December could be financially fortunate for hundreds of thousands of Canadian businesses, as they are set to receive a cut of a major $2.5 billion rebate from the federal government.
According to the Department of Finance, the government is delivering on its commitment to return proceeds from the carbon tax to eligible small and medium businesses by the end of the year through its Canada Carbon Rebate for Small Businesses.
“…a portion of fuel charge proceeds from 2019-20 through 2023-24 will be returned to approximately 600,000 Canadian-controlled private corporations with one to 499 employees through this new refundable tax credit,” the government said.
How much can a Canadian business get from the carbon tax rebate?
Depending on the number of employees and which province or territory that business is in, this could mean thousands of dollars.
An Ontario company with 10 employees, for example, could get about $4,000, whereas a company in Saskatchewan with 50 employees could get a cheque for $50,000.
Businesses that filed their 2023 tax returns before July 15 this year could receive their payment by December 16 if they registered for direct deposit or December 31 if they are receiving a cheque in the mail. Those payments will come separately from CRA tax refunds.
If you missed the July deadline, there might still be hope that your business will see the cash soon.
It is also being floated in parliament that corporations that file their tax return for 2023 after July 15, 2024, and on or before December 31, 2024, would be eligible. However, it’s not yet official.
“Legislation enacting these changes requires Royal Assent before payments can be issued to businesses filing after the initial July 15 deadline,” the government stated online.
Who doesn’t get a carbon tax rebate?
Eligibility for the federal rebate depends on a few factors. Only Canadian-controlled private corporations qualify; sole proprietorships and partnerships are not eligible. Plus, larger companies with over 500 employees won’t get the money.
But it doesn’t matter if your small business employs people full-time, part-time, or seasonally. It all depends on the T4 slips issued in the calendar year.
To determine how much money your business could get, head to the CFIB calculator.
B.C. and Quebec left in the cold
But while this will be good news for many struggling businesses ahead of the holidays, two provinces are not on the list of eligible places, and those business owners won’t see a dime from the fund. B.C. and Quebec, which have an independent carbon pricing model, don’t qualify.
That’s been a point of contention for many businesses, according to the Canadian Federation of Independent Business (CFIB), which is advocating for B.C. to change its rebate rules, while also urging the federal government to end the carbon tax altogether. The non-partisan organization represents almost 10,000 companies in B.C. alone, many of which he says would really benefit from seeing a rebate.
Jairo Yunis is the director for British Columbia and western economic policy with CFIB and says rebates partially offset demands as “the economic pressures have been relentless over the past few years.”
“That’s our advocacy, our fight here in B.C., to get more money back to British Columbians and get money back to small businesses,” Yunis said.
He said that while the organization no longer supports the federal carbon tax model, it still believes that the increasing carbon tax costs should be paid out to everyone, not only individuals and families.
“The federal government rebates 90 per cent of the revenues to households and the rest to small businesses and indigenous communities. The B.C. government uses 40% of the revenues to fund a climate action tax credit for low-income households, and the remaining 60 per cent just goes into general revenue,” Yunis said.
He said that if B.C. had a similar program, it would go a long way.
“[It] would signal to [businesses] that the government is really serious when they talk about affordability. It’s not only affordability for households, but also for businesses. Businesses, like small businesses in the province, only want to do what they do best, which is provide essential and affordable services… and they can’t do [that] at affordable prices because of all these costs, plus the carbon tax,” he said.
Would B.C. change its model? Time will tell
B.C. Premier-elect David Eby did address his campaign promise to scrap the tax, which angered many and was used as political fodder by the Conservatives, who accused him of flip-flopping on the party’s so-called environmental focus ahead of the election.
Eby doubled down on Tuesday in his first address after the narrow victory was made official, announcing that he would honour that promise.
“The commitment we made to British Columbians was we weren’t going to force them to choose between a government that took climate change seriously and would take action on climate change, and them being able to cover their grocery costs and cover their rent,” he said.
“We know that people are struggling with affordability, so yes, we will keep our commitment to British Columbians. If the federal government moves away from the backstop, we will get rid of the carbon tax, and we remain committed to addressing the struggles that people are having in our streets with mental health and addiction,” he added.
We reached out to the Office of the Premier for comment on next steps but did not receive a response in time for deadline.
