Filling up our tanks at the gas station and heating our homes during the long Canadian winters, we all do it. So why does it feel like we need to take out a loan just to cover these costs? Because life is expensive.
Thankfully, the government offers certain tax free payments like the Climate Action Incentive Payment (CAIP).
What Is The Climate Action Incentive (CAI) Payment?
The Climate Action Incentive (CAI) payment is a quarterly benefit. Until 2020, it was a refundable tax credit. You had to claim it on your income taxes. The federal government introduced it to help offset the cost of federal pollution or fuel charges.
As of 2021, it is now paid quarterly for people eligible for the CAIP. The Climate Action Incentive, also known as the carbon tax rebate, is available in Alberta, Saskatchewan, Manitoba, and Ontario.
Newfoundland and Labrador, Nova Scotia, and Prince Edward Island are joining the CAIP as of July 2023.
How Does The Climate Action Incentive Payment/Carbon Tax Rebate Work?
All of these provinces have a carbon tax known as the “fuel charge”, which residents pay when buying gasoline at a pump or heating their homes. This additional tax is the government’s way of getting its citizens to make as many green choices as possible and boosting the economy in the process.
Essentially, the Climate Action Incentive Payment is meant to offset the cost of the carbon tax and give you some money back for your fuel-related expenditures. Hence the nickname the carbon tax rebate.
The quarterly payment can go toward other important things, like personal debt repayment and maintaining a healthy credit score.
Who Is Eligible For The Climate Action Incentive Payment (CAIP)?
The CAIP or carbon tax rebate is open to residents of the eligible provinces. The Canada Revenue Agency states that you have to be a resident of an eligible province on both:
- The last day of the month previous to a payment month.
- The first day of a payment month.
So if a payment month is July, you have to reside in the eligible province on June 30 and on July 1.
To qualify for the CAIP, the potential beneficiary must also be one of the following:
- Be at least 19 years old;
- Have or had a spouse or common-law partner;
- Have or had a child and live (or lived) with the child.
Qualifying For The Climate Action Incentive For A Dependent Child
The carbon tax rebate takes families into consideration. However, a dependent child has to fulfill all of the requirements below:
- Be under age 19;
- They must live with you;
- You are primarily responsible to care for and raise the child;
- The child is registered for the Canada child benefit (CCB).
Furthermore, if you co-parent your child with your ex-spouse or ex-common law partner, each of you will get 50% of the CAIP.
The Carbon Tax Rebate Is Available to New Residents of Canada
If you are a new resident to Canada and you live in one of the eligible provinces, you can get the CAIP. You still have to fulfill the qualifications outlined above.
To register for the CAIP, you need to fill out certain tax forms and mail them to a tax centre.
If you have dependent children, you need to fill out:
- Form RC66 for child benefits and GST/HST credits.
- Form RC66SCH, Status in Canada and Income Information for the Canada Child Benefits Application
If you don’t have children, you need to fill out the following form:
- RC151, GST/HST Credit and Climate Action Incentive Payment Application for Individuals Who Become Residents of Canada.
Who Is NOT Eligible For The Climate Action Incentive Payment (CAIP)?
Like any government tax program, the Climate Action Incentive Payment involves certain requirements that can make you ineligible for the credit. For example, you cannot claim the CAI payment for yourself, your spouse/partner or your child, if you are:
- Not a Canadian resident
- In prison or a similar facility for more than 90 days of the tax year
- Someone who qualifies for a child’s special allowance (CSA) payment
- A government servant or officer from a foreign country, like a diplomat, an employee of such a person or a family member who lived with such a person.
Obviously, you can’t claim the CAI if you live outside of the selected provinces either.
How Much Money Can You Get Under The Climate Action Incentive?
The amount of money that you can expect to receive under the terms of the Climate Action Incentive tax credit program depends on a number of factors, such as:
- Your province of residence & citizenship status
- Your marital status (single, married or common-law)
- The size of your family (how many children/dependents you have)
Climate Action Incentive Payment Dates For 2023-2024
Residents of Alberta, Saskatchewan, Manitoba, and Ontario will receive four equal payments:
- April 2023
- July 2023
- October 2023
- January 2024
Residents of Newfoundland and Labrador, Nova Scotia, and Prince Edward Island will receive three equal payments since the fuel charge only comes into effect in July of 2023.
- July 2023
- October 2023
- January 2024
Climate Action Incentive Payments For 2023-2024
Depending on what province you live in, you will receive three of four equal payments throughout the year. Here is a breakdown of what those payments will be.
| AB | SK | MB | ON | |
| Per Single Adult | $772 | $680 | $528 | $488 |
| Per Spouse/Common-law Partner | $386 | $340 | $264 | $244 |
| Per Dependent Child under 19 | $193 | $170 | $132 | $122 |
| Per First Child in a Single-Parent Family | $386 | $340 | $264 | $244 |
How Can I Claim The Climate Action Incentive Payment (CAIP)?
To apply for and claim Climate Active Incentive payments, all you have to do is:
- Fill out your income tax and benefit return
- File your tax return with the Canada Revenue Agency (CRA)
- Make certain to register your child or children for the CCB.
