Deputy Prime Minister and Finance Minister Chrystia Freeland says the Canada carbon rebate for small businesses will be tax-free.

In a statement posted to X late Tuesday, Freeland clarified the parameters of the program after an advocacy group for small business raised concerns that the rebate would be a taxable benefit.

Dan Kelly, president and CEO of the Canadian Federation of Independent Business, posted on X soon after that post that he had received a call from Freeland, who offered 鈥渁ssurance鈥� that the rebate would be tax-free.

In a letter to Freeland Nov. 6, the CFIB said it had initially been told by the Canada Revenue Agency the rebate would be tax-free, but was subsequently told by the Finance Department that the rebate was actually taxable.

The Canadian Press contacted both the CRA and Freeland鈥檚 office for clarity and comment Monday and Tuesday. The CRA said it would have information available mid-week.

Freeland鈥檚 office did not respond to requests Monday or Tuesday until a spokesperson sent a link to the minister鈥檚 social media post just after it was posted Tuesday night.

In his letter to Freeland last week, Kelly said the rebate is for taxes paid by small firms, not a 鈥済ift鈥� to small firms from general revenue.

鈥淭his would be akin to levying income taxes on one鈥檚 income tax return,鈥� he said.

Kelly also said 83 per cent of the group鈥檚 97,000 members want the carbon price to be repealed.

The Canada carbon rebate for small businesses was a measure introduced in this year鈥檚 federal budget, in which $2.5 billion of carbon price revenue would be paid back to some 600,000 small and medium-sized businesses.

In his letter, Kelly commended Freeland and thanked her for her work in getting the rebate done.

鈥淲hile this will likely not change the fact that 鈥� our members now oppose the carbon tax, the rebate will help government meet its long-outstanding promise to small firms and restore some degree of revenue neutrality,鈥� Kelly wrote.