The federal government has issued draft legislation ensuring all Canada Carbon Rebates for small businesses are given tax-free, meeting a promise previously given by the former finance minister.
Finance Minister François-Philippe Champagne introduced draft legislation on June 30 that would ensure payments received by corporations related to the fuel charge from 2019 to 2023 would not be included in income for tax purposes.
Additionally, the final payment to be made under the Canada Carbon Rebate for Small Businesses will be tax free. The Liberal government will introduce legislation to make these changes when the House of Commons resumes in the fall.
However, the government said that with the federal fuel charge being removed and the winding down of mechanisms providing tax returns for the charge, it will no longer be able to broaden eligibility for the rebate to include cooperative corporations and credit unions, add a minimum payment for smaller businesses, or introduce a phaseout for larger businesses. These changes were announced in the 2024 Fall Economic Statement….