

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