Carbon Tax Rebate to be Disbursed to Qualifying Canadian Private Corporations in December

October 10, 2024

Details regarding the carbon rebate for small businesses have been released, and the refund could be substantial for companies with a meaningful number of employees. The maximum refund for an Ontario Corporation is $401 per employee. Even if your corporation is in a loss position, it is important to file a corporate tax return for 2023 this calendar year in order to assure eligibility.

As long as you have filed your 2023 corporate tax return, the rebate will be issued automatically with no application required.  In order to qualify, your business must:

-       Be a Canadian Controlled Private Corporation (“CCPC”) throughout the tax year and employ a maximum of 499 employees across Canada. Partnerships and sole proprietorships do not qualify.

-       The corporate income tax return for the 2023 tax year must have been filed by December 31, 2024, for the business to be eligible for retroactive payments

If you filed your 2023 return before July 15, 2024, you should expect to receive your refund in December 2024.

The rebates from 2019-2024 are being reimbursed all at once, with the amount per employee varying depending on the year and province you are located. In Ontario, the rebate number grows from $26 per employee in 2019-20 to $146 per employee in 2023-24, increasing each year incrementally and totalling a value of $401 for an employee working all five years.

To illustrate a couple of examples for a company based in Ontario:

(a)   a manufacturing plant with 80 employees employed through 2019 to 2024 will be eligible for a $32,080 rebate.

(b)  A small marketing services company with 8 employees, employed from 2019 to 2024, will be eligible for $3,208.

This link provides further context as to how the rebate is calculated - it is based on the number of T4s multiplied by the government rate.

If you have any questions, please reach out.