A small business advocacy group is re-upping calls to eliminate the carbon tax, after it says the Canada Carbon Rebate for small businesses is a taxable benefit. (The Canadian Press/Christopher Katsarov)
OTTAWA — Deputy Prime Minister and Finance Minister Chrystia Freeland announced on Tuesday that the carbon rebate for small businesses in Canada will be tax-free. Her clarification came after concerns were raised by a small business advocacy group about the rebate being treated as taxable income.
Dan Kelly, president and CEO of the Canadian Federation of Independent Business (CFIB), shared on social media that he had received a phone call from Freeland, who reassured him that the rebate would not be subject to taxes.
Earlier, the CFIB had raised concerns in a letter to Freeland dated November 6. The organization said that while the Canada Revenue Agency (CRA) initially confirmed the rebate would be tax-free, they later received information from the Finance Department suggesting it would be taxable.
The Canadian Press reached out to both the CRA and Freeland’s office for clarification, but only received a response after Freeland posted her statement on social media late Tuesday.
In his letter to Freeland, Kelly emphasized that the rebate was intended to return taxes paid by small businesses, not to act as a gift from the government. He compared the situation to taxing an income tax refund. Kelly also pointed out that 83% of the CFIB’s 97,000 members want the carbon tax repealed.
The carbon rebate program, introduced in this year’s federal budget, is set to return $2.5 billion of carbon price revenue to about 600,000 small and medium-sized businesses. While Kelly acknowledged Freeland’s efforts in securing the rebate, he noted that it may not change the opposition of his members to the carbon tax. However, he expressed hope that the rebate would help restore some financial balance for small businesses.
