Small Businesses Say They’re ‘Crushed’ by Rising Costs, Call for Halt to Carbon Tax Increase

A man fills up his truck with gas in Toronto in a file photo. The Canadian Press/Christopher Katsarov

Canadian small businesses say they are suffering under the federal carbon tax program and are calling on the government to stop the tax hike planned for April 1.

“Small businesses are being crushed by rising costs on all fronts, and the upcoming April 1 carbon tax increase will only add salt to the wound,” said an email statement to The Epoch Times from Jasmin Guenette, vice president of national affairs for the Canadian Federation of Independent Business (CFIB).

“Businesses across all sectors are being impacted by the carbon tax, including those in agriculture, natural resources, manufacturing and transportation,” she said.

The CFIB has asked the government to halt the increase of the carbon tax, which is expected to increase from $65 per tonne to $80 per tonne.

The federation says 56 percent of small firms will need to raise prices if the carbon tax increases. It also noted that 45 percent of small businesses will need to freeze or reduce wages, and 33 percent have said the increased costs will hurt their ability to invest in environmental initiatives.

“The giant hike in carbon taxes further highlights how unfair this tax is for small businesses,” CFIB president Dan Kelly said. “The first thing Ottawa must do is freeze the upcoming tax hike. The whole carbon tax system has become a shell game, and sadly, small firms are unfairly punished by it.”

Waiting for Carbon Tax Rebates

Small businesses are still waiting for Ottawa to deliver on its promise of carbon tax rebates to small businesses, Mr. Kelly said.

“Ottawa is sitting on $2.5 billion in carbon tax rebates intended for small firms, calling into question the government’s claim that the tax is revenue neutral,” he said.

The organization estimates that businesses in Ontario, Manitoba, Saskatchewan, and Alberta could receive rebates of between $2,600 and $7,000, and small businesses in Atlantic Canada could receive rebates ranging from $630 to $1,060.

CFIB has started an online petition calling on Finance Minister Chrystia Freeland to pay out the carbon rebate to small businesses across the country. The document also asks that the carbon tax remain at its current level.

In February, the federal government announced it was going to reduce the amount of the rebate for small businesses from 9 percent to 5 percent, according to the Canadian Press. It also said it intends to return $623 million in carbon tax rebates to businesses for 2024-2025, down from $935 million in 2023-2024.

The Canadian Press says $35 million has been paid out to small businesses as of February 2024.

Carbon Tax Increase

The CFIB wants all heating fuels, including natural gas, exempted from the carbon tax.

Several premiers have also called on Ottawa to stop the carbon tax hike, and to end the tax on home heating, with three of them speaking in front of the Committee on Government Operations and Estimates.

Alberta Premier Danielle Smith, New Brunswick Premier Blaine Higgs, and Saskatchewan Premier Scott Moe have already appeared before the committee, while Nova Scotia Premier Tim Houston has been invited to appear.

The carbon tax is set to reach $170 per tonne in 2030.

Prime Minister Justin Trudeau has defended the tax increase, saying it is the best way to set the country up for “success in the future“ and a ”logical way” to deal with climate change.

“That’s an easy thing for short-term thinker politicians to say, ‘Oh, we’ll get rid of the price,'” he said. “They don’t talk about the fact that they’re also going to get rid of that cheque, the Canada Carbon Rebate, that puts more money in the pockets of the vast majority of Canadians.”

However, a recent online survey by Leger found that 69 percent of respondents don’t want the carbon tax hike in April, while 31 percent support it.

Christopher Tomlinson, Matthew Horwood, and Jennifer Cowan contributed to this report.