Trash the tax: small businesses want carbon tax system to end

CFIB research shows businesses have lost patience amid $2.5B unpaid rebates

Trash the tax: small businesses want carbon tax system to end
Steve Randall

The frustration felt by Canada’s small business owners who continue to wait for more than $2.5 billion in carbon tax rebates, means most now want the whole system to be scrapped.

Research by the Canadian Federation of Independent Business reveals that 83% of respondents are opposed to the carbon tax system and want it to be abolished, despite the Canadian government’s pledge on the issue of unpaid rebates.

"While the 2024 budget promises the government will "urgently" return the $2.5 billion in carbon tax revenue owed to 600,000 small businesses in eight provinces, entrepreneurs still do not have details on the size or timing of their rebates. In addition, while the carbon tax rate will rise again on April 1, the federal government has cut the size of the SME rebate scheme from 9% to 5% of total revenue," said Dan Kelly, CFIB president.

Kelly added that the unfairness of the system has been clear for far too long and that the carbon tax regime is broken.

Eligible small businesses in Alberta, Saskatchewan, Manitoba, Ontario and the four Atlantic provinces can claim back their share of the $2.5 billion rebates, which CFIB estimates is just 1% of the amount paid over the past five years.

To be eligible incorporated businesses with 499 paid staff or fewer must file their 2023 corporate income tax return by next Monday, July 15, 2024. CFIB believes this will be based on the number of T4s each firm issues in a given year.

Rebates will be automatic and paid by the Canada Revenue Agency in the form of a refundable tax credit.

"The rebates and the expansion of the eligibility rules would not have happened without months of CFIB's relentless advocacy," said Jasmin Guenette, CFIB's vice-president of national affairs. "As it is clear there are no plans to make the carbon tax system revenue neutral for small businesses, the regime needs to be repealed."

It’s not just businesses that are skeptical about the carbon tax. A survey last year suggested that four in ten Canadians would scrap it while others would lower it.