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Filing Your Return -> Federal Climate Action Incentive

Line 45110 Climate Action Incentive (CAI) Refundable Tax Credit

 - will not be on 2021 tax returns

Note: Before tax year 2019, line 45110 was line 449.

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.

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.  The amounts to be claimed for 2021 on the 2020 tax return are shown below.

CAI to be Paid Quarterly Starting in 2022

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 will not be claimed on the 2021 tax return, but the 2021 tax return must 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 quarterly payments will start 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.

Provinces Affected

The only provinces for whom this credit was available for 2020 (on the 2019 tax return) were:

bullet Alberta
bullet Manitoba
bullet Ontario, and
bullet Saskatchewan

The same provinces had the credit available for 2021, on the 2020 tax return.

These provinces have not adopted the federal system for pricing carbon pollution, or their systems do not meet the federal standard for reducing carbon pollution.  For those jurisdictions that have voluntarily adopted the federal system, direct proceeds will be directly returned to the governments of those jurisdictions.

Who is Not Eligible:

bullet non-resident of Canada at any time in the tax year (i.e., 2019 for 2020 CAI)
bullet those confined to a prison or similar institution for a period of at least 90 days during the tax year
bullet those exempt in Canada at any time in the tax year due to being an officer or servant of the government of another county, such as a diplomat, a family member who resided with such a person, or an employee of such a person
bullet person in respect of whom a children's special allowance (CSA) was payable at any time in the tax year
bullet taxpayers who died before April 1 of the year following the tax year (i.e., before April 1 2021 for 2020 CAI claimed on the 2020 tax return).

Who is Eligible:

Only residents of Alberta, Manitoba, Ontario or Saskatchewan on December 31 of the taxation year are eligible, and the resident must meet one of the following criteria at that time:

bullet 18 (19+ for the 2022 & later payments) years of age or older, or
bullet had a spouse or common-law partner, or
bullet is a parent who lives with their child

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.

Climate Action Incentive Annual Amounts 2022

bulletquarterly payments starting with doubled payment in July 2022
bullettaxpayers eligible for 10% supplementary amount for residents of small and rural communities must complete Schedule 14 on their 2021 tax return and include it with their return.
  Ontario Alberta Manitoba Saskatchewan
A Single adult, or first adult in a couple1 $373 $539 $416 $550
B Second adult in a couple2, or first child of a single parent 186 270 208 275
C Each child under 183 (starting with the 2nd child for single parents) 93 135 104 138

1 Referred to as a qualified individual in the legislation.
2 Referred to as a qualified relation in the legislation.
3 Referred to as a qualified dependant in the legislation.

Department of Finance Announcements

Climate Action Incentive payment amounts for 2022 (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.

CAI Calculation Example for a Family of 4 (2 adults, 2 children) for 2022, including 10% supplement

  Ontario Alberta Manitoba Saskatchewan
Baseline amount  (A + B + 2 x C) $745.00 $1,079.00 $832.00 $1,376.00
10% Supplement1 for residents of small and rural communities 74.50 107.90 83.20 137.60
Annual amount for family of 4 in small/rural communities $819.50 $1,186.90 $915.20 $1,513.60
First payment Jul 2022 (double) $409.75 $593.45 $457.60 $756.80
Oct 2022 & Jan 2023 payments (each) $204.88 $296.73 $228.80 $378.40

1 10% Supplement - see next section

Climate Action Incentive 10% Supplement for Residents of Small and Rural Communities

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.  

See the Canada Revenue (CRA) information Find out if you qualify for the 10% supplement for residents of small and rural communities

Federal Government Climate Action Incentive Resources

Department of Finance information on the Climate Action Incentive

Canada Revenue Agency - Climate Action Incentive Payment

Tax Return Schedule 14, Climate Action Incentive for tax year 2021 - must be completed if you live outside a census metropolitan area, for Alberta, Manitoba, Ontario or Saskatchewan.  See the tax package for your province, Schedule 14.

Other Provinces and Territories and Climate Action Measures

Alberta repeals the provincial carbon tax on May 30, 2019

BC Carbon Tax and Low Income Climate Action Tax Credit

Newfoundland and Labrador Carbon Pricing Plan

Northwest Territories - Implementing Carbon Pricing in the NWT

Nova Scotia Cap-and-Trade Program, Energy Efficiency Nova Scotia

Nunavut and Pollution Pricing

Prince Edward Island Climate Change Plan, Energy Efficient Equipment Rebates and Energy Rebate

Quebec - The Carbon Market, a Green Economy Growth Tool

Yukon and Pollution Pricing

Revised: March 24, 2022

 

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