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).
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.
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.
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:
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:
The carbon tax rebate takes families into consideration. However, a dependent child has to fulfill all of the requirements below:
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.
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:
If you don’t have children, you need to fill out the following form:
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:
Obviously, you can’t claim the CAI if you live outside of the selected provinces either.
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:
Residents of Alberta, Saskatchewan, Manitoba, and Ontario will receive four equal payments:
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.
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 |
To apply for and claim Climate Active Incentive payments, all you have to do is:
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Bryan is a graduate of Dawson College and Concordia University. He has been writing for Loans Canada for five years, covering all things related to personal finance, and aims to pursue the craft of professional writing for many years to come. In his spare time, he maintains a passion for editing, writing screenplays, staying fit, and travelling the world in search of the coolest sights our planet has to offer.
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