Mr. Speaker, climate action is critical to Canada’s long-term health and economic prosperity. Carbon pricing is widely recognized as the most efficient means of reducing our greenhouse gas emissions, which is why the Government of Canada continues to make sure that it is not free to pollute in Canada.
The federal price on pollution is revenue-neutral for the federal government; the direct proceeds from the federal carbon pricing system remain in the province or territory where they are collected. Put simply, every dollar collected from the carbon price is returned.
As of the 2024 25 fiscal year, i.e., starting on April 1, 2024, in provinces where the federal fuel charge applies, 93% of direct fuel charge proceeds are returned to residents of these provinces through the quarterly Canada carbon rebate. Eight in 10 households receive more in rebate payments than the costs they face from the federal pollution pricing system. Those living in a rural or small community are eligible for a supplement in addition to the base Canada carbon rebate amount, except in Prince Edward Island, where all residents receive the same amount since there is no census metropolitan area. In recognition of rural Canadians’ higher energy needs and more limited access to cleaner transportation options, the government is proposing, through legislative amendments in Bill C 59, to double the rural supplement from 10% to 20% of the base rebate amount, starting in April 2024.
Also beginning in 2024-25, the proceeds allocated to indigenous governments will double from 1% to 2%, in recognition of the disproportionate impacts of climate change on indigenous communities.
As proposed in budget 2024, the share of proceeds allocated to small and medium sized businesses, SMEs, will be returned to them through the new Canada carbon rebate for small businesses. For 2019 20 to 2023 24, over $2.5 billion in proceeds from the price on pollution will be urgently returned to an estimated 600,000 small and medium sized businesses via an accelerated and automated return process. For 2024 25, $623 million in proceeds would be returned to eligible businesses. For this year and future years, the Canada carbon rebate will be assessed and delivered automatically when SMEs file their tax returns.
Moreover, the government continues to support small and medium sized businesses with initiatives that help them transform their businesses, save energy, and continue to be competitive. The government has supported small businesses through several initiatives, including by decreasing the small business tax rate; lowering credit card transaction fees; enhancing the Canada small business financing program; and twice extending the partial loan forgiveness of the Canada emergency business account, CEBA, program. CEBA delivered over $49 billion to help keep nearly 900,000 small businesses and non profits afloat during the pandemic.