Small business opposition to federal carbon tax grows significantly

Business pays 40% of the costs of the carbon tax, but most small firms will receive zero in rebates

Toronto, November 8, 2023 – A strong majority of businesses (85%) now oppose the federal carbon tax (the fuel charge) and want it to be scrapped, according to new data from the Canadian Federation of Independent Business (CFIB). The recent announcement by the federal government that it will exempt only one type of heating fuel—heating oil—from the carbon tax is just the latest example of how unfair the tax has been to small businesses. Opposition to the carbon tax among small firms is up from an earlier reading of 52% taken only one year ago.

“Small businesses have been raising their concerns with the carbon tax for years. They pay about 40% of the costs of the carbon tax, but the federal government has promised to return only 10% to small businesses,” said Dan Kelly, CFIB President. “Making matters worse, it appears most small firms will be ineligible for the Federal Fuel Charge Proceeds Return Program, if the federal government ever gets around to creating the program that was promised to deliver $2.5 billion collected since 2019 to small businesses and Indigenous groups.” 

“Now the government is choosing to help some Canadians with their heating costs by exempting them from the carbon tax, while leaving the majority out. CFIB is concerned that the recently announced enhancement to the rural top-up to Climate Action Incentive payments will be funded by reducing the small sliver of carbon tax revenue that is current earmarked to be returned to small business. The entire federal carbon tax structure is beginning to look like a shell game,” Kelly added.

“With rising costs on everything from supplies to fuel to taxes and the Canada Emergency Business Account (CEBA) loan repayment deadline fast approaching, small businesses are in a precarious financial position. The government could alleviate some of the pressure by releasing the carbon tax revenues it has already collected from businesses and committing to several important changes,” Kelly added.

CFIB is asking the federal government to overhaul the carbon tax system by:

  • Expanding the carbon tax exemption to all forms of heating fuels, including natural gas and other sources used by small business.
  • Halting future carbon tax increases, including the hike planned on April 1, 2024.
  • Immediately returning all promised funds to all small businesses that paid into the tax.
  • Ensuring businesses are eligible for rebates or refunds equivalent to the full share of the fuel charge costs they incur (CFIB estimates 40%).
  • Supporting the passing of Bill C-234 at third reading in the Senate rapidly without any amendments.

“Small businesses have been waiting for a meaningful effort from government to return the carbon tax revenues it promised them since the tax was introduced. They have seen consumers and big businesses benefit from rebates and grants, while they were left in the cold,” Kelly concluded. “If the government can’t fix the carbon backstop system now, it’s time to scrap it and look for other ways to address climate change.”

For media enquiries or interviews, please contact:
Dariya Baiguzhiyeva, CFIB
[email protected] 

Final results for the Flash Survey on Carbon Pricing. The online survey was conducted from September 14-27, 2023, number of respondents= 2,911. For comparison purposes, a probability sample with the same number of respondents would have a margin of error of at most +/-1.8 %, 19 times out of 20. Businesses in all provinces/territories were asked whether or not they support the current federal carbon pricing system. Only businesses in provinces/territories subject to the federal backstop were asked whether the federal carbon tax should be eliminated. 

About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 97,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at

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