Your Canada Carbon Tax Rebate Explained by Province

Below, we discuss how the carbon tax works in Canada and how much you can expect in carbon tax rebates. 

How does carbon tax work In Canada?

In the summer of 2018, Prime Minister Justin Trudeau’s government passed the Greenhouse Gas Pollution Pricing Act, dubbed the carbon tax, as part of a 2015 campaign pledge to put a price on pollution. The bill gave his government the authority to implement a carbon pricing system for provinces that do not have an adequate carbon pricing model of their own. The tax started at $20 per ton in 2019 and rose $10 per ton each year until reaching $50 per ton in 2022.

The goal, in part, is for Canada to meet its obligation to the Paris Agreement. That means cutting Canada’s carbon pollution by 40% below 2005 levels by 2030.

In December 2020, Trudeau announced a gradual hike in the federal carbon tax on fuels to $170 a tonne by 2030. He also announced a $15 billion investment over the next decade that will go towards building up Canada's electric vehicle charging infrastructure, buying incentives for zero-emission vehicles, and home retrofits.

The government of Canada calls the tax “revenue neutral” because all direct proceeds of the program go directly back to residents in the provinces where the federal system was forcefully adopted.

What is the Canada Carbon Rebate (Formerly known as the Climate Action Incentive Payment)?

For the provincial governments that refused to adopt the carbon tax, Trudeau wasn’t about to reward them with billions in new tax revenue. That’s why the feds created the Climate Action Incentive Payment (CAIP), now called the Canada Carbon rebate – to make sure taxpayers are on the receiving end of the carbon tax revenue – not uncooperative premiers. It also softens the blow for those cringing at increased power bills and pump prices.

Climate Action Incentive Payment (CAIP) & Canada’s Climate Action Incentive (CAI)

The Climate Action Incentive Payment (CAIP), also known as the Canada Carbon Rebate (CCR) or CAI, is a quarterly, tax-free payment designed to offset federal pollution pricing. If you're eligible, you'll receive quarterly payments in January, April, July, and October, either by direct deposit or cheque, depending on whether you’ve set up direct deposit on your personal income tax return. These quarterly payments represent 25% of the annual entitlement, and filing your tax return is essential—even if you have no income—to receive the CAI/CAIP entitlement.

Who gets the Canada Carbon Rebate?

Residents of Alberta, Manitoba, New Brunswick, Nefoundland and Labrador, Nova Scotia, Ontario, PEI, and Saskatchewan are currently eligible for the federal rebate. British Columbia, Northwest Territories, Nunavut, Yukon, and Quebec have their own provincial programs and rebates in place. The rebate payments are expected to increase over time and vary between provinces and household size.

CAIP Entitlement & Payment Amounts

Your CAIP entitlement is calculated based on your household composition: eligible individual, spouse or common law partner, and each qualified dependent (under 19 or shared custody). If you're a single parent, you'll receive a higher base amount. Additionally, residents of small and rural communities receive a supplement (initially 10%, increased to 20% in the 2024‑25 benefit year) on top of the base CAI amounts. For example, in 2024–25, a single adult in Ontario might receive around $560 annually, plus a rural supplement if eligible.

Carbon tax rebate by province or territory

Note that these amounts are expected to change each year. A rural supplement of 10% (soon to be 20%) is added for individuals living outside of metropolitan centres due to their greater dependency on fossil fuels. 

Schedule 14 & Rural Community Supplement

To claim the rural supplement, filers must complete Schedule 14 (“Climate Action Incentive”) on their income tax return and tick the box if they resided outside a Census Metropolitan Area on December 31. Schedule 14 is used to calculate both the base CAI amount and the small and rural community supplement, combining these to determine your total CAIP entitlement for that tax year.

British Columbia

The carbon tax has not been as controversial in BC because the province instituted its own tax way back in 2008. BC, a leader in fighting pollution through taxation, is not included in the Federal Canada Carbon Rebate, instead they have their own provincial program. 

A BC climate action tax credit (BCCATC) is available to residents through an income-based system, the maximum annual benefit is adjusted from year to year, increasing to a maximum $504 effective July 2024. You can read more about the tax credit amounts here. This rebate only qualifies if you meet the income threshold.

