Govt announces significant new support to help small business owners

Ottawa – Canada’s small- and medium-sized businesses keep main streets flourishing across the country, create good-paying jobs, and deliver the dream of entrepreneurship. It is essential that these businesses thrive so they can continue being the bedrock of our communities and our economy.

Chrystia Freeland, Deputy Prime Minister and Minister of Finance, alongside Rechie Valdez, Minister of Small Business, and Jean-Yves Duclos, Minister of Public Services and Procurement, announced a comprehensive suite of measures to help small- and medium-sized businesses start up, grow, and thrive.

First, the federal government announced the payment amounts for the new Canada Carbon Rebate for Small Businesses, which will deliver over $2.5 billion to about 600,000 Canadian businesses before the end of this year. This refundable tax credit will return a portion of the fuel charge proceeds from 2019-20 through 2023-24 to small businesses, in jurisdictions where the federal fuel charge applies. Eligible businesses that filed their 2023 tax return by July 15, 2024, will receive their payment by:

• December 16, 2024, if registered for direct deposit from the Canada Revenue Agency; or,
• December 31, 2024, if receiving payment by cheque.

To ensure all eligible businesses can receive their payments, the government is proposing to extend the deadline for businesses that file their tax return from July 15, 2024, to December 31, 2024. Late filers would receive their payment at a later date, subject to Royal Assent of the required legislation.

The Canada Carbon Rebate for Small Businesses will deliver up to $4,010 to a business with 10 employees in Ontario, $29,550 to a business with 50 employees in Alberta, and $576,844 to a business with 499 employees in Saskatchewan. Small businesses in Manitoba, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador will also receive payments.

Second, the federal government announced a revised Code of Conduct for the Payment Card Industry in Canada to protect over 1 million businesses that accept credit card and debit card payments from customers. Starting on October 30, 2024, the revised Code will help businesses compare prices and offers from different payment processors, and shorten the complaint handling response time by nearly 80 per cent to just 20 business days. All major payment card network operators in Canada have agreed to the terms of the revised Code. Certain obligations requiring complex or technical system changes will come into effect by April 30, 2025.

Third, the federal government announced that new, reduced credit card transaction fees for small businesses will take effect on October 19, 2024. More than 90 per cent of small- and medium-sized businesses that accept credit cards will receive lower rates and see interchange fees reduced by up to 27 per cent. These fee reductions are expected to save eligible small businesses about $1 billion over five years. The federal government expects all members of the credit card industry, including payment processors, to pass these savings on directly to small businesses. The federal government negotiated and finalized new agreements with Visa and Mastercard, which also protect reward points offered to Canadian consumers.

Reduced credit card transaction fees will save small businesses thousands of dollars every year. For example, if a store processes $300,000 in credit card payments, they currently pay nearly $4,000 in annual fees. With these new agreements, the store could save $1,080 in fees every year.

The government is taking action to help businesses start-up, grow, and thrive by reducing the costs of running a business. Today’s new supports for business owners build on the tax cut for small businesses announced in Budget 2022, which is saving businesses $660 million in taxes over 2022-23 to 2026-27, by making the 9 per cent federal small business tax rate available to more businesses as they grow.