The Canadian Government recently announced a significant initiative to support over 600,000 small businesses. This plan includes two major components; the Canada Carbon Rebate for Small Businesses, returning over $2.5 billion in tax credits to businesses impacted by fuel costs, and reduced credit card fees to lower operational expenses starting October 19, 2024.
This strategy is primarily designed to offer financial relief and regulatory changes. Speaking on the impact, Deputy Prime Minister Chrystia Freeland stated, “We are making sure that small businesses have the support they need to manage rising costs.”
Minister of Small Business Rechie Valdez emphasized the government's commitment to “reduce the barriers small businesses face,” while Minister of Public Services and Procurement Jean-Yves Duclos highlighted the importance of “fairer, transparent payment systems.”
For small business owners in Canada, this initiative provides direct financial support and regulatory adjustments that could positively impact cash flow and reduce the cost of doing business. The rebate will help businesses struggling with high energy costs, while the reduced credit card fees and revised payment industry regulations should lower transaction costs, benefiting retail and service-based sectors in particular.
Key Highlights:
Canada Carbon Rebate for Small Businesses:
The government has introduced a refundable tax credit that will return over $2.5 billion to small businesses to help them offset the rising fuel costs associated with the federal fuel charge, which has been in place since 2019.
Eligible businesses that filed their tax returns by July 15, 2024, will receive their payments by either:
December 16, 2024 (for those registered for direct deposit), or
December 31, 2024 (for cheque recipients).
Furthermore, the government has proposed an extension of the tax return filing deadline to December 31, 2024, for businesses that missed the initial July deadline. This would ensure that even late filers can benefit from the rebate. This proposal is pending approval, but if implemented, it will offer an extended opportunity for businesses to claim the rebate.
2. Lower Credit Card Fees:
Beginning October 19, 2024, the government will introduce reduced credit card transaction fees, which are expected to alleviate financial pressure for small businesses, particularly those that rely heavily on credit card payments, such as retail and service-based industries.
In conjunction with these changes, a revised Code of Conduct for the Payment Card Industry in Canada will take effect on October 30, 2024. The updated code is intended to promote greater transparency and fairness in payment processing, further helping businesses save on operational costs and ensure that payment practices are more equitable and clearer.
How Can Small Businesses Benefit?
If you are a small business owner, here are steps you must take to enable you to benefit from this support:
Ensure you file your tax returns by the extended December 31, 2024 deadline to qualify for the Canada Carbon Rebate.
Review your credit card processing arrangements and be aware of the new reduced fees starting in October.
Stay updated on the revised Code of Conduct, which introduces new standards for how credit card payment systems operate in Canada, providing more protection and clarity for business owners.
These measures align with Canada's broader goal of supporting small businesses, a critical pillar of the Canadian economy. If you are planning to migrate and start businesses in Canada, this is an encouraging sign of the government's commitment to fostering a business-friendly environment.
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Source: Government of Canada
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