Your Canada Carbon Tax Rebate Explained by Province
Your carbon tax rebate, now called the Canada Carbon Rebate (formerly known as the Climate Action Incentive Payment (CAIP)), will all depend on where you live in Canada, plus the size of your household.
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.
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.
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.
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
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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.
What is the cap-and-trade program?
The everyday user of greenhouse gas-emitting vehicles shouldn’t be too concerned about a cap-and-trade system because it mostly targets big polluters in industries like oil & gas. Under cap-and-trade, a regulatory body like the provincial or federal government sets a “cap” on emissions output, setting a limit to how much industry sectors are allowed to pollute each year. The government body will issue permits, allowances if you will, for industries to pollute and these can be “traded” or sold to other companies who need to emit more.
For example, a company that emits 10 tons below its cap can trade its extra 10 allowances in the market or bank them for future use. As part of the carbon tax, the federal government is calling this an output-based pricing system where compliance obligations can be met by paying carbon pollutions price ($20/t currently) or purchasing credits from industrial facilities that beat their standard.
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".
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.
