Good News on Carbon Tax Rebates, but the Wait Isn’t Over!

To qualify, your business must meet all the following criteria for the tax year ending in 2023:

• Be a Canadian-controlled private corporation (CCPC) for the entire 2023 tax year
• Have filed your 2023 tax return no later than December 31, 2024
• Have between one and 499 employees in a designated province* during the calendar year in which the fuel charge year begins

*Designated provinces are those where the federal fuel charge applies: Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador.

For more details, see CRA’s Canada Carbon Rebate for Small Business webpage.

Rebates are 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.

No need to apply. If you filed your business taxes before July 15^th, the Canada Revenue Agency (CRA) will calculate and automatically send the “Canada Carbon Rebate” to eligible businesses. If you receive the Carbon Rebate, you will receive a notice.

Yes. On June 30, 2025, the federal government confirmed that businesses that file during this period will qualify for a carbon tax rebate covering the 2019–2020 to 2023–2024 fuel charge years. The payment will be made once legislation is passed. CFIB is seeking clarity on when and how funds will be issued.

No. On June 30, 2025, the federal government confirmed that it will introduce legislation to ensure that all past and future Canada Carbon Rebates for Small Businesses are tax free.

CFIB is still seeking clarification from the federal government on how businesses that have already paid taxes on the rebate will receive it back. We will update members as soon as the government provides instructions.

CFIB is actively seeking clarification from the federal government on the process for businesses that have already filed and paid tax on their rebate. Approximately 50% of eligible small businesses may be affected. So far, the Canada Revenue Agency (CRA) has confirmed that if legislation passes, they will be able to process amended T2 returns. We will update members as soon as the government provides instructions.

No. If your business has not yet filed its 2024 corporate income tax return, you can choose to not include the rebate in your income when filing your 2024 taxes to get it tax-free. However, you could be reassessed, with interest, if the legislation does not pass in the fall.

Yes. One final round of rebates, estimated at $623 million, is still to be issued. The government has committed to distributing this amount in 2025, but no exact timeline has been announced. CFIB is pushing for clear details on when the funds will be released.

Some businesses may be experiencing delays in processing their rebates. See below.

We are hearing that some businesses have not received their carbon rebate. CRA has shared this may be because the business is either ineligible or their rebate is delayed. If you are still waiting on your rebate, please follow the below steps:

1. Ensure you meet all eligibility requirements and have supporting documents
2. Check if any of these situations apply to you:
   • You were not a CCPC at all times during the 2023 tax year
   • Your 2023 corporation income tax return was filed after July 15, 2024
   • Your 2023 corporation income tax return was your final tax return as part of a dissolution
   • Your payment was applied to an existing debt
   • Your 2023 corporation income tax return is still being assessed
   • Your rebate determination is under review
   • Your business information with CRA is not up to date
   • Your business did not pass the verification process to detect and prevent suspicious and/or fraudulent activity
3. Contact the Canada Revenue Agency
4. Call CFIB’s Business Advisors at 1-833-568-2342 for support

Speak with a CFIB Business advisor at 1-833-568-2342. We can help you navigate the CRA’s Canada Carbon Rebate for Small Business webpage, understand the new announcements, and work with our contacts at CRA to help clarify your situation.

Right now, there is no way for businesses to recover carbon tax paid on fuel inventory held on April 1, 2025. It’s unfair that government can reclaim carbon tax using existing forms, but businesses can’t recover what they already paid. CFIB is actively pushing for a fix.

If you are in this situation, please call a CFIB Business Advisor at 1-833-568-2342 to share the amount of carbon tax inventory you had or rebate you could receive.

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. The government has moved to eliminate it as of April 1^st, 2025.