Ottawa expands broken carbon tax system to Atlantic Canada on July 1 despite making no progress to fix it

Toronto, – As small businesses in Atlantic Canada are bracing for a carbon tax hike on July 1, the Canadian Federation of Independent Business (CFIB) is calling on the federal government to keep its promise and return federal carbon tax proceeds to small businesses across the country.

“Before Parliament closes for the summer, Ottawa needs to consider the impacts of the carbon tax hike on small businesses. If the federal government can afford subsidizing large foreign companies, it surely can deliver on the rebate to small businesses it promised a few years ago already,” said Jasmin Guénette, Vice-President of National Affairs at CFIB. “While households and individuals receive rebates to offset increased costs, small businesses are being left on the sidelines. That’s not fair, and Ottawa needs to stick to its word.”

Atlantic provinces are moving under the federal carbon pricing system, joining Alberta, Saskatchewan, Manitoba and Ontario, where the federal carbon tax is already in effect, having increased to $65 per tonne on April 1.

With small businesses barely keeping their heads above water, the carbon tax increase comes at the worst time. Nearly two-thirds of small business owners (64%) across Canada said taxes are a serious concern to their business in a recent CFIB survey, and only 44% are making normal revenues.

A recent CFIB report also estimates that despite collecting $22 billion in carbon pricing revenues, the federal government returned only 0.17% of the promised carbon tax proceeds to small businesses between the 2019-20 and 2022-23 fiscal years. 

With just over a week left before the carbon tax is implemented in Atlantic provinces, CFIB is urging Ottawa to:

• Freeze the federal carbon pricing backstop at the current level 
• Immediately return $2.5B in federal carbon tax revenues it has collected from small businesses since 2019 
• Ensure all future carbon tax revenue collected from small businesses is returned through simplified rebates or tax reductions
• Reconsider the entire carbon pricing strategy with a focus on technology and other approaches to reduce greenhouse gas emissions

“With the carbon tax hike, loads of pandemic debt and high borrowing costs, small businesses have to work twice as hard just to keep their lights on, let alone make any profit,” said Louis-Philippe Gauthier, CFIB Vice-President in Atlantic Canada. “In addition to that, the Clean Fuel Standard comes into effect on July 1 and businesses face uncertainty as we still don’t know exactly how this will impact prices at the pump across the Atlantic. CFIB calls on federal and provincial governments to work together with small businesses to mitigate the negative impacts of the carbon tax hike.”