Alberta

Rebates in Alberta are paid quarterly and are as follows :

The base amount for Alberta is:

$225 for an individual
$112.50 for a spouse or common-law partner
$56.25 per eligible child under the age of 19
$112.50 for the first eligible child in a single-parent family

The rural supplement is:

$45 for an individual
$22.50 for a spouse or common-law partner
$11.25 per eligible child under the age of 19
$22.50 for the first eligible child in a single-parent family

Saskatchewan

Rebates in Saskatchewan are paid quarterly and are as follows:

The base amount for Saskatchewan is:

$188 for an individual
$94 for a spouse or common-law partner
$47 per eligible child under the age of 19
$94 for the first eligible child in a single-parent family

The rural supplement is:

$37.60 for an individual
$18.80 for a spouse or common-law partner
$9.40 per eligible child under the age of 19
$18.80 for the first eligible child in a single-parent family

Manitoba

Rebates in Manitoba are paid quarterly and are as follows:

The base amount for Manitoba is:

$150 for an individual
$75 for a spouse or common-law partner
$37.50 per eligible child under the age of 19
$75 for the first eligible child in a single-parent family

The rural supplement is:

$30 for an individual
$15 for a spouse or common-law partner
$7.50 per eligible child under the age of 19
$15 for the first eligible child in a single-parent family

Ontario

Rebates in Ontario are paid quarterly and are as follows:

The base amount for Ontario is:

$140 for an individual
$70 for a spouse or common-law partner
$35 per eligible child under the age of 19
$70 for the first eligible child in a single-parent family

The rural supplement is:

$28 for an individual
$14 for a spouse or common-law partner
$7 per eligible child under the age of 19
$14 for the first eligible child in a single-parent family

 

 

 

Quebec

The only other province besides BC to have its own provincial carbon tax in place, before the federal government initiated theirs in 2018, is Quebec.

Quebec has a cap-and-trade system, setting caps on emissions by industry. Companies that cannot reduce their emissions below that cap must buy credits from a carbon market shared with California. While Quebec mostly targets energy producers with its system, drivers in the Montreal area cough up a tax on gas.

The minimum price per tonne for credits varies in the province. All revenues go towards various measures to reduce carbon emissions and fight climate change. Unfortunately for those looking for a federal rebate—no luck, since Quebec does not participate in the federal plan.

New Brunswick

Rebates in New Brunswick are paid quarterly and are as follows:

The base amount for New Brunswick is:

$95 for an individual
$47.50 for a spouse or common-law partner
$23.75 per eligible child under the age of 19
$47.50 for the first eligible child in a single-parent family

The rural supplement is:

$19 for an individual
$9.50 for a spouse or common-law partner
$4.75 per eligible child under the age of 19
$9.50 for the first eligible child in a single-parent family

P.E.I.

Rebates in Prince Edward Island are paid quarterly and are as follows:

The base amount for Prince Edward Island is:

$110 for an individual
$55 for a spouse or common-law partner
$27.50 per eligible child under the age of 19
$55 for the first eligible child in a single-parent family

The rural supplement is included in the above base amounts, as all residents are eligible.

Newfoundland & Labrador

Rebates in Newfoundland & Labrador are paid quarterly and are as follows:

The base amount for Newfoundland and Labrador is:

$149 for an individual
$74.50 for a spouse or common-law partner
$37.25 per eligible child under the age of 19
$74.50 for the first eligible child in a single-parent family

The rural supplement is:

$29.80 for an individual
$14.90 for a spouse or common-law partner
$7.45 per eligible child under the age of 19
$14.90 for the first eligible child in a single-parent family 

Nova Scotia

Rebates in Nova Scotia are paid quarterly and are as follows:

The base amount for Nova Scotia is:

$103 for an individual
$51.50 for a spouse or common-law partner
$25.75 per eligible child under the age of 19
$51.50 for the first eligible child in a single-parent family

The rural supplement is:

$20.60 for an individual
$10.30 for a spouse or common-law partner
$5.15 per eligible child under the age of 19
$10.30 for the first eligible child in a single-parent family

Northwest Territories, Yukon & Nunavut

Having implemented its territorial carbon tax in 2019, Northwest Territories will charge around 11.7 cents per litre of gas this year for drivers. The offsets and rebates, however, are quite generous with a 100% rebate on home heating fuel, and a cost-of-living offset of up to $104 per adult and $120 per child.

