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Climate and Environment

    • Liberals to dole out five years worth of carbon rebates to businesses

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    OTTAWA -

    Small- and medium-sized business owners are set to receive a long-awaited refund from Ottawa, which was holding onto billions of dollars while it sorted out a way to deliver them their carbon pricing rebates.

    The federal government is set to dole out $2.5 billion in promised revenues to business owners this year, five years after the Liberals ushered in their price on pollution.

    More than 600,000 businesses are expected to receive the money later this year through a refundable tax credit, as long as they file their 2023 tax return by July 15.

    The program was broadened out to include more businesses with fewer than 500 employees than was originally anticipated. The Canadian Federation of Independent Businesses had estimated that only about 20,000 businesses would benefit.

    The announcement came in Finance Minister Chrystia Freeland's 2024 budget, which was tabled in the House of Commons on Tuesday.

    "This real, meaningful support is a testament to our commitment to Canada's small businesses," Freeland said in the House of Commons.

    The announcement "is a big relief," said Dan Kelly, president of the Canadian Federation of Independent Businesses, adding that businesses had grown impatient.

    The carbon price was designed so that more than 90 per cent of the money collected from consumers and businesses would be provided to individual households in the form of a rebate.

    The carbon rebates have flowed as promised to households, but various problems, including the COVID-19 pandemic, caused the other programs to stumble out of the starting gate.

    "The opposition to the carbon tax has been growing on the part of small business owners because they're only getting the stick," Kelly said.

    Finally, businesses are getting their chunk, he said.

    The rebates for consumers have given the Liberals a self-inflicted headache in recent years, with the government opting to rebrand the payments so Canadians better understand what is flowing into their bank accounts.

    Still, the rebates aren't always coming in with clear labels, as Ottawa battles with banks over how their systems display the payments.

    The Liberal budget proposes to change the law so the government can require financial institutions to use specific labels for government payments.

    The Opposition Conservatives said they would support the budget if the government got rid of the carbon price, which they argue is making life less affordable for Canadians.

    But the Liberals have stood by the policy, saying it's necessary to reduce greenhouse-gas emissions and noting that most Canadians end up with more money at the end of the day.

    Tackling climate change remains a key priority for the Liberals, and several budget policies fall into the environmental policy bucket.

    Ottawa is planning to implement a 10 per cent tax credit to attract companies investing in Canada's electric-vehicle supply chain.

    It's also aiming to put in place a 15 per cent tax credit over the same period for eligible investments in new equipment or refurbishments for clean electricity.

    The budget proposes more than $900 million over six years for greener homes and energy efficiency programs.

    As extreme weather events become more common, Ottawa also aims to advance the implementation of a national flood insurance program by 2025, providing $15 million to the Canada Mortgage and Housing Corp.

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