With the cost of inflation many Canadians aren’t able to afford everyday necessities as easily as they used to. There are also extra taxes and fees added to these necessities that make it much more difficult. The government has recognized this and is offering incentives and benefits to help Canadians battle inflation. While the federal government used to supply a Climate Action Incentive Credit to Canadians on their yearly personal income tax returns, they have now amended the program to the Climate Action Incentive Payment (CAIP). This quarterly CAI payment began in 2022 and is available to residents in certain provinces in Canada that are affected by pollution pricing.
About the CAIP
This program provides a refundable tax credit to residents of certain provinces in Canada. It is part of a new proposed affordability measure. The Canada Revenue Agency (CRA) provides these payments to those who are affected by the federal fuel charge, also known as the provincial carbon tax. This is why only certain provinces receive the credit. In these provinces the federal pollution pricing system applies. The government understands that the cost of living is expensive and these quarterly payments will often cover more than what the resident has paid. This is especially true for low to middle income families.
The reason that only some provinces have a pollution pricing system, is that provinces can choose to either create their own pollution pricing system or they can choose to use the federal system. The provinces that use the federal system are eligible for this credit. The other provinces either have their own provincial carbon tax or they are in the process of creating a pollution pricing system that meets the standards required by the federal government.
How it works
The idea behind these pricing systems was to fight climate change by reducing carbon pollution. The tax was there to make prices higher deterring Canadians from spending so much on fuel. Instead of charging residents a bill, the amounts are added to heating bills as well as fuel surcharges. The intention of the CAIP was to combat some of these costs for Canadians to give them some money in their pockets.
Who is eligible?
As of right now, the provinces that receive the CAIP, also referred to as the Canada Carbon Rebate, are Alberta, Ontario, Manitoba, Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland and Labrador, and Saskatchewan.
In order to be eligible for the payment in these provinces, you must have lived in the province the first day of the month that the payments will be received, as well as the last day of the previous month. You must also meet one of the following conditions:
- Be 19 years old
- Have (or had) a spouse or common law partner
- You are (or were) a parent and live (or lived) with your child
In order to have an eligible child, they must meet the following conditions:
- They are under the age of 19
- They live with you
- You are primarily responsible for their care
- The child is registered for the Canada Child Benefit (one of the Child and Family Benefits)
CAIP in 2024 vs Previous Years
If you are someone who receives Climate Action Incentive Payments, then you have probably noticed that the process has changed. In previous years the CAIP was a tax credit and was referred to as the Climate Action Incentive Credit (CAIC). This amount was calculated when you filed your taxes and the credit was added to your annual tax return payments.
Now, as of July 2022, the incentive is known as the Canada Carbon Rebate, and it is received as a quarterly benefit. You do not need to apply for it but your eligibility will be determined after you have filed your tax return. If you are eligible then you will receive the payments. That being said, if you have a spouse or common-law partner, only one person will get the payment. This will be decided by whoever's tax return is assessed first. No matter which person receives it, the amount will be the same.
While you do not need to apply, you do need to complete your tax return every year to keep receiving payments. If you live in small or rural communities and qualify for the rural supplement, you do need to apply for it. There is a form you will need to fill out and attach to your tax return. This will be evaluated and you will start receiving that benefit as well if you are eligible. Just like the original CAIP, if you are common law or have a spouse only one will receive the credit. It will come at the same time as the CAIP.
How Much You Receive with the CCR
When it comes to how much you get with the CCR, it ultimately depends on the province that you live in. The amounts you receive are also based on the tax year before you receive the payments. In the case of 2024 payments, they were based on your 2023 tax return, and it will be same for any 2025 amounts but with your 2024 tax return. That being said, the benefit is universal and will not be reduced based on your adjusted net family income. The rural supplement is 10% of the base amounts that are listed below.
Ontario Payments
If you live in Ontario, the annual credit amounts are $560 for an individual, $280 for a spouse or common-law partner, $140 per child 18 and under, and $280 for the first child in a single-parent family.
Manitoba Payments
If you live in Manitoba, the annual credit amounts are $600 for an individual, $300 for a spouse or common-law partner, $150 per child 18 and under, and $300 for the first child in a single-parent family.
Alberta Payments
If you live in Alberta, the annual credit amounts are $900 for an individual, $450 for a spouse or common-law partner, $225 per child 18 and under, and $450 for the first child in a single-parent family.
Saskatchewan Payments
If you live in Saskatchewan, the annual credit amounts are $752 for an individual, $376 for a spouse or common-law partner, $188 per child 18 and under, and $376 for the first child in a single-parent family.
New Brunswick Payments
If you live in New Brunswick, the annual credit amounts are $380 for an individual, $190 for a spouse or common-law partner, $95 per child 18 and under, and $190 for the first child in a single-parent family.
Nova Scotia Payments
If you live in Nova Scotia, the annual credit amounts are $409 for an individual, $206 for a spouse or common-law partner, and $103 per child 18 and under.
Newfoundland and Labrador Payments
If you live in Newfoundland and Labrador, the annual credit amounts are $596 for an individual, $298 for a spouse or common-law partner, and $150.08 per child 18 and under.
Prince Edward Island Payments
If you live in Prince Edward Island, the annual credit amounts are $440 for an individual, $220 for a spouse or common-law partner, and $110 per child 18 and under.
CAIP/CCR Payment Dates
If you have filed your tax returns and are eligible for the CAIP/CCR, you should receive your payments on the 15 of April, July, October and December.
How you receive your CAIP/CCR payment depends on how you receive your tax return. Those who get their yearly tax return directly deposited into their bank account, will receive the CAIP the same way, along with any other government benefits that you qualify for.
If you owe any money to the federal government for taxes or have any other debt with them, this amount will be used to pay off that debt. You will then start receiving it again once the debt has been paid in full.
Overview
The CAIP is the federal government's way of reimbursing residents of provinces directly affected by the pollution pricing system. These provinces are currently Ontario, Alberta, Manitoba, New Brunswick, Nova Scotia, Newfoundland and Labrador, PEI, and Saskatchewan. In order to verify that you receive these benefits, you need to be sure that your yearly tax return is completed. Just like other government benefits, these payments will cease until your taxes are up to date. The amounts you receive for the CAIP/CCR are based on the province that you live in and not your yearly income. Since these quarterly payments are still new, people are still getting used to them but they will arrive on the 15th of the month when they are dispersed. Even if you don’t live in the provinces available to receive the CAIP/CCR, there are plenty of other government benefits that are helping Canadians get through this period of high inflation.
