Ottawa sitting on $2.5 billion in carbon tax rebates owed to small business since 2019

Toronto, February 8, 2024 – The federal government has been sitting on $2.5 billion in carbon tax revenue collected since 2019 despite repeated promises to return it to small businesses in Ontario, Manitoba, Saskatchewan and Alberta, says the Canadian Federation of Independent Business (CFIB). 

The federal government pledged to return 10% of carbon tax revenue back to small businesses, farmers and Indigenous people but has returned almost zero since the tax began. On top of that, the carbon tax is increasing to $80 per tonne on April 1. 

“This is particularly troubling as the tax was expanded to all four Atlantic provinces in July of last year. There is no mechanism in place to return a dime to small businesses paying the federal carbon tax in eight provinces,” said CFIB president Dan Kelly. “No wonder some Indigenous organizations are taking the federal government to court.” 

Making matters worse, CFIB estimates small businesses actually pay 40% of the costs of the carbon tax, yet they are only supposed to receive up to 10% of the revenue once Ottawa gets around to figuring out a way to return the dollars as promised.  

“While the federal government charges carbon taxes to all small businesses, they plan to rebate only a select few in emissions-intensive and trade-exposed sectors, whatever that means,” Kelly added. 

Finally, CFIB is very concerned that the federal government may have already decided to lower the allocation for small businesses in order to pay for the changes made last fall to double the rural consumer rebate.  

“The Deputy Prime Minister’s office confirmed the changes will be funded through an ‘excess allocation in future years,’ which we interpret as the 10% that is supposed to be returned to small business,” Kelly said. “Canada’s carbon tax system is a mess and is deeply unfair to Canada’s small businesses who are the second largest payer of the levy after consumers. It’s not surprising that a strong majority of small firms are now opposed to the federal carbon tax regime.” 

While Canada considers the future of the carbon tax system, CFIB is urging the federal government to: 

  • Immediately return the $2.5 billion owed to all small businesses in Ontario, Alberta, Manitoba and Saskatchewan. 
  • Immediately develop a simple rebate formula to return 10% of ongoing carbon tax revenue to small businesses across all eight provinces on a quarterly basis, with a plan to raise it to 40%.
  • Reject the Senate amendments and expedite the passing of Bill C-234 to exempt natural gas and propane used for on-farm activities, as originally drafted.
  • Freeze the carbon tax at its current level.
  • Exempt all heating fuels, including natural gas. 

“With the new year bringing new costs, we’re calling on Ottawa to take some concrete action and do more to help small businesses facing financial hardships. The government can show small firms that it’s listening to them by freezing the carbon tax while fixing the broken carbon backstop system,” said Corinne Pohlmann, Executive Vice-President of Advocacy at CFIB. 

CFIB has launched a petition to ensure the voice of Canada’s small businesses is heard in Ottawa. Small businesses can sign CFIB’s petition calling for carbon tax fairness. 

For media enquiries or interviews, please contact: 
Dariya Baiguzhiyeva, CFIB 

Final results for the Flash Survey on Carbon Pricing. The online survey was conducted from September 14-27, 2023, number of respondents= 2,911. For comparison purposes, a probability sample with the same number of respondents would have a margin of error of at most +/-1.8 %, 19 times out of 20. Businesses in all provinces/territories were asked whether or not they support the current federal carbon pricing system. Only businesses in provinces/territories subject to the federal backstop were asked whether the federal carbon tax should be eliminated. 

About CFIB 
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 97,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at