A Message from our friends at CFIB
Carbon tax rebates are coming!
I’m pleased to share that after months of relentless advocacy and over 8,500 signed petitions, the federal government has finally committed to urgently return the over $2.5 billion in carbon tax revenue owed to small businesses. Importantly, the government has also broadened its eligibility criteria to now include most small- and medium-sized firms with fewer than 500 employees, as rebates were previously promised to emission intensive, trade exposed businesses only.
While many details regarding the scope and timing of the rebates remain unclear, a formal commitment in this year’s federal budget is a crucial step in the right direction. Business owners must file their 2023 taxes by July 15th to be eligible for the rebate.
As always, we will continue to voice your concerns regarding the carbon tax to the government. Particularly, we want to ensure that sizable rebates are issued within the year.
A sincere thank you to all our members in the carbon backstop provinces who took the time to sign and share our petition. We could not have achieved this win without your support.
Capital gains changes a mixed bag for entrepreneurs
The biggest surprise in Tuesday’s budget was a series of changes to capital gains taxation, including an increase in the inclusion rate from 50% to 66.7%.
We are continuing to review the details, but our early assessment is that most small business owners will come out ahead or be unaffected by the changes due to a boost in the Lifetime Capital Gains Exemption from $1 million to $1.25 million. The government also announced a new Canadian Entrepreneurs’ Incentive, which will lower the capital gains inclusion rate for some sectors to 33.3% on the next
$2 million when fully phased in.
We're concerned that the hike in the inclusion rate will harm medium-sized firms and reduce the incentive to grow. In addition, many sectors are excluded from the new Canadian Entrepreneurs’ Incentive, including restaurants, hotels, arts and recreation firms, personal services businesses and professional corporations. For our part, CFIB will push back against any increase in capital gains taxes for all small- and medium-sized business owners, regardless of the sector.
You can check out our full budget reaction here and in the video, and keep an eye on our carbon tax hub page for more details in the coming few weeks.