National Budget 2024 Reveals Small Business Carbon Rebate Promised 5 Years Ago

The federal government has announced plans to return over $2.5 billion collected through the carbon price’s fuel charge to small businesses in Canada. This initiative, known as the Canada Carbon Rebate for Small Businesses, aims to provide direct payments to eligible businesses through a refundable tax credit.

Approximately 600,000 businesses with 499 or fewer employees will be eligible to receive this refund, which is separate from CRA tax refunds. The government’s decision to return this money follows a commitment made in 2019 to give back the funds collected through the fuel charge.

While some experts have expressed doubts about whether this refund will significantly lower prices for consumers, it is seen as a step towards addressing affordability challenges. The Canadian Federation of Independent Business has long advocated for the return of the money collected through the fuel charge to small businesses.

In addition to the small business rebate, the government has also proposed implementing the Clean Electricity Tax Credit, with plans to invest $7.2 billion over the first five years of the program. The goal is for Canada to achieve a net-zero electricity grid by 2035, with incentives for private companies to invest in low-emission electricity generation.

Overall, these measures are part of the government’s efforts to address climate change and support businesses and households in transitioning to a more sustainable and affordable energy future.