March 23, 2023
Despite collecting billions in carbon tax revenues, the federal government has returned less than 1% of the promised proceeds to small businesses, says the Canadian Federation of Independent Business (CFIB). On top of that, the government is proceeding with a carbon tax hike of 23% to $65 per tonne on April 1.
“Small businesses in Canada are already struggling with increased costs, and the carbon tax is adding to their burden,” said Jasmin Guénette, Vice-President of National Affairs at CFIB. “The government must take immediate action to provide relief to small businesses by freezing the carbon pricing backstop and making the promised federal carbon tax proceeds readily available.”
Small businesses contribute significantly to the federal carbon tax, but they don’t get the same amount back like individuals and households do through rebates.
In fact, while CFIB’s calculations estimate that small firms pay close to half of the carbon tax revenue collected by government, only 0.17% in all carbon tax revenues was returned to small businesses between the 2019-20 and 2022-23 fiscal years. Between those years, the federal government raised $22 billion in carbon pricing revenues. With the carbon tax increasing to $65 per tonne, about $8.2 billion is expected to be collected from the carbon tax alone in 2022-23.
Similar to small businesses in Alberta, Saskatchewan, Manitoba and Ontario, small firms in Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island will soon be moving under the federal carbon pricing system on July 1, 2023.
