Latest update: $2.5 billion in carbon tax revenue is coming back to small businesses!

UPDATE: Victory! We had been informed that the Canada Carbon Rebate for Small businesses would be a taxable benefit, meaning that it will be taxed as business income. CFIB disagreed with that decision and sent a letter to the Finance Minister voicing our opposition to the decision. On November 12th, the Finance Minister publicly confirmed that the government will make the rebate tax free!

On October 1, 2024, the federal government announced that it will return $2.5 billion in carbon tax rebates to small businesses by December 16, 2024 (if registered for direct deposit with the CRA) or by December 31, 2024 (if receiving payment by cheque). The CRA never issues payments via e-transfer. These dates apply 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.

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.

Sizable rebates will be paid out to Alberta, Saskatchewan, Manitoba, and Ontario. New Brunswick, Nova Scotia, PEI, and Newfoundland and Labrador will receive smaller payouts as they only joined the federal carbon backstop as of July 1, 2023.

Rebates are just the first step. Our work continues.

Did you know?

• The carbon tax increased by a staggering 23% on April 1^st! 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.