The program is designed to offset some costs imposed by Ottawa’s carbon tax system, which puts a price on emissions, including those produced by the use of gasoline and natural gas. The payments are only available to residents of provinces without pollution pricing systems that meet the new federal standard. In all other provinces and territories, revenue generated by carbon taxes is returned to provincial and territorial governments rather than directly to residents. Ottawa says it “keeps no direct revenue from pollution pricing,” which is seen as a strategy to punish industries that produce carbon emissions and to encourage adaptations and innovations that reduce pollution.
How much will you get this year?
The payment for the Climate Action Incentive will be paid in quarterly installments for the first time this year. In previous years, the payment was submitted as an item on tax returns. See how much a family of four will receive in total this year:
$1,079 in Alberta. $1,101 in Saskatchewan. $832 in Manitoba. $745 in Ontario.
Residents of small and rural communities will receive an additional 10 percent on top of these amounts. You can see a more detailed breakdown of payments on the government’s website. Today’s payment will be the largest lump sum because it covers the first two quarters of the financial year (April-June and July-September). Subsequent deposits in October and January will be half of what you received today. “I know things are tough right now with the cost of living going up, fuel prices, food prices, so every little bit helps,” Prime Minister Justin Trudeau said during a photo shoot Friday afternoon with a family of Ottawa to discuss the discount. “That’s one of the reasons we moved it to quarterly payments.”
How much is the plan costing Canadians?
While the actual economic cost of the carbon tax depends on an individual’s fossil fuel use, the federal government says “most households will receive more than they pay for as a result of the federal carbon pricing system.” At a new rate of $50 per tonne of emissions, this year’s carbon tax increase amounts to an increase of 2.21 cents per liter of petrol and 2.68 cents per liter of diesel. Ottawa plans to raise the carbon tax to $170 per tonne by 2030. But a recent report by the Parliamentary Budget Office (PBO), Canada’s fiscal watchdog, concluded that for most households — especially high-income ones — the federal carbon price represents a “net loss.” The PBO looked at the cost of the levy itself, which GST consumers have to pay, and its impact on employment and investment income. “When the economic impact is included,” said Yves Giroux, the parliament’s budget officer, “most people are worse off.” The PBO report did not attempt to estimate the long-term costs of inaction on climate change, such as the prospect of more frequent extreme weather events, catastrophic storms and droughts. Alberta, Saskatchewan and Ontario launched a legal challenge to Ottawa’s carbon tax scheme, which the provinces called unconstitutional. The Supreme Court finally upheld the tax in a ruling last year.
