As part of Budget 2024, the federal government has introduced an accelerated and automatic process to return over $2.5 billion to small and medium-sized businesses affected by federal carbon pricing. The Canada Carbon Rebate for Small Businesses aims to help offset rising operational costs while ensuring environmental responsibility.
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What is the Canada Carbon Rebate for Small Businesses?
The Canada Carbon Rebate for Small Businesses is a financial relief measure designed to support businesses dealing with federal carbon pricing. This rebate is available to eligible businesses operating in provinces where the federal fuel charge applies.
Eligibility Criteria
To qualify for this rebate, a business must meet the following requirements:
- Be a Canadian-controlled private corporation (CCPC).
- Have between 1 and 499 employees.
- Have at least one employee in a designated province where the federal fuel charge applies.
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How Much Can Small Businesses Expect to Receive?
The rebate amount is determined based on the number of employees a business has and the province in which it operates. Businesses can expect different rebate rates per employee, which are adjusted annually. Below is a breakdown of the specified payment rates per employee for the rebate from 2019 to 2024:
Canada Carbon Rebate Rates Per Employee (2019-2024)
| Province | 2019-20 | 2020-21 | 2021-22 | 2022-23 | 2023-24 |
|---|---|---|---|---|---|
| Alberta* | N/A | $147 | $123 | $140 | $181 |
| Saskatchewan | $110 | $271 | $244 | $298 | $233 |
| Manitoba | $48 | $99 | $77 | $89 | $168 |
| Ontario | $26 | $68 | $75 | $86 | $146 |
| New Brunswick* | N/A | N/A | N/A | N/A | $87 |
| Nova Scotia* | N/A | N/A | N/A | N/A | $119 |
| Prince Edward Island* | N/A | N/A | N/A | N/A | $82 |
| Newfoundland & Labrador* | N/A | N/A | N/A | N/A | $179 |
Note: The federal fuel charge took effect in Alberta on January 1, 2020, and in New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland & Labrador on July 1, 2023.
Example: Rebate Amounts Based on Employee Count (2019-2023)
| Province | 10 Employees | 25 Employees | 50 Employees | 100 Employees | 499 Employees |
| Alberta | $5,910 | $14,775 | $29,550 | $59,100 | $294,909 |
| Saskatchewan | $11,560 | $28,900 | $57,800 | $115,600 | $576,844 |
| Manitoba | $4,810 | $12,025 | $24,050 | $48,100 | $240,019 |
| Ontario | $4,010 | $10,025 | $20,050 | $40,100 | $200,099 |
| New Brunswick | $870 | $2,175 | $4,350 | $8,700 | $43,413 |
| Nova Scotia | $1,190 | $2,975 | $5,950 | $11,900 | $59,381 |
| Prince Edward Island | $820 | $2,050 | $4,100 | $8,200 | $40,918 |
| Newfoundland & Labrador | $1,790 | $4,475 | $8,950 | $17,900 | $89,321 |
When Will Businesses Receive the Rebate?
Businesses that filed their 2023 tax return by July 15, 2024, will receive their rebate payments by:
- December 16, 2024 – if registered for direct deposit with the CRA.
- December 31, 2024 – if receiving payment by cheque.
If a business files after July 15, 2024, but before December 31, 2024, it may still qualify for the rebate if legislation receives Royal Assent.
Future Payments and Tax Treatment
To continue receiving payments in future years, eligible businesses must file their tax returns for 2024 and beyond before July 15 of the following year.
Rebate payments will be treated as taxable income in the year they are received, as they are classified as government assistance.
Small businesses operating in provinces subject to the federal fuel charge should ensure they meet eligibility requirements and file their tax returns promptly to benefit from the Canada Carbon Rebate for Small Businesses.
If you are uncertain about your eligibility or need guidance on claiming the rebate, consulting with a tax professional is highly recommended. The rebate offers much-needed financial relief and ensures businesses remain resilient while contributing to environmental sustainability.