It’s Time to Fix Canada’s Broken 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:

1. 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.
2. 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.
3. 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).
4. 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.
5. 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.