New Details Released on Residential Energy Rebate

Important details surrounding the new Residential Energy Rebate that was announced as part of Budget 2011 were released today by the Provincial Government. Originally, the new rebate was to come into effect on October 1, 2011 to allow proper consultations with energy suppliers. Now, those who use furnace fuel, stove oil, propane, wood and wood products can take advantage of the rebate on September 1 instead. As originally planned, the rebate will be offered on electricity beginning on October 1.

Equivalent to the eight per cent provincial component of the HST, the rebate is worth an estimated $38 million annually for residents. The Provincial Government is also continuing to offer the successful Home Heating Rebate for lower income families which puts another $17 million per year back into the pockets of individuals and families with an annual income less than $40,000.

“I am pleased that with the progress made we are now able to implement the rebate one month earlier than originally planned for many of the heat sources,” said the Honourable Tom Marshall, Minister of Finance and President of Treasury Board. “With regards to furnace fuel, we consulted with suppliers and it was determined that many people, particularly those on automatic fill, receive delivery of fuel in the month of September for use in October and beyond. Oil suppliers felt it was important to move the rebate start date to September 1 and our government listened.”

Bulk energy suppliers have been working diligently to implement the new rebate in time for the upcoming heating season. Suppliers of furnace oil have expressed concern that many people who normally fill up in September would delay until October to avail of the rebate. These people would then risk running dry and damaging their furnaces. A September start date resolves this issue.

“The rebate is a wonderful thing for energy consumers in general,” said Bill Oakley, President of the Newfoundland and Labrador Chapter of the Canadian Oil Heat Association. “It will be calculated upon delivery of the heating fuel thereby providing immediate savings and a welcome break for everyone living in a province where home heating is a necessity.”

The October 1 implementation date for electricity is appropriate since electricity is billed after it is used and electricity invoiced in October would normally include September usage. This gives electricity providers the time necessary to ensure their billing systems are prepared for the changes.

Those who have furnace fuel, stove oil or propane delivered to their home by a participating supplier and who use electricity will see the rebate directly on their invoices and are not required to submit any proof or documentation to the Provincial Government. Users who purchase from non-participating suppliers, operate a business at their residential address or use other forms of heat that are purchased from retail outlets in the province, such as wood pellets, will be required to save receipts and submit a claim form for reimbursement.

“The intention of this rebate is to help Newfoundlanders and Labradorians cope with the rising costs of heating their homes in a northern climate such as ours,” said Minister Marshall. “It will leave more money in the hands of residents particularly during the cold winter months when energy costs are highest.”

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BACKGROUNDER
Residential Energy Rebate Implemented Earlier for Many Heating Sources

Budget 2011 Standing Strong: For Prosperity. For Our Future. For Newfoundland and Labrador announced a new Residential Energy Rebate beginning in the upcoming heating season to help people with the rising cost of home energy. The Residential Energy Rebate is an eight per cent rebate equivalent to the provincial portion of the 13 per cent Harmonized Sales Tax (HST).

The Residential Energy Rebate will be effective for invoices dated on or after September 1, 2011 for heating oil, propane and other energy products and invoices dated October 1, 2011 for electricity.

The rebate is available to all residents regardless of income, and is based on the pre-HST cost of residential energy. It applies to residential energy purchases only, and includes electricity, furnace oil, stove oil, propane in tanks with a capacity greater than 4.5 pounds, wood pellets, firewood, and kerosene. The rebate will be applicable to all residential electricity, whether for heating, cooking, lighting or other purposes. Only purchases where HST has been paid to a HST registrant qualify. Purchases of gasoline, coal briquettes and butane do not qualify.

For an illustration of how much the rebate may be worth, please see the table below:

The GST/HST is imposed under federal law, and is collected and administered by the Federal Government. Federal administration of this program falls outside of the Provincial Government’s harmonized sales tax agreement with the Federal Government. The eight per cent Residential Energy Rebate Program will be administered by the provincial Department of Finance. The department has been working with electricity and home heating oil suppliers to put systems in place to ensure the most efficient and effective program for suppliers and customers.

Point of Sale (POS) Rebate
For most residential consumers, the energy rebate will be provided as a credit by energy suppliers directly on their invoice. This POS rebate will be available for all residential electricity customers. A POS rebate will also be available for customers of participating home heating oil suppliers who deliver heating oil.

Suppliers who provide the POS Energy Rebate will continue to collect the 13 per cent HST from customers and remit that amount to the Canada Revenue Agency. For eligible customers, a separate line item will be shown on the invoice from the supplier for the eight per cent energy rebate. Customers will pay the net amount after the rebate. Participating suppliers will apply to the Department of Finance for reimbursement.

Where a residential property is rented, the person who is invoiced for the energy supply is eligible for the rebate. For instance, if the electricity or fuel is invoiced to the tenant, the tenant receives the rebate. If the electricity or fuel is invoiced to the landlord, the landlord receives the rebate.

Pay and Claim Rebate
Where a POS rebate is not available, the customer will need to apply directly to the Department of Finance for the rebate. Applications may be submitted to the department once the rebate amount is $50 (i.e. a minimum pre-HST energy purchases total of $625), or for purchases spanning a 12-month period.

Most bulk fuel oil suppliers will be in a position to implement the POS rebate by September 1. However, some suppliers may require more time in order to implement software upgrades. As an interim measure for these cases, customers may apply for the rebate at any time, regardless of the amount.

Mixed Use Properties
Businesses are not eligible for the Residential Energy Rebate. Most businesses recover the HST through an Input Tax Credit. In some circumstances, a property may be used for both residential and commercial properties. If these mixed use properties have a common furnace or are not metered separately, the POS Rebate does not apply.
However, an application may be made to receive the rebate for the non-business portion of mixed-use property.

Provincial Government funded emanations such as Crown corporations and regional health authorities are not eligible for the rebate. However, private care homes are eligible for the POS rebate.

Charities and non profit organizations (NPOs) may currently qualify for a rebate of 50 per cent of the 13 per cent HST through the Canada Revenue Agency. If a charity or NPO pays for residential energy, it may apply for any portion of the provincial component of the HST not otherwise credited or rebated.

Applications are available online at www.gov.nl.ca/fin/energyrebate/, through e-mail at ResidentialEnergyRebate@gov.nl.ca or by calling 1-866-990-3444.

Heating fuel suppliers requiring further information may call 1-877-729-6376.

2011 08 15             4:15 p.m.