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Climate Action Incentive (CAI) Quarterly Payments
Income Tax Act s. 122.8
The Climate Action Incentive refundable tax credit was included in the 2018 Federal Budget and enacted for 2018 and later years as part of Bill C-86, Budget Implementation Act 2018, No. 2. It is now a quarterly payment, instead of being refunded as a tax credit on the tax return. The tax return still must be filed to be eligible to receive the CAI payments.
Climate Action Incentive Topics
The 2021 Federal Budget announced that starting in 2022, the CAI will be paid to taxpayers at the beginning of each quarter, instead of being included on the tax return. The 2022 CAI was not claimed on the 2021 tax return, but the 2021 tax return had to be filed in order to receive the quarterly payments, the same way that other quarterly payments and refundable tax credits depend on the tax return being filed. If you live outside a census metropolitan area, schedule 14 of the 2021 tax return must be completed. The legislation for this change was included in Bill C-19 Budget Implementation Act, 2022, No. 1, which received Royal Assent on June 23, 2022.
The quarterly payments started in July 2022 with a double payment, for the first two quarters of the 2022-2023 fuel charge year (April 2022 to March 2023. See the December 3, 2021 news release.
Taxpayers whose 2022 personal income tax returns were not assessed on or before March 24th did not receive their April 14, 2023 climate action incentive payments. See Climate action incentive payment on the CRA website. However, this information was added to the website after March 31st. Thanks to Jamie Golombek, CIBC Managing Director, Tax & Estate Planning, for sharing the Toronto Sun article GOLDSTEIN: Carbon tax rebates delayed for all but early tax filers.
It appears that the April payment will be made on May 15th for the missed April payments. Check your CRA My Account to see if it indicates a payment for that date is in progress.
The only provinces for whom this credit is available for 2022 were:
The above provinces continue to be eligible for this credit in the 2023-24 year. The following provinces are eligible for this credit beginning July 1, 2023:
New Brunswick announced in their 2023 Budget that they would be adopting the federal "backstop" for carbon taxation as well. No start date was indicated.
The above provinces have not adopted the federal system for pricing carbon pollution, or their systems do not meet the federal standard for reducing carbon pollution. A federal fuel charge applies to these provinces, 90% of which is returned to residents through the Climate Action Incentive payments.
For those jurisdictions that have voluntarily adopted the federal system, direct proceeds are directly returned to the governments of those jurisdictions, not to the residents.
The residents of NL, NS and PE are not eligible for the April 2023 payment because the federal fuel charge will not apply to these provinces until July 1, 2023.
Only residents of the affected provinces on the first day of the payment month and the last day of the previous month are eligible, and the resident must meet at least one of the following criteria at that time:
The months specified for the 2021 taxation year are the months of April, July, and October of 2022, and January 2023. Thus, if a person has turned 19 before one of those months they will be an eligible individual. If they are under 19 before one of those months they will still be a qualified dependant.
If there are adult children age 18+ (19+ for the 2022 and later payments) in the household they should file their own tax return in order to claim the full adult climate action incentive, as well as to receive the GST/HST credit if they are eligible.
The 2023-24 annual payment amounts for a family of 4 will range from $976 in Ontario to $1,544 in Alberta. Residents of Newfoundland and Labrador, Nova Scotia, and Prince Edward Island will receive 3 quarterly payments starting in July 2023, with payments for a family of 4 ranging from a total for 9 months of $960 for PEI (including 10% supplement) to $1,312 for NL.
See the following Department of Finance announcements:
Climate Action Incentive payment amounts for 2023-24 - 4 quarterly payments starting April 2023
Climate Action Incentive payment amounts for 2022-23 (cheques to be mailed quarterly starting July 2022, with 2 quarters being paid in the initial payment)
Climate Action Incentive payment amounts for 2021 (2020 tax return)
Climate Action Incentive payment amounts for 2020 (2019 tax return)
Climate Action Incentive payment amounts for 2019 (2018 tax return)
CAI payment amounts for subsequent years will be specified by the Minister of Finance.
Climate Action Incentive 10% Supplement for Residents of Small and Rural Communities, Increasing to 20%
If you reside outside of a census metropolitan area (CMA) on December 31, as defined by Statistics Canada, then you are eligible for a 10% supplement to the baseline amount of the CAI. This supplement will be increased to 20% starting in April 2024, as per the October 26, 2023 announcement by the federal government.
See the Canada Revenue (CRA) information Find out if you qualify for the 10% supplement for residents of small and rural communities
The CAI is claimed by filing your income tax return each year. You must tick a box on page 2 of the return (for affected provinces) if you reside outside of the listed census metropolitan areas. All residents of PEI are entitled to the 10% rural supplement, and do not need to tick a box to apply.
Tax Return Schedule 14, Climate Action Incentive for tax year 2021 - had to be completed if you lived outside a census metropolitan area, for Alberta, Manitoba, Ontario or Saskatchewan. See the tax package for your province, Schedule 14.
The CAI was claimed on the federal income tax return up until the 2020 tax return, and was calculated on Schedule 14 Climate Action Incentive. The CAI is included in the 2020 Detailed Canadian Tax Calculator, near the bottom of the calculator. The CAI amount must be entered by the user (as a negative amount) and is not checked.
For the amounts for the 2020 tax return see Climate Action Incentive payment amounts for 2021 (2020 tax return). Links for earlier years can be found above.
Fuel charge relief - exemption from federal fuel charge for fishers, farmers and certain others, links to exemption certificates
Newfoundland and Labrador Carbon Pricing Plan - until June 30, 2023
Revised: November 01, 2023
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