CFIB looks for good news on carbon tax for small businesses in upcoming federal budget

carbon tax

The Canadian Federation of Independent Business is calling on the federal government to freeze the federal carbon tax and assess the possibility of implementing a simpler rebate program for small businesses. 

On April 1, the federal carbon tax increased by 23 per cent to $80 per tonne, which amounts to 17.71 cents a litre on gas in Ontario, an increase of approximately three cents. 

For small business owners, those costs can add up, according to Christina Santini, director of national affairs for CFIB. 

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“We understand that (the carbon tax) is a keystone of (the government’s) environmental agenda, but we’ve seen a dramatic shift in support from our members,” she said. “What we’re hearing is that it doesn’t seem to be effective or fair.”

Santini added that she hopes to see the rebate issue addressed in the upcoming 2024 federal budget, which will be released next week. At a recent meeting, she said, Deputy Prime Minister and Minister of Finance Chrystia Freeland mentioned that good news was coming soon regarding the billions owed to small businesses.  

In a recent CFIB survey, 82 to 85 per cent of members were against the carbon tax, up from just 52 per cent in 2022. Santini said business owners are seeing an impact on the cost of their operations, while not receiving their share of any sort of rebate. 

The survey also found that 56 per cent of small businesses will need to raise their prices, 45 per cent will need to freeze or reduce wages, and 33 per cent will have less capacity to invest in environmental initiatives, including measures to reduce their emissions. One small business owner recently told OBJ that he was expecting to take a hit following the increase.

“The government says, ‘The carbon tax is going up April 1, but many of you will also see rebates increase as well,’” she said. “The reality is that the money that was set aside for small businesses has never been distributed back to small businesses.”

Unlike individuals, who receive quarterly carbon tax rebates, businesses are faced with a much more complex system and, according to Santini, many have received no rebates at all. 

Since the tax was introduced in 2019, the federal government has set aside $2.5 billion in carbon tax rebates intended for small businesses, specifically “emissions-intensive, trade-exposed” businesses that are disproportionately affected by the added cost. Santini said only 0.17 per cent of that cash has been returned to date.  

“We’re calling on the government to give that money back to small businesses,” she said. 

CFIB also wants the government to simplify the process for businesses and introduce a rebate system like the one in place for individuals. 

“Ultimately, (the current program) is keeping people out who pay to access it, creating very niche and targeted programs,” she said. “That’s why we’re basically saying, just keep it simple. If they’ve paid into it, allow them to get a rebate. Allow those who have paid to see some of the money come back to them, as is the case for individuals.”

While businesses are concerned about the carbon tax, Santini said many are still eager to do their part to address climate change concerns. 

“It’s still important for small business owners,” she said. “Many of them try to put in place lots of practices that are environmentally friendly within their operations. It’s not the environment that isn’t important. It’s that the cost is getting so great.”

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