Hundreds of thousands of Canadian small- and medium-sized businesses will receive carbon rebates by December.
The federal government said Tuesday that it will send more than $2.5 billion to about 600,000 businesses.
The is a refundable tax credit that returns a portion of the carbon price revenue to eligible companies in jurisdictions where the federal fuel charge applies for the 2019-20 to 2023-24 fuel charge years, according to the Canada Revenue Agency (CRA) on its website. A fuel charge year runs from April 1 to March 31.
The finance minister will indicate the payment rates for each designated province for a calendar year.
Who is eligible?
The designated provinces considered eligible for the payments in certain years are shown in this on the Canada Revenue Agency's website.
A business in a non-designated province or territory will still be eligible for the rebate if it meets the government's eligibility requirements and had at least one employee in a designated province in the calendar year in which the fuel charge year began, according to the CRA.
Canadian-controlled private corporations have to meet certain criteria to be eligible for the retroactive payment, which was announced in the 2024 federal budget.
A business must have employed at least one worker in a designated province in the calendar year in which the fuel charge year began, according to the CRA.
It must not have employed more than 499 workers in Canada in the calendar year and it must have filed a tax return for its tax year ending in 2023 by July 15, 2024.
How will the rebate be calculated?
To calculate the total rebate, the number of employees the business had from 2019 to 2023 is multiplied by a payment rate for each of those provinces and years, according to the government.
The government says it won't be able to provide estimated rebate amounts until the payment rates are set and it won't be able to share the exact distribution date yet. It said it will provide updates on the timelines in the coming months.
How to apply
Businesses don't have to apply for the carbon rebate, as the government will calculate it and automatically issue the amounts to those who are eligible.
The CRA advises business owners to enrol in in order to receive payments quickly and securely.
Canada Carbon Rebate for individuals
Wondering about the Canada Carbon Rebate for individuals? Here's where to find that information on the Canada Revenue Agency's .
With files from The Canadian Press
