CFIB says small businesses should be paid the money without further delay
Small businesses are waiting for a combined $2.5 billion tax rebate from Ottawa, as the cost of doing businesses continues to be negatively impacted by taxation.
But there’s no sign of the rebate being paid, despite being based on tax collected five years ago.
The Canadian Federation of Independent Businesses says the money due is a repeatedly promised 10% rebate on the carbon tax revenue collected in 2019 in Ontario, Manitoba, Saskatchewan, and Alberta. Small businesses, farmers, and Indigenous people were all in line for the rebate but almost zero has been returned, the CFIB says.
"This is particularly troubling as the tax was expanded to all four Atlantic provinces in July of last year. said CFIB president Dan Kelly. “There is no mechanism in place to return a dime to small businesses paying the federal carbon tax in eight provinces. No wonder some Indigenous organizations are taking the federal government to court."
The tax is being increased to $80 per tonne in April having increased steadily from the $20 per tonne it started at in 2019.
The CFIB says that small businesses already pay an oversized share of the carbon tax burden. It calculates that this sector of the economy pays 40% of the costs of the tax with the 10% rebate only applying to emissions-intensive and trade exposed sectors, “whatever that means,” added Kelly.
The organization also suspects that the 10% rebate will be withheld from small businesses to pay for cuts for consumers. A poll in November last year found that most consumers who responded are in favour of either freezing, lowering, or scrapping the carbon tax, at least during the cost-of-living crisis.
"The Deputy Prime Minister's office confirmed the changes will be funded through an 'excess allocation in future years,' which we interpret as the 10% that is supposed to be returned to small business," Kelly said. "Canada's carbon tax system is a mess and is deeply unfair to Canada's small businesses who are the second largest payer of the levy after consumers. It's not surprising that a strong majority of small firms are now opposed to the federal carbon tax regime."
The CFIB says that Ottawa should do several things while it considers how the carbon tax regime will operate in the future:
- Immediately return the $2.5 billion owed to all small businesses in Ontario, Alberta, Manitoba and Saskatchewan.
- Immediately develop a simple rebate formula to return 10% of ongoing carbon tax revenue to small businesses across all eight provinces on a quarterly basis, with a plan to raise it to 40%.
- Reject the Senate amendments and expedite the passing of Bill C-234 to exempt natural gas and propane used for on-farm activities, as originally drafted.
- Freeze the carbon tax at its current level.
- Exempt all heating fuels, including natural gas.
"With the new year bringing new costs, we're calling on Ottawa to take some concrete action and do more to help small businesses facing financial hardships. The government can show small firms that it's listening to them by freezing the carbon tax while fixing the broken carbon backstop system," said Corinne Pohlmann, Executive Vice-President of Advocacy at CFIB.
