First quarterly Climate Action Incentive payments sent to Ontarians
July 20, 2022
Guelph residents have begun to recieve their quarterly 2022-23 Climate Action Incentive (CAI) payments. To ensure that carbon pollution pricing remains affordable for Canadians, the federal government returns all proceeds to the jurisdictions where they were collected, with the majority of proceeds from the federal pollution pricing system returned directly to Canadians through CAI payments. While pollution pricing costs the average family $578 in Ontario, the climate action incentive ensures the majority of households will recieve $712 annually in CAI quarterly payments.
Under the federal pollution pricing system, the government applies a price on pollution in jurisdictions that do not have a system of their own that meets the federal stringency requirements — specifically Ontario, Manitoba, Saskatchewan, and Alberta. In those jurisdictions, approximately 90 per cent of direct proceeds from carbon pollution pricing are returned to residents of those provinces through CAI payments. The other 10 per cent is used to support farmers, small businesses, Indigenous groups, schools, universities, and municipalities. No funds collected are retained by the federal government.
In 2022-23, the increased CAI payments announced today mean a family of four will receive $745 in Ontario, $832 in Manitoba, $1,101 in Saskatchewan, and $1,079 in Alberta. Families in rural and small communities are eligible to receive an extra 10 per cent. Full details on payment amounts for individuals and families in 2022-23 are specified in the backgrounder.
In Budget 2021, the government proposed to change CAI payments from a refundable credit claimed annually on personal income tax returns to quarterly payments made through the benefit system. Starting this July with a “double-up” payment for the first two quarters of the 2022-23 fuel charge year (April-June and July-September), followed by single quarterly payments in October and January, CAI payments will be delivered on this more regular basis.
Even though individuals will no longer receive CAI payments through their tax returns, they still need to file a return to receive the quarterly payments.
“Pollution has a cost, and putting a price on carbon pollution is recognized as one of the most efficient ways to drive down emissions. By maintaining a fair price on pollution across the country, we’re ensuring that pollution pricing remains affordable for Canadians no matter where they live. In provinces without their own pricing system, we’re returning proceeds directly to Canadians and putting a little more money in their pockets.”
- The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance
“In the provinces where federal fuel charge proceeds are returned directly to households, eight out of ten families actually get more back through Climate Action Incentive rebates than they pay, meaning this system is helping with the cost of living for a majority of Canadian families. Pricing carbon pollution and returning proceeds to Canadian families is an effective and affordable way to combat climate change, while supporting the sustainability of Canadian communities.”
- The Honourable Steven Guilbeault, Minister of Environment and Climate Change
To protect Canadians from the dangers and costs presented by climate change, and to ensure that Canada continues to reduce its greenhouse gas emissions, the government introduced a price on carbon pollution across Canada in 2019.
The Government of Canada does not keep any direct proceeds from carbon pollution pricing.
CAI payments mean some 8 out of 10 families receive more money back than they pay in direct costs under this system, with families that earn less benefitting the most, on average.
The 2022-23 CAI payment amounts represent an increase relative to the 2021-22 CAI payment amounts specified last year and claimed through 2020 personal income tax returns.
Since 2016, the Government has committed more than $100 billion to climate action and environmental protection.