OTAWA –
Small and medium-sized business owners will receive a long-awaited refund from Ottawa, which was holding up billions of dollars while it searched for a way to give them their carbon price rebates.
The federal government is set to hand out $2.5 billion in promised revenue to business owners this year, five years after the Liberals ushered in their price on pollution.
More than 600,000 businesses are expected to receive the money later this year through a refundable tax credit, as long as they file their 2023 tax return by July 15.
The program was expanded to include more companies with fewer than 500 employees than originally planned. The Canadian Federation of Independent Business had estimated that only about 20,000 businesses would benefit.
The announcement came in Finance Minister Chrystia Freeland’s 2024 budget, which was tabled in the House of Commons on Tuesday.
“This real and significant support is a testament to our commitment to Canada’s small businesses,” Freeland said in the House of Commons.
The announcement “is a huge relief,” said Dan Kelly, president of the Canadian Federation of Independent Business, adding that businesses had become impatient.
The carbon price was designed so that more than 90 percent of the money collected from consumers and businesses would be provided to individual households in the form of a rebate.
Carbon rebates have been flowing as promised to households, but several issues, including the COVID-19 pandemic, caused other programs to fall off the mark.
“Opposition to the carbon tax has been growing from small business owners because they are just getting the stick,” Kelly said.
Finally, companies are getting their share, he said.
Rebates for consumers have given the Liberals a self-inflicted headache in recent years, and the government has opted to rename the payments so Canadians better understand what flows into their bank accounts.
Still, refunds don’t always come with clear labels, as Ottawa battles with banks over how their systems display payments.
The Liberal budget proposes changing the law so the government can require financial institutions to use specific labels for government payments.
Opposition Conservatives said they would support the budget if the government got rid of the carbon price, which they say makes life less affordable for Canadians.
But the Liberals have stuck with the policy, saying greenhouse gas emissions need to be reduced and noting that most Canadians end up with more money at the end of the day.
Addressing climate change remains a key priority for the Liberals, and several budget policies fall into the group of environmental policies.
Ottawa plans to implement a 10 per cent tax credit to attract companies to invest in Canada’s electric vehicle supply chain.
It also seeks to establish a 15 percent tax credit over the same period for eligible investments in new equipment or retrofits for clean electricity.
The budget proposes more than $900 million over six years for greener homes and energy efficiency programs.
As extreme weather events become more common, Ottawa also aims to move forward with implementing a national flood insurance program by 2025, providing $15 million to Canada Mortgage and Housing Corp.