ottawa –
Deputy Prime Minister and Minister of Finance Chrystia Freeland said Canada’s carbon rebate for small businesses will be tax-free.
Freeland clarified the terms of the program in a statement posted to X late Tuesday after small business advocacy groups raised concerns that the rebates would become taxable.
Dan Kelly, president and CEO of the Canadian Federation of Independent Business, posted on the He posted that he had provided.
In a Nov. 6 letter to Freeland, CFIB said it was initially told by the Canada Revenue Agency that the rebates would be tax-free, but was later told by the Treasury Department that the rebates were actually taxable.
The Canadian Press contacted both the CRA and Freeland’s office on Monday and Tuesday for clarity and comment. The CRA said information would be available midweek.
Freeland’s office did not respond to requests Monday and Tuesday until a spokesperson sent a link to the minister’s social media post shortly after it was posted Tuesday night.
In a letter to Freeland last week, Kelly said the rebates are for taxes paid by small businesses and are not a “gift” to small businesses from the general fund.
“This would be the same as imposing income tax on your income tax return,” he said.
Kelly also said 83% of the group’s 97,000 members want carbon prices abolished.
Canada’s small business carbon rebate is a measure introduced in this year’s federal budget that will rebate $2.5 billion in carbon price revenues to about 600,000 small businesses.
In his letter, Mr. Kelly praised Ms. Freeland and thanked her for her work in making the rebate a reality.
“While this will not change the fact that our members currently oppose a carbon tax, rebates will help governments fulfill long-standing commitments to small businesses and restore some degree of revenue neutrality. It will be helpful,” Kelly wrote.
This report by The Canadian Press was first published Nov. 12, 2024.
