The federal government has confirmed that small businesses will have to pay tax on their carbon rebate, despite government promises otherwise, because Parliament can91裸聊视频檛 currently pass legislation to make the payment exempt from income taxes.

But if legislation passes to do that the government says the businesses can apply for a rebate for the taxes paid on their rebate.

Dan Kelly, president and CEO of the Canadian Federation of Independent Business says the situation is a 91裸聊视频渕ess.91裸聊视频�

Smaller and medium-sized businesses without a large carbon footprint pay the carbon price on fuel inputs the same way an individual consumer does, including buying gas for fleet vehicles or heating and powering their offices.

Initially the government was going to set aside seven per cent of revenues collected from the consumer carbon levy to provide funding to smaller businesses to reduce their energy use. But those programs never worked, and by 2024 more than $2.5 billion in carbon price revenue was owed to those businesses from five years of paying the levy.

In the 2024 budget, then finance minister Chrystia Freeland said the money would be paid to 600,000 small and medium businesses, and those payments were finally paid in December.

In November Freeland declared that those rebates would be 91裸聊视频渢ax free.91裸聊视频�

But legislation to make that happen never happened amid the filibuster that stalled all business in the House of Commons throughout the fall, and now the Liberals91裸聊视频� decision to prorogue Parliament until the end of March.

Marie-France Faucher, a spokesperson for the finance department, said in a statement the government is committed to making the rebate tax-free. Until then, small businesses will continue paying taxes on carbon rebates.

91裸聊视频淎 legislative amendment to implement this change will be tabled at the earliest opportunity,91裸聊视频� Faucher said in an email.

That could be months away still.

Parliament is currently prorogued until Mar. 24 but it91裸聊视频檚 widely expected that an election will be called before then by the new Liberal leader, and if not, that the opposition parties would trigger an election soon after.

Once legislative steps have been taken, Faucher says taxpayers who have already filed their returns could file an amended tax return 91裸聊视频渢o have their taxable income for the year adjusted accordingly.91裸聊视频�

The department didn91裸聊视频檛 confirm exactly how small businesses would be repaid.

The CFIB wants Parliament recalled to pass legislation to make the rebate tax free and increase the share of revenues paid to businesses to nine per cent. It also wants the government not to raise the levy on April 1. The price is scheduled to go up $15 per tonne each year until 2030.

Kelly says he has concerns about whether small businesses will be paid back, especially given that carbon tax rebates may not be a priority for any future government.

91裸聊视频淭he Conservatives have informally told us that they will make good on this and make it tax free,91裸聊视频� said Kelly. 91裸聊视频淚 am concerned that if Freeland, Carney or the Conservatives kill the carbon tax, that somehow the billions that have been collected don91裸聊视频檛 just disappear in the ether.91裸聊视频�

If legislation passes, Kelly says making an adjustment to their tax returns would be a lot to ask of small businesses and that many would just forget to do so. He says he expects that those who do file an adjustment would be paid back by cheque or a credit to their business91裸聊视频� CRA account.

91裸聊视频淭here91裸聊视频檚 a whole bunch of additional hoops and question marks still before this thing is settled,91裸聊视频� Kelly said, noting the upcoming election and the need for legislation to be passed in Parliament. 91裸聊视频淲e91裸聊视频檝e got enough political uncertainty, economic uncertainty, we sure don91裸聊视频檛 need to have tax uncertainty on top of that.91裸聊视频