A promised carbon rebate will be delivered to small and mid-sized Canadian businesses before year-end, provided they filed their 2023 tax return by July 15, 2024. Finance Minister Chrystia Freeland has confirmed the details of the refundable tax credit, which was first announced in the 2024 federal budget. About 600,000 enterprises with fewer than 500 employees qualify for a rebate on the federal fuel charge collected between the 2019-20 and 2023-24 fiscal years.
That will be disbursed in the eight Canadian provinces (excepting British Columbia and Quebec) that currently subscribe to the federal fuel charge rate. Total payouts will be lower in the four Atlantic provinces, which adopted the federal backstop scheme for carbon pricing as of 2023-24, and in Alberta, which came on board in 2020-21. Eligible recipients in Ontario, Manitoba and Saskatchewan can expect five years’ worth of rebates.
As well, the total rebate amount for each province is divided by the total number of workers that qualifying businesses employ. Thus, the per-employee rebate varies from province to province — ranging from $82 in Prince Edward Island to $233 in Saskatchewan for the 2023-24 fiscal year.
“The tax credit amount will be equal to the number of persons employed by the eligible corporation in the province in that calendar year multiplied by a payment rate specified by the Minister of Finance for the province for the corresponding fuel charge year,” a government backgrounder advises. “Payment amounts vary between jurisdictions due to differences in the amount of fuel charge proceeds collected in that province and the number of employees that eligible corporations that will receive payments had in that province.”
Canada Revenue Agency will calculate and issue the rebates directly to qualifying businesses. The government is also proposing to allow businesses that missed this year’s July 15 filing deadline to receive rebates for the 2019-20 to 2023-24 period if they have filed their 2023 tax returns by December 31, 2024. However, that will require authorizing legislation.
