All You Need To Know About Climate Action Incentive Payment—Canada Carbon Rebate

What is the climate action incentive payment?

The climate action incentive payment (CAIP) is money that some Canadians receive from the government to offset costs related to the federal carbon tax.

Why does it exist? Climate change is an issue that affects all Canadians and fighting it means reducing our national carbon emissions substantially—and quickly. To help in this effort, in 2019 the federal government introduced the federal fuel charge, aka the carbon tax, which raises the price of some carbon-emitting purchases you might be making, like fueling up your car.

While this charge might make some things more expensive for you and your family at point of purchase, the good news is, you’ll probably get money back to compensate. The federal government isn’t keeping revenue from the carbon tax: 10% is earmarked for small businesses and Indigenous groups, and the remaining 90% is going right back into your and your neighbours’ pockets, in the form of the CAIP. In fact, most people will actually get back more than they pay. (The specifics depend on where you live—see below.)

Who receives the CAIP?

The CAIP is a federal program, but it applies only to jurisdictions that don’t have their own carbon pricing system. If you’re a resident of Quebec or British Columbia, you won’t receive the CAIP because your province has its own system in place. If you live in the Northwest Territories, Nunavut, or Yukon, you get a territorial rebate, not the CAIP.

That leaves the remaining eight provinces: Alberta, Manitoba, Ontario, and Saskatchewan have been part of the CAIP since the beginning and continue to be (although, this program is called the “carbon tax rebate” in Alberta); and, on July 1, 2023, the Maritime provinces joined the party. (Is it a kitchen party? Depends on what you do with the cheque.)

You’re eligible for the CAIP under the following conditions:

• You’re a resident of Canada for income tax purposes.
• You’re a resident of a participating province.
• You meet at least one of the following criteria:
  • You’re at least 19 years old in the month the payment goes out.
  • You have (or previously had) a spouse or common-law partner. 
  • You are a parent of at least one child who lives with you (or has lived with you).

If you’re a parent with at least one child living with you, you must be their primary parent to receive their full CAIP allocation and they must be registered under the Canada Child Benefit plan (CCB).

If you don’t have full custody of your child/children, you can still get 50% of the CAIP amount that you’d get if your child lived with you full-time.

There are four payments a year, and to get a payment, you have to meet these conditions at the beginning of the payment month. For example, if you turned 19 in August 2023, you would get the October 2023 payment, but not the July 2023 one.

If you have a spouse or common-law partner, only one of you will receive the CAIP on behalf of your entire family. (Note: To receive a payment on your child’s behalf, they must be registered for the CCB.)

How do you apply for the CAIP?

The beauty of the CAIP (other than, you know, the cash) is that it’s easy to start receiving. So long as you file your taxes every year, you should get the payments automatically.

Are you a newcomer to Canada? If you are a new resident of Canada, follow the steps below to apply for the CAIP, completing the following forms: 

• If you have children: 
  • Fill out and sign Form RC66, Canada Child Benefits (CCB) application to apply for all child and family benefits, including the GST/HST credit. 
  • You must also complete form RC66SCH, Status in Canada and Income Information for the Canada Child Benefits (CCB) application to capture your citizenship and residency information, along with your Statement of Income. 
• If you do not have children: 
  • Fill out and sign Form RC151, GST/HST Credit and Climate Action Incentive Payment Application for Individuals Who Become Residents of Canada. Mail the completed form to your tax centre.

If you’re a resident of a small or rural community, you might be eligible for an additional payment called the rural supplement. To get this, make sure to check the relevant box on page two of your income tax and benefit return.

What are the CAIP payment dates and amounts?

Everyone receives the same CAIP amount, regardless of their income. But how much you and your family get will depend on where you live and your family situation. Payments go out in April, July, October, and January. 

For 2023, these payment dates are April 14, July 14, October 13, and January 15, 2024. Residents of Alberta, Saskatchewan, Manitoba, and Ontario will receive payments on all four of these dates. Residents of Newfoundland and Labrador, Nova Scotia, and Prince Edward Island began receiving quarterly payments in July 2023. Residents of New Brunswick will receive a double payment in October 2023 and quarterly payments thereafter. Payment amounts (per quarter) for a single adult range from $92 in New Brunswick to $193 in Alberta, or up to $772 per year, and increase based on family size according to this Government of Canada chart.