CANADA—The Canadian Federation of Independent Business (CFIB) has levelled serious accusations against the federal government, claiming that over $2.5 billion in carbon tax revenues, collected since 2019 from small businesses across Ontario, Manitoba, Saskatchewan and Alberta, has yet to be returned. This comes despite promises that a portion of these funds would be rebated to small businesses, farmers, and Indigenous communities.
As the carbon tax is set to rise to $80 per tonne on April 1, the urgency for the government to act on its promises has intensified. Dan Kelly, president of CFIB, expressed concerns over the absence of a system to return the carbon tax revenues, especially with the tax’s expansion to the Atlantic provinces last July. The CFIB’s findings suggest that small businesses bear 40 percent of the carbon tax’s financial burden but have been allocated a mere 10 percent of the revenue, which has largely remained undistributed.
Amid increasing pressures, some Indigenous organizations have initiated legal action against the federal government, underscoring the widespread frustration with the current carbon tax system. Mr. Kelly criticized the government’s selective approach to rebates, noting that only businesses in specific sectors are considered for rebates, leaving many to shoulder the tax’s full weight.
However, The Expositor spoke with Mike Johnston, a Providence Bay farmer who said the carbon tax issues hasn’t had much of an effect on their operation because if they do only 250 acres of cash cropping per year—canola, barley and cattle feed. “We don’t use any propane for heating and really on natural drying for our crops. Heating for home is wood and hot water. We applied for the farm exemption for diesel fuel so it hasn’t affected much as far as that goes. Aside from the purchase of inputs we are not overly concerned about the rebate at the moment. Most of the farmers on the Island don’t use dryers to my knowledge. Most of us use large fans, choose a dry date where the weather is good and blow air through the harvest.”
Further complicating the issue, the CFIB is alarmed by potential government plans to reallocate funds intended for small business rebates to cover increased rural consumer rebates. This shift in allocation, confirmed by the Deputy Prime Minister’s office, would effectively reduce the already promised support for small businesses.
In response to the growing financial strain on small enterprises, the CFIB demands immediate action from the federal government. Their calls include the swift return of the $2.5 billion owed to businesses in the affected provinces, the establishment of a straightforward rebate system for ongoing carbon tax revenues, and legislative changes to exempt certain fuels from the tax.
Additionally, Premier Doug Ford of Ontario has announced proposed legislation requiring a referendum for any future provincial carbon taxes, highlighting the growing discontent with the federal government’s handling of carbon pricing.
The CFIB is demanding swift action from the federal government to disburse the funds equitably. As pressure mounts, Ontario’s share of this sum, exceeding $1.3 billion, amplifies calls for urgent intervention.
With each active, incorporated business in Ontario poised to receive $2,637 from the earmarked $1.3 billion, the CFIB emphasizes the critical need for immediate settlement. Ryan Mallough, CFIB’s Ontario vice president, laments the prolonged delay, asserting, “It’s deeply unfair that five years into the program, Ottawa is still sitting on $1.3 billion it owes to small firms.”
Recent announcements by the federal government exacerbate concerns, as the reduction of financial relief from carbon tax revenues for businesses in 2024 has been slashed from nine percent to five percent. Julie Kwiecinski, CFIB’s Ontario director of provincial affairs, condemns the move, highlighting the strain on small business owners. “Ottawa is already taking future funds out of small business owners’ pockets,” she remarks.
The CFIBs is demanding the immediate reimbursement of the $2.5 billion owed to Canadian small businesses, including the $1.3 billion for Ontario firms.
Ms. Kwiecinski reiterates the urgency of rectifying the flawed carbon tax rebate system, emphasizing, “The federal government must immediately fix the broken carbon tax rebate system. Small businesses deserve to be treated fairly.”
As small businesses across Canada unite in the fight for equitable treatment, the CFIB encourages entrepreneurs to add their voices to the cause by signing their petition. With mounting pressure, the federal government faces increasing calls for decisive action to honour its commitments to Canada’s small and medium-size enterprises.
The CFIB’s stance is backed by a recent survey indicating that over half of the small businesses oppose the current carbon pricing system, with many expressing concern over the impact of future tax increases on their operations. The federation is rallying small businesses to sign a petition calling for fairness in carbon taxation, emphasizing the need for the government to recognize and address the financial hardships faced by these critical contributors to the Canadian economy.
As debates over carbon taxation continue, the CFIB’s push for transparency, fairness and immediate action reflects the broader concerns of the small business community in Canada. With legislative changes and potential legal challenges on the horizon, the issue of carbon tax rebates remains a contentious topic, with significant implications for the future of small businesses across the nation.
