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Businesses will carry most of carbon tax load

Weekly gas prices.
People in Manitoba, Ontario, Saskatchewan and New Brunswick will be paying more for gasoline and heating fuel Monday when the federal government's carbon tax begins in provinces that refused to impose their own emissions pricing.

Individuals and families will be getting some money back from the federal government under the new carbon tax scheme that begins April 1.

But businesses, especially small and medium-sized ones, are still left in the dark about what rebates or exemptions may be available to them, if any.

Unlike individuals who are eligible for annual rebates from Ottawa’s “climate action incentive payment,” businesses aren’t expected to be compensated in the same way, perhaps not at all.

Large companies with certain types of operations, especially those that are “trade-exposed,” that emit 50,000 megatonnes or more of greenhouse gas emissions won’t pay the carbon tax on fuel. Instead, they’ll be subject to a carbon tax on emissions that exceed certain annual limits. Smaller firms that emit 10,000 megatonnes or more will be able to apply for the same exemption.

But most other businesses, including smaller ones, have no such exemption. There are exemptions for farmers, some fishers and greenhouse operators. But the vast majority of small and medium sized businesses are expected to pay the tax with little to no rebates or exemptions from Ottawa.

The Canadian Federation of Independent Business says they’re still trying to get answers from the federal government on what kinds of rebates, exemptions or tax credits may be available to their members, if any.

“We still don’t know what these rebates or exemptions are going to look like,” said Jonathan Alward, the CFIB’s director of provincial affairs for Manitoba. “It’s definitely concerning that residents know exactly what’s coming back to them, and even though businesses are footing the bulk of the carbon tax bill and getting pennies on the dollar back, they still don’t know what’s in it for them and largely don’t even know how the carbon tax is going to be applied, or how their exemptions are going to work.”

It appears small businesses will in large part be subsidizing the rebates handed out to individuals. About 90% of the money raised from the tax will be returned to individuals in rebates. The remaining 10% has been earmarked mostly to help municipalities, universities, public schools, hospitals and small businesses pay for costs like building upgrades to help them become more energy efficient. However, whatever does trickle their way will be far less than what they pay out in carbon taxes.

The CFIB estimates small businesses and the public sector will together pay about 50% of the carbon tax bill but will receive only 7% back in grants and rebates.

Carbon Tax Rates

April 2019
Gasoline (litre) – 4.42 cents
Diesel (litre) – 5.37 cents 
Natural gas (cubic metre) – 3.91 cents
Propane (litre) – 3.10 cents
Kerosene (litre) – 5.16 cents

April 2020
Gasoline (litre) – 6.66 cents
Diesel (litre) – 8.05 cents
Natural gas (cubic metre) – 5.87 cents
Propane (litre) – 4.64 cents
Kerosene (litre) –  7.75 cents 

April 2021 
Gasoline (litre) – 8.84 cents
Diesel (litre) – 10.73 cents 
Natural gas (cubic metre) – 7.83 cents
Propane (litre) – 6.19 cents
Kerosene (litre) – 10.33 cents

April 2022
Gasoline (litre) – 11.05 cents
Diesel (litre) – 13.41 cents
Natural gas (cubic metre) – 9.79 cents
Propane (litre) – 7.74 cents
Kerosene (litre) – 12.91 cents

Carbon Tax Rebates

                       2019    2020    2021    2022
First adult        $170    $250     $328    $402
Spouse            $85      $125     $164    $402
Child                $42      $62       $81      $99
Family of 4       $339    $499     $654    $801

– Department of Finance

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