Good news for small businesses heading into summer: The federal government has announced that both past and future carbon tax rebates for small businesses will be tax-free, a move that removes taxes on over $3 billion in total rebates.
While the formal legislation will be introduced in the fall, the Finance Minister’s announcement marks a major win for over 600,000 small business owners across the country. This was a key issue on our advocacy agenda for the new government, and we’re excited to see progress that supports the future of small businesses across Canada.
If your business has already paid corporate income tax on past carbon rebates, the Canada's Revenue Agency (CRA) will issue refunds. The details of the refund process remain unclear, but we’re actively asking for details from the CRA to share with our members. As for those who haven’t filed their 2024 taxes yet, you won’t need to pay tax on those past rebates when you file this year.
The next round of carbon tax rebates is still pending, with an estimated $623 million set to be distributed to small businesses in 2025. We’re seeking details on when this final round will roll out – and we’ll continue pushing to ensure eligible businesses get the support they’ve been promised.
You can learn more about CFIB’s advocacy work on the carbon tax by checking out our carbon tax hub page.
We couldn’t have done this without the strength of our 100,000 members across the country. Interested in joining? Become a CFIB member today.
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