Helping to offset the federal tax many Canadians pay on carbon-based fuels like gasoline and natural gas, the next carbon tax rebate — known officially as the Climate Action Incentive Payment (CAIP) — will land in many taxpayers’ bank accounts in January 2024.
While many Canadians are eligible to receive the quarterly CAIP, the amount you may receive depends on factors like your province of residence and the number of people in your family.
1. What is the carbon tax rebate?
The CAIP is tax-free money paid out by the federal government to residents of certain provinces to offset the cost of federal pollution pricing charged on fossil fuels like natural gas and gasoline.
Under Canada’s carbon pollution pricing system, all money collected is returned to families, businesses, farmers and Indigenous groups.
How CAIP works in Alberta, Manitoba, Ontario and Saskatchewan
Before 2022, this payment was available as a refundable tax credit individuals could claim on their tax returns. Starting in July 2022, the rebate changed from a tax credit to an automatic payment sent on a quarterly basis to qualified residents of Alberta, Manitoba, Ontario and Saskatchewan — provinces where federal pollution pricing applies.
How CAIP works in Newfoundland and Labrador, Nova Scotia, and PEI
In 2023, the federal fuel charge came into effect in Newfoundland and Labrador, Nova Scotia, and Prince Edward Island. Residents of these provinces received quarterly payments in July 2023 and October 2023, with an additional payment scheduled for January 2024 and four payments in subsequent fiscal years.
How CAIP works in New Brunswick
Individuals who live in New Brunswick received a double payment in October 2023, meant to cover July and October, and single, quarterly payments after that.
How CAIP works in British Columbia, Quebec, Nunavut, Yukon and the Northwest Territories
Residents of British Columbia, Quebec, Yukon, Nunavut and the Northwest Territories are not eligible to receive the federal CAIP because those provinces and territories don’t participate in the federal carbon pollution pricing system.
British Columbia is a bit unique in that it charges its own carbon tax and administers its own quarterly carbon tax credit. If you live in BC, you do not need to apply for the provincial carbon tax credit: your eligibility will automatically be considered by the CRA when you file a tax return. Visit BC’s governmental website to learn more about eligibility criteria and annual benefits amounts.
The government of the Northwest Territories provides a cost of living offset payment to help residents with the cost of the territorial carbon tax.
Meanwhile, Quebec uses a cap-and-trade system and reinvests any revenue in the province’s fight against climate change.
2. Who is eligible to receive the CAIP?
To be eligible for the CAIP, you need to be a Canadian resident for tax purposes at the start of the month in which the payment will be issued (e.g., on April 1 for an April payment). You must be a resident of a province that issues the CAIP. You also need to be 19. Individuals under 19 can qualify if they have — or previously had — a spouse or common-law partner, or if they are a parent who lives, or used to live, with their child.
Under the CAIP, a single adult (or the first adult in a couple) receives a certain amount based on their province of residence, with a spouse or common-law partner and each child under 19 receiving additional amounts, as long as the children have been registered under the Canada Child Benefit plan. In families where children live with a parent part-time, the parent can still receive 50% of the CAIP payment.
How to get your carbon tax rebate
Unless you’re a newcomer to Canada, you do not need to apply for the CAIP — as long as you file a federal tax return, the CRA will automatically determine your eligibility to receive the payment and the amount you will receive.
3. How much is the carbon tax rebate?
The CAIP varies by province and family situation and is not dependent on household income. Only one spouse or common-law partner can receive the payment on behalf of a family — the one who files their tax return first.
Here’s how much you might expect to receive each quarter of the 2023-2024 fiscal year, if you’re eligible, according to the Federal Minister of Finance (scroll to the right to see all provinces).
|Second adult (spouse/common-law partner, etc)
|Each child under 19
CAIP payment dates and amounts
Because of the date the federal fuel charge came into effect in their provinces, Newfoundland, Nova Scotia and PEI started receiving their quarterly payments in July 2023.
New Brunswick residents received theirs starting in October 2023, with a double payment covering July to December 2023. The January 2024 payment to New Brunswick residents will be the regular amount shown in the table above.
Individuals who live in rural or small communities are eligible to receive an additional 10% in their CAIP. In April 2024, this is set to increase to 20%. PEI’s amount automatically contains the 10% rural supplement, as the government considers all residents to be eligible.
4. When is the next carbon tax rebate payment?
If you’re eligible to receive the CAIP, your payments will be deposited directly into your bank account on the 15th of April, July, October and January of each calendar year.
If you’re not registered for direct deposit with the CRA, you may receive the CAIP by mail, and it could take longer.
5. Why didn’t I get my carbon tax rebate?
If you haven’t received the CAIP, it may be a matter of eligibility — for example, perhaps you don’t live in a province that issues the payment, or you are under the age of 19.
Otherwise, it may be an issue with your tax return. To be eligible to receive the CAIP, you have to have filed your tax and benefit return for the previous tax year. If you are a new resident of Canada, you need to fill out an application to receive the CAIP.
If you have filed your tax return but still haven’t received your CAIP, or the amount is incorrect, it may be related to missing information on your return.
For example, to receive the rural supplement, you have to have completed a question on page two of your tax return. Also, ensure your banking details (or mailing address, if you receive paper cheques) are up to date with the CRA.
It’s also important to note that if you have income tax balances owing with the CRA or amounts owing to any other federal or provincial government programs, the government will apply the CAIP to those debts.
DIVE EVEN DEEPER
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