The July 15 tax filing deadline is fast approaching for small businesses across Canada that may be eligible for the federal carbon tax rebate announced in April’s federal budget.
According to the Canada Revenue Agency, an estimated 600,000 Canadian controlled private corporations (CCPCs), including incorporated farms, could be eligible to receive more than $2.5 billion in retroactive carbon tax payments for the fuel tax years 2019-2020 to 2023-2024.
To qualify for a fuel tax refund for a given tax year, a company must meet the following criteria:
– Employ one or more employees in a specified state during the calendar year in which the fuel tax year begins.
– Have 499 or fewer employees across Canada during that calendar year.
– Have filed their corporate income tax return for the tax year ending in 2023 by July 15, 2024.
The CRA, now led by former Agriculture Minister Marie-Claude Bibeau, says it’s too early to say when the refunds will be paid. The federal finance minister must also specify the rates to be paid by each province for each fuel tax year.
The retroactive discount only applies to provinces and years in which the federal carbon price backstop was in effect.
Businesses do not need to apply for a refund as it will be calculated automatically based on tax returns.
After the federal budget was released in April, the Canadian Ministry of Finance told RealAgriculture that the new small business discounts would not affect farms that qualify for the existing fuel tax credit for farmers that was implemented after the 2021 federal budget.
Related: Corporate farms are included in new small business carbon tax rebate
