Ottawa owes SMEs $2.5 billion in rebates and counting

Toronto, March 28, 2024 – Small business owners will not be laughing when the federal carbon tax jumps by 23% to $80 per tonne on April 1, says the Canadian Federation of Independent Business (CFIB). 

“The giant hike in carbon taxes further highlights how unfair this tax is for small businesses,” said Dan Kelly CFIB president. While over half (56%) of small firms will be forced to raise prices to accommodate the tax, 45% report they will need to freeze or reduce wages, and a full third (33%) say it will reduce their ability to invest in environmental initiatives. “The first thing Ottawa must do is freeze the upcoming tax hike. The whole carbon tax system has become a shell game, and sadly, small firms are unfairly punished by it.” 

“Making the problem worse is the fact that Ottawa has not delivered on promises to return a portion of carbon tax revenues to small businesses,” Kelly said. “Ottawa is sitting on $2.5 billion in carbon tax rebates intended for small firms, calling into question the government’s claim that the tax is revenue neutral.” 

CFIB was pleased to hear Deputy Prime Minister Chrystia Freeland say at a recent committee meeting that small businesses will soon have some good news on the billions owed to them since 2019.  “This can’t come soon enough,” Kelly added.  

CFIB estimates that small firms in Ontario, Manitoba, Saskatchewan and Alberta, the provinces under the federal carbon backstop since 2019, could receive a one-time rebate between $2,600 and nearly $7,000. In the four Atlantic provinces that came under the carbon tax in July 2023, rebates would be between $630 and $1,060.  

CFIB continues to push for fairness for small businesses and urges the government to:  

  • Drop the planned carbon tax hike on April 1. 
  • Immediately return the $2.5 billion owed to all small businesses since 2019.
  • Scrap the idea of returning the SME allocation only to “emissions-intensive, trade-exposed” businesses in favour of a simple rebate for all SMEs.   
  • Reverse the plan to reduce the SME share of carbon tax revenue from 9% to 5% in 2024 with annual rebates rising to the share of the tax paid by SMEs.   
  • Pass Bill C-234 as originally proposed to exempt natural gas and propane used for on-farm activities, including grain drying and heating farm buildings.  
  • Exempt all heating fuels, including natural gas. 

“Ottawa has an opportunity to right the wrong and announce concrete plans to return the promised $2.5 billion to all small businesses, not just certain sectors,” said Jasmin Guenette, CFIB’s vice-president of national affairs. “We hope the government listens to small business concerns and will announce details of a plan to keep its promise in the upcoming budget.” 

Small businesses can add their voice to CFIB’s fight for carbon tax fairness by signing CFIB’s petition. 

For media enquiries or interviews, please contact:  
Dariya Baiguzhiyeva, CFIB  
647-464-2814  
[email protected]    

Methodology 
Final survey results for the Environment Survey 2022, conducted from August 15 – September 20, 2022, and based on a sample of 4,364 CFIB members. For comparison purposes, a probability sample with the same number of respondents would have a margin of error of +/-1.5%, 19 times out of 20.  

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 cfib.ca. 

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