Many Canadians are preparing to receive the first payment of the year from Ottawa’s carbon pricing rebate program. The amount of this rebate will vary depending on the province. The rebate applies solely to Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, P.E.I, and Newfoundland and Labrador, which are the provinces where the federal fuel charge is collected. The payment will be received via direct deposit or cheque beginning Jan. 15, provided that income tax and benefit returns have been filed.
The federal government’s Climate Action Incentive Payment (CAIP) program is sending out its first rebate of 2024. The amount of the rebate varies by province and family size. Payments are determined based on the number of adults and children in the household, and the larger the household, the larger the rebate. There is also a rural supplement of 10 percent of the base amount for residents of small and rural communities. A family of four in Alberta, for example, will receive payments of up to $386.
Despite the government’s claims that the rebate program exceeds the carbon tax paid by most households, a report by the Parliamentary Budget Officer suggested otherwise. The report, released in March, indicated that most Canadian households will incur a “net loss” of between $377 and $911 even after receiving federal rebates. The program was heavily criticised by Canadians, with many expressing unwillingness to pay higher prices for fuel to support the net-zero emissions policies.
Carbon pricing includes a tax on carbon-emitting fuels and was introduced in 2019 as part of the Liberal government’s goal to reduce CO2 emissions. Prime Minister Justin Trudeau described the carbon tax as necessary to convince Canadians to switch to more eco-friendly fuels and achieve net-zero carbon emissions by 2050. The price started at $20 per tonne and was set to increase by $10 per tonne each year until reaching $50 per tonne in 2022. After this, it was supposed to increase by $15 per tonne every year until it reached $170 per tonne in 2030.