The Small Business Carbon Rebate: When Is It Coming and How Much Will You Get? (2025 Update)

Executive Summary: The “Zero-Click” Answer

• When is the money coming? The final payment for the 2024-2025 year will be issued starting mid-December 2025 (typically between Dec 16–31).
• Is it taxable? No. The government has passed legislation confirming these rebates are 100% tax-free for corporations.
• Urgent Deadline: If you have not filed your 2023 Corporate Tax Return (T2), you have until December 31, 2024, to file and claim the retroactive payments for 2019–2023. Missing this date could cost you thousands in unclaimed refunds.

For nearly a year, Canadian small business owners have been hearing about the Canada Carbon Rebate for Small Businesses—a promise to return over $2.5 billion in fuel charge proceeds.

With the end of 2025 approaching, the wait is almost over. The final round of payments is scheduled for December, and for many businesses, this cheque will be substantial. However, there is significant confusion regarding eligibility dates, tax implications, and “retroactive” claims.

At BOMCAS Canada, our accounting team has broken down exactly what you need to know to ensure your corporation receives every dollar it is owed.

1. When Will I Receive the Cheque?

The Canada Revenue Agency (CRA) has confirmed that the final payment (covering the 2024–2025 fuel charge year) will be issued starting in December 2025.

• Direct Deposit: If your business is registered for direct deposit with the CRA, you should see the funds appear in your account between December 16 and December 31, 2025.
• Cheque by Mail: If you are not registered for direct deposit, allow an additional 2–4 weeks for mail delivery.

Important Note: This payment is automatic. You do not need to apply for it, provided you have filed your corporate tax return (T2) by the required deadlines (see Section 3).

2. How Much Will My Business Get? (2024-2025 Rates)

The rebate amount is calculated based on the number of persons you employed in specific provinces. The payment rates vary by province because they are based on the amount of fuel charge collected in that jurisdiction.

Here are the confirmed payment rates per employee for the final 2024–2025 payment:

Note: The maximum number of eligible employees is 499.

3. Urgent: The “Retroactive” Deadline (Dec 31, 2024)

This is the most critical section for business owners who may be behind on their paperwork.

There are two “pots” of money available:

1. The Retroactive Payment (2019–2023): This covers the past five years of fuel charges.
2. The Final Payment (2024–2025): This covers the current year.

To get the massive Retroactive Payment, you must have filed your 2023 Corporate Tax Return. If you missed the original July deadline, the government extended the eligibility window—but it is closing fast.

You must file your 2023 T2 Return by December 31, 2024, to be eligible for the retroactive rebate. If you have not filed your 2023 taxes, you are at risk of forfeiting five years’ worth of rebates. Contact BOMCAS Canada immediately if you need to file a late T2 return.

4. Is the Rebate Taxable?

There was initial confusion among accountants and business owners about whether this rebate would be treated as taxable income (like a government grant).

The Verdict: No. The Department of Finance has explicitly stated that the Canada Carbon Rebate for Small Businesses is tax-free.

• You do not need to include this rebate in your taxable income.
• It is a direct return of proceeds, not a grant.

5. Scam Alert: Protect Your Business

Whenever the government announces a large payout, scammers follow. Please be vigilant during December 2025.

The CRA will NEVER:

• Send you a text message with a link to “claim your rebate.”
• Ask you to click a link in an email to “accept your deposit.”
• Ask for your credit card number to “process the refund.”

How it actually works: The CRA will simply deposit the money into the bank account they already have on file for your corporation (the same one used for GST/HST refunds), or they will mail a physical cheque to your registered business address.

If you receive a suspicious text regarding the Carbon Rebate, do not click it.

6. Why Is This the “Final” Payment?

You may be wondering why the 2024-2025 payment is referred to as the “final” one.

The federal government has made changes to how the fuel charge proceeds are returned to small businesses. Moving forward, the focus is shifting away from this direct rebate model for SMEs as the fuel charge itself is removed or adjusted for certain business sectors. This December 2025 cheque represents the closure of the current rebate program structure.

Summary Checklist for Business Owners

1. Check your bank account in mid-to-late December for “Canada Carbon Rebate” or “EFT Credit Canada.”
2. Verify your T2 Filing Status: Did you file your 2023 return? If not, you have until December 31, 2024 to file and claim the retroactive 2019-2023 money.
3. Update your Direct Deposit: Ensure your business banking information is current in your CRA “My Business Account” to avoid mailing delays.

Need Help with Corporate Tax Filing?

If you are unsure if you qualify, or if you need to rush-file a 2023 Corporate Tax Return to meet the retroactive deadline, BOMCAS Canada is here to help.

We specialize in Corporate Tax (T2) preparation for small businesses in Edmonton, Sherwood Park, and across Canada.

Call us: 780-667-5250

Email: info@bomcas.ca

Visit us: www.bomcas.ca