Carbon-tax backstop leaves small businesses at pointy end of pricing-adjustment stick: CFIB

Considering that SMEs will be paying almost half of total fuel levies (their share expected to be roughly $2.5 billion annually by 2023), the $385 million to be sent back to them in a yet-to-be-specified way barely moves the needle, CFIB says.

“We are all in this together” is one of the main talking points governments use in crafting policy responses to fears about global warming. It’s especially so for Canadian governments because there is not much a small country can do that would have measurable effects on the world’s atmosphere. Canadian carbon policy is only meaningful if each country is doing its part.

There are many approaches to reducing the use of carbon fuels — a major contributor to GHGs — ranging from regulatory limits, bans and incentives to re-pricing mechanisms, and in true Canadian fashion our governments are using them all. The approach is anything but consistent nationally, but at least the provincial approaches have been relatively even-handed in how they balance costs and incentives. The federal carbon backstop plan, however, soon to appear in Ontario, Saskatchewan, Manitoba and New Brunswick, is anything but.

The federal government has promised revenue neutrality in its plan, but only in how it applies to itself. Varying segments of the economy will see very different net results. The feds tell us that households will be net beneficiaries on average because the incentives they get back each year at tax time will exceed the extra fuel charges they begin paying in April. Large businesses will pay a little more under a complex, separately administered output-based pricing system (OBPS), but only after receiving exemptions on about 80 per cent on the fuels they currently use.

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