Less than 1 percent of the $22 billion collected by the federal government in carbon tax revenues over the past four years has been returned to small businesses across Canada, says a new report.
The Canadian Federation of Independent Business (CFIB) estimates that, although small businesses pay nearly half of all carbon-tax revenue collected by Ottawa, the federal government has returned only 0.17 percent of the total amount to small businesses between the 2019–20 and 2022–23 fiscal years, as first reported by Blacklock’s Reporter.
“To date, they [small businesses] have received little or nothing at all in carbon tax revenues from the federal government,” said CFIB senior policy analyst Taylor Brown in a news release on March 22. “Businesses want their money back.”
The news release also noted that the federal carbon tax is set to increase again on April 1 and that CFIB data shows 52 percent of small businesses oppose carbon pricing.
Only 13 percent support carbon pricing outright, according to a CFIB report published March 22, titled “Fueling Unfairness: Carbon Pricing and Small Businesses,” based on a survey the organization conducted in August-September 2022,
Ottawa’s current climate plan dictates a 23 percent hike to the federal carbon tax on April 1, which will bring the price of fuel up to $65 per tonne.
The price of fuel is set to rise by $15 every year until 2029–30, by which time fuel will cost $170 per tonne, according to government figures.
The CFIB said its research found that 56 percent of Canadian small businesses say they will need to raise their prices to offset the higher costs.
The CFIB’s research also found that 45 percent of small-business owners say the higher tax rates on carbon will increase pressure on them to freeze or cut their employees’ salaries and wages, and 40 percent say it will cause them to reduce investments in their business.
“Small businesses in Canada are already struggling with increased costs, and the carbon tax is adding to their burden,” said Jasmin Guénette, CFIB’s vice-president of National Affairs, in the news release. “The government must take immediate action to provide relief to small businesses by freezing the carbon pricing backstop and making the promised federal carbon tax proceeds readily available.”
The federal Conservatives have voiced stiff opposition to the Liberal government’s planned carbon-tax increase, and Conservative Leader Pierre Poilievre introduced a motion last September to stop the increase set for April 1 this year.
Poilievre argued that the hike “will fuel inflation” and said the carbon tax drives up the cost of domestic production and causes more companies to outsource to foreign countries, which in turn requires higher transportation costs and causes more emissions in order to bring the products back to Canada.
However, Poilievre’s motion was defeated in the House, with the Liberals, NDP, and Bloc Quebecois all voting against it.
Cabinet has defended the planned carbon-tax hike, with Environment Minister Steven Guilbeault saying in September 2022 that it puts a “price on pollution.”