Coming tax hikes no laughing matter for small businesses

All governments must act on burden of higher costs, Andrew Sennyah writes.

Alberta's history with the carbon tax is a complicated one. In 2017, the Alberta NDP introduced a consumer carbon tax that was set at $20 per tonne of CO2, increasing to

$30 per tonne a year later — higher than the federal government mandate at the time.

However, in 2019, the United Conservative government under the leadership of Jason Kenney eliminated the provincial consumer carbon tax. In response, the federal government imposed the federal backstop program on Alberta in 2020 at $30 per tonne.

As part of the federal carbon pricing scheme, the federal government made a promise to return nine per cent of carbon tax revenues to small- and medium-sized enterprises (SMES). However, so far this has just been another broken promise.

To date, less than one per cent of revenues have been returned, with Alberta SMES owed a whopping $718 million according to the federal government's own data. This equates to $4,095 per business in the province, money that could go to paying down debt or investing in their employees.

It's no wonder that Alberta small business opposition to the tax has risen from 74 per cent in the fall of 2022 to 94 per cent in the fall of 2023, according to CFIB'S survey data. To add salt to the small business wound, the federal government announced plans to slash the share of carbon tax revenues allocated to SMES from nine per cent to five per cent, depriving businesses of an estimated $3.4 billion over the next five years before they've returned a penny of what they owe to Alberta businesses.

One of the questions the federal government has yet to answer is which businesses will ultimately get the $2.5 billion they owe?

The only indication that the federal government has given is that the money will eventually be returned to SMES in “emissions intensive, trade exposed sectors” —

Everyone pays the carbon tax; why shouldn't everyone receive a rebate?

which is also cause for concern.

It's CFIB'S position that the federal government scrap the idea of returning the SME allocation to only a small handful of businesses in favour of a simple rebate for all SMES. After all, everyone pays the carbon tax; why shouldn't everyone receive a rebate?

On April Fools' Day, the carbon tax is set to rise to $80 per tonne. Translating to almost 18 cents per litre of gas or roughly $9 on a

$50 fill-up at the pump.

It's no laughing matter for families and small business owners struggling to cope with rising costs.

For 74 per cent of Alberta small businesses, fuel costs have been cited as the highest input cost constraint. While the Alberta government has been strong in its resolve to fight carbon tax increases, they are reinstating the full collection of the provincial fuel tax, raising the cost of gas by a further four cents per litre.

To quote the provincial finance minister's budget address, it “... provides a helping hand for those in need, especially in these days when affordability is top-of-mind.” Albertans and small businesses certainly did not have a fuel tax increase in mind when the Minister was speaking about affordability.

As the carbon-tax battle wages on across the country, all governments must look introspectively as to how they can address the rising cost of living for all Canadians but also the rising costs of doing businesses for those who have invested not only their money but toil, tears, and sweat for their communities.

With this in mind, small businesses are calling on the federal government to stop the carbon tax increase and return the

$718 million to Alberta small businesses, and for the provincial government to rethink their own increase in the gas tax.