Once the single-use plastic bag ban comes into effect in Moncton, Dieppe and Riverview, New Brunswick on October 1, 2020, retailers must ask the customer if they require a checkout bag.
If a bag is requested, the retailer can offer the customer a variety of options. However, in recognition of the environmental footprint involved in making a paper bag, Greater Moncton has mandated that retailers must charge a fee on each paper checkout bag distributed to customers.
The retailer gets to determine the fee, control the fee, and must show the fee on the point of sale. The paper bag fee is subject to HST.
RCC spoke with the Canada Revenue Agency (CRA) and received clarification that if the HST on the paper bag is less than $0.01 the following should apply:
- If the HST is less than half of one cent, the total should be rounded down to zero
- If the HST is half a cent or above, the total should be rounded up to one cent.