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Economy

Many Saskatchewan small businesses plan to absorb carbon tax costs

WATCH ABOVE: Four out of five small businesses CFIB surveyed said they would be able to pass on less than a quarter of the new costs to consumers.

Small business owners are looking for answers on how they will be compensated when the federal carbon tax takes effect next Monday, the Canadian Federation of Independent Business (CFIB) said.

“We know right down to the cent what households are getting, but business owners again, are left with a lot of unanswered questions,” said Marilyn Braun-Pollon, CFIB’s prairie and agri-business vice-president.

READ MORE: Federal carbon tax to appear on SaskPower, SaskEnergy bills starting April 1

The federal government said it will make $155 million available in 2019-20 for small businesses, and $1.5 billion over the next five years. CFIB said the fund lacks details as to how small businesses can apply and what kinds of projects will qualify.

Small businesses, municipalities, universities, school boards and hospitals, will contribute almost 50 per cent of the carbon tax revenues and get seven per cent back in the form of grants and rebates, according to CFIB.

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“On the flip side, households will be paying 50 per cent to the carbon tax revenue, but getting 90 per cent back. Someone has to pay for this,” Braun-Pollon said.

Travis Swatschina opened his print shop in Saskatoon nearly two years ago and he expects his business costs to increase when the carbon tax kicks in.

“It seems like the deck is stacked against small business as it is,” The Print Baron co-owner Swatschina said.

“The bigger guys with established customer bases, it’s going to be a lot easier for them to let their clients know everything will cost a little more because of the carbon tax,” Swatschina said.

Swatschina said the increase in costs, such as supplies, power and energy bills, will be difficult to pass on to the customer.

“In order to be competitive and try and incentivize someone to choose us, over one of the other bigger guys in town here, it’s going to be a lot harder for us to increase our costs in order to do that. I would imagine we’ll probably have to eat most of it.”

“Over half of small businesses say that they won’t be able to push any additional costs forward to the consumer. That means the business needs to absorb those costs themselves,” Darla Lindbjerg, Greater Saskatoon Chamber of Commerce CEO, said.

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“That could be lack of investment in their business, where they might have had extra dollars to invest to grow and expand their business.”

Small business also may not be able to increase wages or have to cut jobs to fill the gap, according to Lindbjerg.

READ MORE: Carbon tax to kick in next week — but details for small businesses not yet finalized

Four out of five businesses CFIB surveyed said they would be able to pass on less than a quarter of the new costs to consumers.

The federal carbon pricing backstop starts April 1 in Saskatchewan, Manitoba, Ontario and New Brunswick, because the provinces didn’t have their own carbon pricing system.

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