On October 1, 2024, the Canadian federal government announced that it is set to return proceeds from the carbon tax to small and medium-sized businesses in Canada.
As part of Budget 2024, the government introduced an accelerated and automated process to directly return over $2.5 billion to nearly 600,000 small and medium-sized businesses in provinces where the federal fuel charge is in effect – including Saskatchewan – through the newly established Canada Carbon Rebate for Small Businesses.
Updated information on this initiative from the December 16th released Fall Economic Statement has been highlighted at the bottom of this article.
Eligible Businesses & Rebate Amounts
Eligible businesses include Canadian-controlled private corporations that filed their tax returns for the 2023 tax year by July 15, 2024. Businesses will automatically receive payments through the Canada Revenue Agency (CRA), with no further application required.
In Saskatchewan, a business with 10 employees throughout the filing period can expect a rebate of $11,560, while a business with the maximum of 499 employees in this timeframe could expect a rebate of $576,844.
See below for the full per-employee breakdown of payments for small businesses in each province.
Specified Payment Rates Per Employee for the Canada Carbon Rebate for Small Businesses, 2019-20 to 2023-24
| 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 and Labrador* | n/a | n/a | n/a | n/a | $179 |
| * As the federal fuel charge only came into effect as of January 1, 2020 in Alberta, and as of July 1, 2023 in New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador, small businesses in these provinces will receive payments for proceeds collected after those respective dates. Table courtesy of Government of Canada website. | |||||
Timing of Rebate Payments
Eligible businesses who have met the 2023 filing deadline criteria and have direct deposit set up through Canada Revenue Agency can expect their rebate on December 16, 2024, while businesses without direct deposit will receive a cheque by December 31, 2024.
What action do I need to take to receive my rebate?
Rebates will be automatically distributed to eligible businesses. No further action is required.
What if I missed the 2023 filing deadline?
Businesses that missed the initial filing deadline but filed their 2023 tax returns afterward could still qualify for the rebate. A 2023 filing deadline extension of December 31, 2024 has been proposed.
*Updated from 2024 Fall Economic Statement
The 2024 Fall Economic Statement outlines that the design elements and eligibility of the Canada carbon rebate for the 2024–2025 and later years will be modified. In particular:
- Cooperative corporations and credit unions will qualify for the credit.
- Small businesses that have less than 20 employees would qualify for a payment amount that is equivalent to having 20 employees.
- Larger businesses with over 300 employees and up to 500 employees will have their payments gradually reduced on a straight-line basis.
Conclusion
The Small Business Carbon Rebate is significant for many small and medium-sized businesses. If you have questions or are unsure if your business meets the qualifications to receive this rebate, we strongly encourage you to contact your accountant or Virtus Advisor.
Further Resources
For complete details regarding this announcement, refer to the resources below from the Government of Canada:
Canada Carbon Rebate for Small Businesses Payment Amounts, 2019-20 to 2023-24
Government announces significant new support to help small business owners
