The carbon tax is gone, but several questions remain!
Breaking News: Canada Revenue Agency to tax the $2.5 billion small business carbon tax rebate despite decision by the Department of Finance.
Read CFIBs latest statement here
The carbon tax is gone, but several questions remain!
On March 14, 2025, the Liberal government scrapped the federal carbon tax for consumers, effective April 1, 2025. While CFIB welcomes this long-awaited decision, small businesses still need clarity on several outstanding issues.
We’re urging all parties to prioritize the following:
- Return the remaining $500 million in 2024-25 carbon tax rebates to small businesses (as promised).
- Pass legislation to guarantee that carbon rebates are tax-free (as promised).
- Extend the qualifying deadline for past rebates to December 31, 2024 (as promised).
It’s important to note that since Parliament is prorogued, the government scrapped the tax through an administrative procedure, not a legislative one. After the federal election, we will urge Parliament to immediately formalize this change through legislation.
Everything you need to know about the carbon tax rebates
On October 1, 2024, the federal government announced that it will return $2.5 billion in carbon tax rebates to small businesses by December 2024. This applies to businesses that filed their 2023 year-end tax return by the July 15, 2024, deadline.
The government is also proposing to extend the filing deadline to qualify to December 31, 2024 (previously July 15, 2024) for those who have not yet filed their 2023 year-end corporate tax return. Legislation enacting this change still needs Royal Assent.
On November 6, CFIB sent a letter to Minister Freeland voicing our strong opposition to the rebate being taxed as business income. Since then, she has confirmed several times that the rebates will be tax-free – all thanks to CFIB! However, the CRA maintains that it will continue to collect tax on rebates until legislation is passed that confirms this change. The good news is that most businesses will not file their 2024-year end returns until this summer, meaning we do have time to fix this issue after the next government is formed. CFIB is actively urging all parties to make this a top priority.
Rebates will be based on the number of T4s issued by an employer, including those issued to the business owner, their family, part-time, and seasonal workers, as well as for positions that turn over.
Latest announcement: Tax-free carbon tax rebates are being deposited to eligible business owners as of November 25, 2024. If you’re not registered for direct deposit with the CRA, your cheques are in the mail and will be delivered when possible.
Everything you need to know about the carbon tax rebates
On October 1, 2024, the federal government announced that it will return $2.5 billion in carbon tax rebates to small businesses by December 2024. This applies to businesses that filed their 2023 year-end tax return by the July 15, 2024, deadline.
The government is also proposing to extend the filing deadline to qualify to December 31, 2024 (previously July 15, 2024) for those who have not yet filed their 2023 year-end corporate tax return. Legislation enacting this change still needs Royal Assent.
On November 6, CFIB sent a letter to Minister Freeland voicing our strong opposition to the rebate being taxed as business income. On November 12, she confirmed that the rebate will be tax free – all thanks to CFIB!
Rebates will be based on the number of T4s issued by an employer, including those issued to the business owner, their family, part-time, and seasonal workers, as well as for positions that turn over.
Carbon Tax Rebate Calculator
Your Estimated Rebate*
Data Source: Canada.ca, 2024| 5 employees | 10 employees | 25 employees | 50 employees | 499 employees | |
|---|---|---|---|---|---|
| Alberta | $2,955 | $5,910 | $14,775 | $29,550 | $294,909 |
| Saskatchewan | $5,780 | $11,560 | $28,900 | $57,800 | $576,844 |
| Manitoba | $2,405 | $4,810 | $12,025 | $24,050 | $240,019 |
| Ontario | $2,005 | $4,010 | $10,025 | $20,050 | $200,099 |
| New Brunswick | $435 | $870 | $2,175 | $4,350 | $43,413 |
| Nova Scotia | $595 | $1,190 | $2,975 | $5,950 | $59,381 |
| Prince Edward Island | $410 | $820 | $2,050 | $4,100 | $40,918 |
| Newfoundland and Labrador | $895 | $1,790 | $4,475 | $8,950 | $89,321 |
CFIB worked hard to ensure government delivered on this promise after 5 years of delays. This happened after months of relentless advocacy, including delivering over 18,500 signed petitions from business owners across the country and garnering the support of the affected provinces.
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 reduced the rebate amount from 9% to 5% starting 2024, 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. CFIB estimated that small businesses pay about 40% of the carbon tax, although they are only eligible for 5% (previously 9%) in rebates. The tax undoubtedly contributed to the rising cost of doing business in Canada, and at great expense to small business owners.
| 10 employees | 25 employees | 50 employees | 100 employees | 499 employees | |
|---|---|---|---|---|---|
| Alberta | $5,910 | $14,775 | $29,550 | $59,100 | $294,909 |
| Saskatchewan | $11,560 | $28,900 | $57,800 | $115,600 | $576,844 |
| Manitoba | $4,810 | $12,025 | $24,050 | $48,100 | $240,019 |
| Ontario | $4,010 | $10,025 | $20,050 | $40,100 | $200,099 |
| New Brunswick | $870 | $2,175 | $4,350 | $8,700 | $43,413 |
| Nova Scotia | $1,190 | $2,975 | $5,950 | $11,900 | $59,381 |
| Prince Edward Island | $820 | $2,050 | $4,100 | $8,200 | $40,918 |
| Newfoundland and Labrador | $1,790 | $4,475 | $8,950 | $17,900 | $89,321 |
| 2019-20 | 2020-21 | 2021-22 | 2022-23 | 2023-24 | |
|---|---|---|---|---|---|
| Alberta | n/a | $147 | $123 | $140 | $181 |
| Saskatchewan | $110 | $271 | $244 | $298 | $233 |
| Manitoba | $48 | $99 | $77 | $89 | $168 |
| Ontario | $26 | $68 | $75 | $86 | $146 |
| New Brunswick | n/a | n/a | n/a | n/a | $87 |
| Nova Scotia | n/a | n/a | n/a | n/a | $119 |
| Prince Edward Island | n/a | n/a | n/a | n/a | $82 |
| Newfoundland and Labrador | n/a | n/a | n/a | n/a | $179 |
CFIB worked hard to ensure government delivered on this promise after 5 years of delays. This happened after months of relentless advocacy, including delivering over 18,500 signed petitions from business owners across the country and garnering the support of the affected provinces.
But our work continues! The carbon tax is up 300% and still increasing, so it’s no surprise that 83% of small business owners oppose the tax entirely.
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:
- Eliminate the carbon tax.
- Deliver the rebates as soon as possible, with significant rebates for the smallest businesses.
- Increase future rebates back to 9% or more, as long as the tax is in place.
WATCH: CFIB President, Dan Kelly, call for an immediate fix to the unfair federal carbon tax.
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
Be part of the largest small business organization in Canada.
Join more than 100,000 successful independent businesses who benefit from expert advice, exclusive savings and a strong voice in government.