It’s Time to Fix Canada’s Broken Carbon Tax!
CFIB is Holding Ottawa’s Feet to the Fire on the Unfair Federal Carbon Tax.
$2.5 Billion in Carbon Tax Revenue is Coming Back to Small Businesses! File your taxes by the July 15th deadline to qualify for a rebate.
After months of relentless advocacy by CFIB, including gathering 8,500+ signed petitions from across the country, the federal government finally committed to returning the over $2.5 billion in carbon tax revenues owed to small businesses. Here’s what we know so far:
- Around 600,000 incorporated SMEs (CCPCs) in 8 provinces (all other than BC & QC) will be eligible for rebates. Previously, only 13,000 businesses were eligible.
- SMEs in Ontario, Manitoba, and Saskatchewan will be eligible for up to 5 years of rebates, those in Alberta for up to 4 years, and those in the four Atlantic provinces for 1 year. This is based on the number of years the federal carbon tax has existed in each province.
- Incorporated firms with under 500 paid staff will be eligible, based on their number of T4s the business issues each year. We expect this will include all T4s, including those issued to the business owner, their family, part-time, and seasonal workers, as well as for positions that turnover (e.g. three workers that have filled the same position over the course of one year).
- Rebates will be automatic, paid by the CRA in the form of a refundable tax credit, and will likely be paid out this fall for all five years of payment. We don’t know if cheques will be issued.
- The rebate will distribute up to $2.5 billion that was set aside for SMEs from 2019 to March 2024. A similar approach is to be used for an annual rebate of 5% starting next year, down from 9% in previous years.
CFIB will continue to call on government to deliver the rebates as quickly as possible, ensure that there are sizeable rebates for the smallest businesses, and raise the share of future rebates back to 9% of carbon tax revenue, or more, as long as the tax remains in place.
Did you know?
- The carbon tax increased by a staggering 23% on April 1st! That means the cost of a litre of gasoline includes 17.6 cents of carbon tax!
- $32 billion has been collected in carbon tax revenue since 2019.
- The federal government has reduced the rebate amount from 9% to 5% starting this year, to accommodate for higher consumer rebates.
What is the carbon tax and how does it affect my business?
The federal carbon tax was introduced in 2019 to put a price on carbon pollution. Today, CFIB estimates that small businesses pay about 40% of the carbon tax, although they are only eligible for 5% (previously 9%) in rebates. The tax has undoubtedly contributed to the rising cost of doing business in Canada, and at great expense to small business owners. Small business owners agree: it’s time for Ottawa to fix the broken carbon tax or go back to the drawing board.
CFIB is asking for the following:
- Immediately return the $2.5 billion owed to all small businesses, not just certain sectors.
- Scrap the plan to reduce the SME share of carbon tax revenue from 9% to 5% in 2024 and rebate it annually.
- Ensure SMEs get rebates equivalent to their share of the fuel charge (CFIB estimates 40%).
- Pass Bill C-234 as originally proposed to exempt natural gas and propane used for on-farm activities, including grain drying and heating farm buildings.
- Freeze the carbon tax at its current level.
- Exempt all heating fuels, including natural gas.
See the work CFIB has done so far to help your business with the carbon tax:
Video
Dan Kelly shares a brief recap of the budget and what it means for SMEs across Canada.
Video
Dan Kelly calling for an immediate fix to the federal carbon tax.
News Release
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