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Canada Carbon Rebate (CCR) - formerly 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 payment was renamed in 2024 as the Canada Carbon Rebate (CCR). The tax return must be filed to be eligible to receive the quarterly payments.
Canada Carbon Rebate Topics
Carbon Rebate is Paid Quarterly - Last payment April 2025
April 2023 CAI Payments Delayed For Many
Carbon Carbon Rebate Incentive Annual Amounts
Carbon Carbon Rebate Supplement for Residents of Small and Rural Communities
Claiming the Carbon Rebate / Climate Action Incentive (CAI) 2022 and Later Tax Returns
Claiming the Climate Action Incentive 2021 Tax Return
Claiming the Climate Action Incentive 2020 and Earlier Years
Canada Carbon Rebate for Small Businesses - Taxable
Canada Carbon Rebate for Small Business - How to Report on the Tax Return
How Much Carbon Rebate Could a CCPC Receive?
Federal Government CAI and Fuel Charge Exemption Resources
Other Provinces and Territories and Climate Action Measures
Carbon Rebate/CAI is Paid Quarterly - Last Payment April 2025
On March 15th, an Order-In-Council was signed by Prime Minister Carney, reducing the carbon tax rate (fuel charge) to zero for April 1, 2025 to March 31, 2030. See Schedule 2 Table 5 of the Greenhouse Gas Pollution Pricing Act. The change was published in the Canada Gazette.
The final payment of the Canada Carbon Rebate (CCR) for individuals will be issued starting April 22, 2025, for individuals who have filed their 2024 income tax return electronically no later than April 2, 2025. See Canada Carbon Rebate (CCR) for individuals on the Canada website.
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.
April 2023 CAI Payments Delayed For Many
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.
Provinces Affected
The provinces for whom this credit is available for 2024-25 are:
 | Alberta |
| Manitoba |
| Ontario |
| Saskatchewan |
| New Brunswick |
| Newfoundland and Labrador |
| Nova Scotia |
| Prince Edward Island |
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 Canada Carbon Rebate (formerly 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.
Who is Not Eligible:
| non-resident of Canada at any time in the tax year (i.e., 2019 for 2020 CAI) |
| those confined to a prison or similar institution for a period of at least 90 days during the tax year |
| 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 |
| person in respect of whom a children's special allowance (CSA) was payable at any time in the tax year |
| taxpayers who died before the first day of the payment month ("specified month"). The payment months are January, April, July, and October. |
Who is Eligible:
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:
| 19 years of age or older, or, if they are under 19 years of age:
|
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.
Carbon Rebate / Climate Action Incentive Annual Amounts
The 2024-25 annual payment amounts for a family of 4 will range from $760 in New Brunswick to $1,800 in Alberta.
See the following Department of Finance announcements:
Canada Carbon Rebate amounts for 2024-25 - 4 quarterly payments starting April 2024
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.
Carbon Rebate 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. This supplement was increased to 20% starting in April 2024, as per the October 26, 2023 announcement by the federal government. The legislation for this increase was included in Bill C-59 which received Royal Assent on June 20, 2024.
See the Canada Revenue (CRA) information Supplement for residents of small and rural communities.
The 2024 Federal Economic Statement (FES) proposed to expand eligibility for the rural supplement to some census rural areas and small population centres within a Census Metropolitan Area (CMA). See the FES Canada Carbon Rebate Rural Supplement for more information, including a partial list of additional areas to be eligible for the supplement in 2025-26.
The government proposed to expand the rural supplement eligibility, but proposed legislation has not received Royal Assent, so is not being administered by CRA. See the March 2025 Life in the Tax Lane from Video Tax News for discussion of this topic, which is causing problems for taxpayers and tax preparers.
Claiming the Carbon Rebate / Climate Action Incentive (CAI) 2022 and Later Tax Returns
To receive the Canada Carbon Rebate payment on April 15, 2024, you and your spouse or common-law partner (if applicable) must have your income tax and benefit return filed electronically on or before March 15, 2024. For tax returns processed after this date, the April payment will be included in a subsequent payment after your return is assessed.
Rural Supplement: 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 rural supplement, and do not need to tick a box to apply.
Claiming the Climate Action Incentive 2021 Tax Return
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.
Claiming the Climate Action Incentive 2020 and Earlier Years
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.
