CFIB demands action as a 23% carbon tax increase threatens small firms with higher costs and delayed rebates
The Canadian Federation of Independent Business (CFIB) has voiced strong concerns over the scheduled increase in the federal carbon tax, which is set to rise by 23 percent to $80 per tonne today.
Dan Kelly, President of CFIB, highlighted the strain this will place on small businesses across Canada. He emphasized, “The giant hike in carbon taxes further highlights how unfair this tax is for small businesses.”
The tax increase presents a significant challenge, with 56 percent of small business owners expecting to raise prices to offset the added expense.
Furthermore, 45 percent of businesses are considering freezing or reducing wages, and 33 percent believe their ability to invest in environmental initiatives will be compromised.
Kelly argues that the carbon tax system disproportionately impacts small businesses and calls for an immediate halt to the upcoming tax increase. He describes the situation as a “shell game,” with small firms bearing the brunt of the tax. Another pressing issue is the delayed rebate payments.
Kelly pointed out that “Ottawa has not delivered on promises to return a portion of carbon tax revenues to small businesses,” leaving them awaiting $2.5bn in rebates. This delay casts doubt on the government's claims of the tax being revenue neutral.
In a promising development, Deputy Prime Minister Chrystia Freeland indicated that small businesses could expect positive news regarding the overdue rebates since 2019.
CFIB estimates suggest that small firms in Ontario, Manitoba, Saskatchewan, and Alberta could receive a one-time rebate ranging from $2,600 to nearly $7,000. For the four Atlantic provinces affected by the carbon tax since July 2023, the rebates could be between $630 and $1,060.
To address these challenges, CFIB is advocating for several key actions:
- Cancel the carbon tax hike planned for April 1.
- Immediately disburse the $2.5bn in rebates owed to small businesses since 2019.
- Eliminate the proposal to allocate SME rebates solely to “emissions-intensive, trade-exposed" businesses, advocating instead for a simple rebate applicable to all SMEs.
- Reverse the decision to lower the SME share of carbon tax revenue from 9 percent to 5 percent in 2024, ensuring annual rebates reflect the tax proportion paid by SMEs.
- Enact Bill C-234 in its original form, exempting natural gas and propane used for farm activities from the carbon tax.
- Extend exemptions to include all heating fuels.
Jasmin Guenette, CFIB's vice-president of National Affairs, underscored the importance of the government addressing these concerns promptly.
“Ottawa has an opportunity to right the wrong and announce concrete plans to return the promised $2.5bn to all small businesses, not just certain sectors,” Guenette stated.
As the government finalizes its upcoming budget, small businesses across the nation are watching closely, hopeful for measures that will alleviate the financial burden imposed by the carbon tax.
