Less than 1% of the $22B in federal carbon tax revenues have been returned to small businesses, CFIB says

by Morinville Online Staff

The Canadian Federation of Independent Business (CFIB) is calling on the federal government to reconsider the federal carbon pricing backstop. Despite collecting billions in carbon tax revenues, the federal government has returned less than 1% of promised proceeds to small businesses while planning to increase the tax by 23 per cent to $65 per tonne on Apr. 1.

“Small businesses in Canada are already struggling with increased costs, and the carbon tax is adding to their burden,” said CFIB Vice-President of National Affairs  Jasmin Guénette. “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.”

CFIB argues that Canadian small businesses contribute significantly to the federal carbon tax but do not get the flow of funds back through rebates as individuals and households do. The business lobby group says their calculations estimate close to half of Canada’s carbon tax revenue is paid by small businesses. However, only 0.17% of all carbon tax revenues were returned to small businesses between the 2019-20 and 2022-23 fiscal years, a period in which the feds collected $22 billion in carbon pricing revenues.

A recent member survey indicates 56 per cent of businesses will have to increase prices to offset costs if the tax on carbon increases to $170 per tonne in 2030—as per the federal government’s climate plan.

“Our research shows business owners care about the environment and take proactive steps to reduce their environmental footprint. But to date, they have received little or nothing at all in carbon tax revenues from the federal government,” said CFIB senior policy analyst Taylor Brown. “Businesses want their money back.”

CFIB is calling on the federal government to freeze the federal carbon pricing backstop at the current level and immediately return $2.5 billion n federal carbon tax revenues it has collected from small businesses since 2019. additionally, the business lobby organization wants the government to ensure all future carbon tax revenue collected from small businesses is returned through simplified rebates or tax reductions and to reconsider the entire carbon pricing strategy with a focus on technology and other approaches to reduce greenhouse gas emissions.

“The federal government must act now to provide immediate relief to small businesses in Canada,” said Dan Kelly, CFIB president. “Freezing the carbon tax while government focuses on fixing the broken backstop approach would be welcome news in the 2023 budget.”

CFIB’s snapshot is available online at: Fueling Unfairness: Carbon Pricing and Small Businesses,

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