Canada Carbon Rebate for Small Businesses - Taxable
This rebate, which was announced in Budget 2024, is a refundable tax credit for small and medium-sized Canadian-controlled private corporations (CCPCs). Eligible CCPCs will automatically receive the payment, with no need to apply for it. This credit is only available to provinces where the federal fuel charge is in place.
Finance Minister Chrystia Freeland announced on November 12, 2024, via an X post. that the Canada Carbon Rebate for small businesses would be tax free. See the related National Post article Carbon tax rebates for small business will be tax free, Freeland says after complaint by association. However, no draft legislation has been issued for this measure, and Parliament has been prorogued. Thus, unless legislation is created to make the rebate tax-free, the Canada Carbon Rebate payments for Small Businesses are considered taxable.
See the commentary from CRA confirming that these rebates are taxable, in a LinkedIn post by Ryan Minor, Director of Tax, CPA Canada. Unfortunately, the Department of Finance has not removed their web page indicating tax-free status of the rebates. This page was published very shortly after the announcement by Chrystia Freeland, so has probably been forgotten.
The rebate is based on the number of persons employed by the CCPC in the designated provinces between 2019 and 2023 inclusively. The rebate is only available to firms with 499 or fewer employees throughout Canada in the calendar year.
The 2023 corporate tax return must have been filed by the CCPC no later than July 15, 2024 to be eligible for the rebate. Payments should be received by most businesses by:
| December 16, 2024, if registered for direct deposit; or |
| December 31, 2024, if receiving a payment by cheque. |
A Finance Canada October 1, 2024 news release indicates that it is proposed that corporations that file their tax return for 2023 after July 15, 2024 and on or before December 31, 2024, would be eligible for the rebate. However, legislation enacting these changes requires Royal Assent before payments can be issued to these late-filing business.
From CRA:
Canada Carbon Rebate for Small Businesses indicates when it becomes available, more information will be provided regarding the removal of the fuel charge from the carbon pollution pricing system effective April 1, 2025.
Canada Carbon Rebate Estimator
Canada Carbon Rebate for Small Business (CCR-B - How to Report on the Tax Return
Please see the post by John Oakey, FCPA, FCA, TEP, CC, Vice President, Taxation, CPA Canada regarding how to report the Canada Carbon Rebate for Small Business on your T2 corporate income tax return. It is not necessary to be a LinkedIn member to see this LinkedIn post.
The rebate If the rebate amount has already been included in your net income then there are additional steps required to report the rebate without including twice in taxable income.
How Much Carbon Rebate Could a CCPC Receive?
The following table shows how much could be received by a CCPC with 100 employees in the designated provinces listed, based on the Carbon Rebate Estimator.
| Province | 2023 | 2022 | 2021 | 2020 | 2019 | Total |
| AB | $18,100 | $14,000 | $12,300 | $14,700 | n/a | $59,100 |
| SK | 23,300 | 29,800 | 24,400 | 27,100 | 11,000 | 115,600 |
| MB | 16,800 | 8,900 | 7,700 | 9,900 | 4,800 | 48,100 |
| ON | 14,600 | 8,600 | 7,500 | 6,800 | 2,600 | 40,100 |
| NB | 8,700 | n/a | n/a | n/a | n/a | 8,700 |
| NS | 11,900 | n/a | n/a | n/a | n/a | 11,900 |
| PE | 8,200 | n/a | n/a | n/a | n/a | 8,200 |
| NL | 17,900 | n/a | n/a | n/a | n/a | 17,900 |
Federal Government CCR and Fuel Charge Relief Resources
Canada Revenue Agency - Canada Carbon Rebate (CCR) - formerly Climate Action Incentive Payment
Fuel charge relief - exemption from federal fuel charge for fishers, farmers and certain others, links to exemption certificates
Other Provinces and Territories and Climate Action Measures
BC Carbon Tax and Low Income Climate Action Tax Credit - Carbon Tax ended March 31, 2025, and Climate Action Tax Credit final payment April 2025.
| See Premier's statement on carbon tax increase, released March 14, 2025 |
Newfoundland and Labrador Carbon Pricing Plan - until June 30, 2023
Northwest Territories - Carbon Tax
Climate Change in Nova Scotia, Energy Efficiency Nova Scotia - until June 30, 2023
Prince Edward Island Climate Change Plan, Energy Efficient Equipment Rebates and Energy Rebate - until June 30, 2023
Quebec - The Carbon Market, a Green Economy Growth Tool
Revised: April 21, 2025