Canadian carbon tax increase set to begin on April 1, 2022.
By Brenden Mercer, Farms.com
With Canada’s carbon tax set to increase on April 1, 2022, the Canadian Federation of Independent Business (CFIB) is urging the federal government to freeze the carbon tax.
The tax, according to the CFIB, could exacerbate the situation at a time when many small businesses are unable to absorb additional cost increases.
In 2020, the CFIB’s farm members estimated they were paying almost $14,000 in federal carbon taxes when the carbon tax was set at $20 per tonne of CO2.
When one factors in standard inflationary costs for food, the tripling of fertilizer costs, and the meteoric rise in fuel for vehicles and heating, the CFIB feels that the Canadian farmer is reaching a breaking point.
Nearly two-thirds—62 percent—of Canadian businesses noted in a recent CFIB survey that rising prices on such things as fuel, food, or insurance were having and going to have a huge impact on their bottom line. An additional 27 percent indicated that the financial toll was moderate.
“Despite the rapidly rising cost of fuel, and that only a third of small businesses have regained their pre-pandemic sales levels, the federal government seems determined to move forward with increasing the federal carbon tax,” said Corinne Pohlmann, Senior Vice-President of National Affairs at CFIB. “Small businesses need a chance to regain their breath and pay down their debt. This is not the time to be adding any new costs to struggling small businesses.”
Along with urging the federal government to freeze the carbon taxes increase, the CFIB wants the government to provide a solution on ways to reduce energy costs for small business owners.
The CFIB suggests:
- Halting all current and future tax increases, including the alcohol excise tax, Canada Pension Plan (CPP) and Employment Insurance (EI) premiums;
- Extending the Canada Recovery Hiring Program for six months (until September 2022) and expanding eligibility to new businesses;
- Accelerating plans to reduce credit card processing fees for small businesses.
“Small businesses may be on their way out of the pandemic, but it will be a slow and difficult climb,” summed up Pohlmann. “The federal government has the opportunity to show them that it’s listening to them and cares about their recovery by freezing the carbon tax instead of increasing it.”
Virginia Labbie, Senior Policy Analyst for Agri-business, CFIB, who recently spoke on agri-retail businesses and farms at the 2022 CAAR (Canadian Association of Agri-Retailers) Conference, also talked with Farms.com.
She agreed that “Farmers can not take on more costs.”
Labbie continued: “(A recent CFIB survey indicated that) 77 percent of agri-businesses say that rising prices of seed, and fertilizer are taking a large chunk of their money” and that there is “no end in sight.”
She said that the Canadian government must provide relief to its ag industry.
“Freeze the carbon tax and halt any current or future deductions such as EI and CPP payments,” Labbie stated, and take a “longer-term look at reducing the burden of carbon tax on farmers.”
Labbie also mentioned Bill C-206, An Act to amend the Greenhouse Gas Pollution Pricing Act (qualifying farming fuel), that died before receiving Royal Assent when the 2021 federal election was called.
She pointed out that the Parliamentary Budget Officer had estimated that Bill C-206 would have saved Canadian farmers $1.1 billion over 10 years if it had passed—monies that could have been utilized by farmers to reinvest in their business, continue to invest in technology, and contribute to their local community.
However, MP Ben Lobb of Huron-Bruce has introduced a new Private Members’: Bill C-234, An Act to amend the Greenhouse Gas Pollution Pricing Act.
Labbie noted that if passed, it would exempt natural gas and propane from the federal carbon tax used for on-farm grain drying, barn heating, irrigation, and steam flaking, and it is something the CFIB will be encouraging all MPs to support in the days ahead.
About CFIB
The CFIB is Canada’s largest association of small- and medium-sized businesses with 95,000 members across every industry and region. It 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 https://www.cfib-fcei.ca.