Smaller companies fear they’ll be unable to pass on carbon tax costs: poll

Ottawa says 90 per cent of the carbon-tax revenues it collects will be returned via rebates to households in each of the four provinces. Consumers will get by far the largest share because the government expects them to ultimately pay most of the new costs passed down from businesses.

But the findings of CFIB’s poll, conducted in November, suggest there’s concern most smaller companies will be unable to pass along their new costs — meaning these firms will end up subsidizing the rebate program for households, the report said.

About 80 per cent of the respondents said they didn’t think it would be easy for them to forward costs on to their customers. The poll found 55 per cent of those surveyed didn’t expect to pass on any of the additional costs, while 25 per cent said they would only be able to pass on less than 25 per cent of the extra costs.

“These findings should be deeply worrisome to public policy makers,” said the report, which also repeats CFIB’s concerns the carbon tax will arrive the same year that businesses’ Canada Pension Plan premiums start to rise.

“It means small firms will be forced to find the resources to pay the tax from the business itself, which means it may come at the expense of wages, jobs or future business growth.”

The Liberals’ carbon tax has generated intense political debate across the country and it’s destined to be a key campaign issue in October’s federal election.

The Liberal government has argued pollution is already getting expensive for Canadians as costs from climate-change-related weather events have climbed to more than $1 billion a year. The Liberals believe carbon pricing, which has been in place for years in provinces like British Columbia, Quebec and Ontario, is one of the best ways to lower emissions.

The federal climate change action plan also includes efforts to develop clean fuel standards, create new energy-efficiency building codes and phase out electricity generation from coal.

The opposition Conservatives have repeatedly called the Liberal plan a “tax grab” that will hurt the bottom lines of small businesses and families, kill jobs and make the country less competitive. Moving forward, the Tories warn carbon-tax bills will only get bigger.

Several provincial leaders have also become vocal opponents of the federal program.

The regime will be applied to Saskatchewan, Manitoba, Ontario and New Brunswick because they don’t have their own carbon-pricing system.

Ottawa has said the remaining 10 per cent revenue share from the carbon tax will be dedicated to a program to help organizations, such as schools, that are unable to pass on the costs via higher prices. Part of this portion — worth about $1.5 billion — will also be used to help small- and medium-sized businesses adapt to carbon pricing over the next five years, the government has said.

Ottawa has yet to lay out the specifics of this element of its plan.

“We are still working with small businesses on how revenue from carbon pollution pricing will be returned to support Canadian businesses to reduce their emissions and their costs, and become more energy efficient and competitive,” Sabrina Kim, a spokeswoman for Environment Minister Catherine McKenna, wrote in an email.

The report noted that some big industrial emitters will pay through a separate system that provides some relief to sectors heavily exposed to foreign competition. Smaller businesses, it added, have not been provided the same relief.

CFIB is calling on Ottawa to limit the impact on smaller businesses, including reassurance the same proportion of revenue collected from these firms is returned to them.

— Follow @AndyBlatchford on Twitter

Andy Blatchford, The Canadian Press

by Canadian Press

Smaller companies fear they’ll be unable to pass on carbon tax costs: poll

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