Yukon and Nunavut signed on to the federal carbon tax plan, with Yukon collecting revenue and distributing the rebates. Rebates are in the range of $80 per individual and a little more if you live outside of Whitehorse. Nunavut covers half the carbon levy, reducing its gas price increase by half. It does not offer rebates.

  

When will I get the CAI carbon tax rebate payment?

Are you wondering about carbon tax rebate cheque dates? Before 2022 the CAI credit could be claimed on your income tax return and was automatically applied to your balance owing for the year or added to any refund you are entitled to. However, starting in mid-2022 this CAI credit has become a quarterly payment deposited on the 15th of April, July, October, and January. The deposit may show up in your online account and bank statement labelled as "Federal Payment", "EFT Credit Canada", or "Canada Fed".

Climate Action Incentive Payment Notice

The CRA sends a Climate Action Incentive Payment notice when you’re eligible. Notices planned for April 2025 began being issued around April 22. If you're enrolled in direct deposit, you'll see the payment in your bank account under “Canada Carbon Rebate.” If not, you’ll receive a mailed cheque. Keep an eye on your CRA My Account, where you can also view monthly reminders and the scheduled payment month.

CAIP Underpayment & Meaning

If you've paid tax periods without receiving the full CAI entitlement, you may experience a CAIP underpayment. This can occur due to filing late or incomplete Schedule 14s. An underpayment typically means you've received less than your full entitlement for that period. In many cases, the CRA will automatically rectify this by issuing a tax refund or applying the owed amount as a credit to income tax balances or tax debt, depending on whether you owe federal taxes.

Refundable Credit Claimed Annually vs Quarterly Benefit

Prior to 2022, the CAIP operated as a refundable tax credit claimed annually on your personal income tax return. Since mid‑2022, it transitioned into a refundable credit split into quarterly benefit payments—January, April, July, and October—eliminating the need to wait until tax season for a lump-sum tax refund.

Federal Pollution Pricing & CAI

Federal pollution pricing applies in Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, PEI, and Newfoundland & Labrador—the jurisdictions covered by CAI/CAIP. These provinces do not meet federal stringency requirements, so about 90% of revenue collected is returned to residents through CAIP, with the remainder funding small businesses, farmers, and Indigenous initiatives.

Common Law Partner & Such a Person

Only one person per household—the spouse or common law partner—can receive the CAIP on behalf of the family. A qualified dependant could be a child or “such a person” in shared-custody arrangements. In shared custody, each parent receives 50% of the payment they would otherwise receive, ensuring fairness.

Interaction with Tax Debt & Income Tax Balances

If you owe tax debt or have outstanding balances in your income tax return, the CRA may apply CAIP payments to that debt first, reducing or eliminating your liability. Any remainder will be paid out as a tax refund via your chosen method. It’s key to file your taxes and report your spouse/common law partner’s information accurately to ensure the correct CAIP entitlement.

How much is the carbon tax?

We hear a lot about how the carbon tax is designed to go after the big polluters in various industries, but if you’re driving a conventional fuel-burning car, or heat your home using natural gas, for example, you will be paying extra too.

Under the carbon tax levy, filling up your gas tank costs 17 cents extra per litre; something to consider if you’re weighing up the costs of switching to an energy-efficient electric vehicle.

Those who heat large homes and drive frequently will be paying more under the plan. The government estimates an average yearly cost of $564 in 2022 for a household in Ontario, for example. However, with an average rebate of $697 most will end the year in the green.

In Saskatchewan, where the temperatures are cold and the roads long, the yearly estimated cost would be higher at $946 per household. But rebates can be well over $1,000 depending on the size of your family. The average cost impact per household of the federal system can be found here.