The federal carbon tax and its associated rebates rise today as the national price on carbon emissions increases from $65 per tonne to $80.
While the national carbon price applies across the country, not everyone pays the federal carbon tax and receives money back.
Carbon pricing works differently in Quebec, the three territories and British Columbia — residents don’t receive federal rebates. The remaining provinces are subject to the federal government’s carbon tax or fuel levy, and families or residents receive rebates from Ottawa.
Canada also has a mix of federal, provincial and territorial carbon pricing systems for industrial emitters.
Starting today, the federal carbon tax increase will cost drivers an extra 3.3 cents per litre at the pump. Since Ottawa’s fuel levy was introduced in 2019, the carbon tax has added 17.6 cents to the cost of a litre of gasoline. The levies for other fuels can be found online.
The rebates — recently rebranded as the Canadian Carbon Rebate — also have increased along with the carbon price, says Finance Canada. To receive the rebate, you need to file an income tax return. The rebate arrives through direct deposit in your bank account or through a cheque in the mail.
The payments come every three months; the next one is scheduled to arrive as early as April 15.
Here are the amounts a single adult person can expect to receive quarterly:
- $225 in Alberta.
- $150 in Manitoba.
- $140 in Ontario.
- $188 in Saskatchewan.
- $95 in New Brunswick.
- $103 in Nova Scotia.
- $110 in Prince Edward Island.
- $149 in Newfoundland and Labrador.
Here are the amounts a family of four can expect to receive quarterly:
- $450 in Alberta.
- $300 in Manitoba.
- $280 in Ontario.
- $376 in Saskatchewan.
- $190 in New Brunswick.
- $206 in Nova Scotia.
- $220 in Prince Edward Island.
- $298 in Newfoundland and Labrador.
Rural residents get a 10 per cent top-up on their rebates because they tend to drive more and consume more fuel. That rural top-up will double once a bill now before Parliament becomes law.
Nova Scotia, P.E.I, and Newfoundland and Labrador, however, will see their rebates decrease after Ottawa exempted home heating oil from the carbon tax. In October, Prime Minister Justin Trudeau announced the government will pause for three years the carbon pricing scheme on home heating oil in the provinces and territories where the carbon levy applies.
While New Brunswick is not seeing a drop in rebate amounts, other Atlantic provinces are because Ottawa is collecting less money from these provinces that tend to be more reliant on furnace oil than other parts of the country.
All the money that’s directly collected by the federal carbon pricing system, the federal government said, is returned to the province or territory where it’s collected. About 90 per of the federal carbon tax goes towards rebates. The remainder goes to Indigenous communities, farmers and businesses.
National carbon pricing, a core federal Liberal climate policy, faces mounting opposition. Before Monday’s rise, the opposition Conservatives and at least seven premiers called on the government to halt the increase. Conservative Leader Pierre Poilievre says if he forms government he will “axe the tax,” because of the financial hardship the rising carbon price places on families and businesses.
It’s unclear if a future federal Conservative government would also get rid of carbon pricing for industrial emitters. Poilievre has not detailed how his proposal to use “technology not taxes” would ensure Canada achieves its emissions reduction targets.
The federal government says eight out of 10 families receive more in rebates than they pay under the carbon tax. The total amounts also can be found online.
A fiscal analysis by the independent parliamentary budget officer backs Ottawa’s claim. The budget watchdog’s often-cited report found wealthy families will lose money when the carbon price reaches its highest level in 2030-31 at $170 per tonne. Lower and middle-income families will make money from the rebates, said the Parliamentary Budget Officer (PBO).
With Canada’s carbon tax set to increase again on April 1, many Canadians have been asking questions about how it works and what the increase will cost. CBC’s David Thurton breaks down the policy, the price and the rebates.
The PBO also concluded in a separate economic analysis that at $170 per tonne, the federal carbon tax will cut jobs and profits in the transport and oil and gas sectors. This means workers in the oilpatch could lose their jobs and Canadians who hold shares in oil companies like Suncor or Cenovus could see lower investment returns.
“When both fiscal and economic impacts of the federal fuel charge are considered, we estimate that most households will see a net loss,” said the Parliamentary Budget Officer Yves Giroux. “Based on our analysis, most households will pay more in fuel charges and GST—as well as receiving slightly lower incomes—than they will receive in (rebates).”
Are emissions falling because of the carbon tax?
After several years of the national carbon price. Environment and Climate Change Canada said its modelling shows Canada’s emissions would have been higher without carbon pricing.
The federal department said that in the latest year for emissions data (2021), emissions “would have been approximately 18 megatonnes higher in the absence of Canada’s carbon pricing plan.” That figure is almost equivalent to the annual emissions of Manitoba.
“Changing the energy system in an economy is a lot like sort of steering a cargo ship. It does take time,” said Sara Hastings-Simon, an associate professor at the University of Calgary’s faculty of science who studies carbon pricing and energy transitions.
“So we are just starting to see those, the results of those efforts and that … if we can continue on that path, if we continue to have the suite of climate policies that we have in place, we will continue to see those emissions starting to fall from where they would have been and actually fall in an absolute sense.”
The federal government has said that the price on carbon, including consumer and industrial carbon pricing, is expected to account for roughly one-third of Canada’s emissions reductions.
Independent analysis from the Canadian Climate Institute, released in March, shows that the current suite of federal government climate policies is set to significantly reduce Canada’s emissions.
The report found that carbon pricing — both the consumer and industrial versions — is projected to reduce emissions by as much as 50 per cent by 2030.
The report shows the pricing policy for large emitters accounts for most of the projected emissions cuts — driving three times the emissions reductions attributed to the consumer carbon price.
The parliamentary budget officer looked into the impact carbon pricing has on Canadian households. Both the Liberals and the Conservatives have been using his findings to their advantage. Parliamentary Budget Officer Yves Giroux joined Power & Politics to clarify.
The institute’s report says industrial carbon pricing is projected to contribute “between 23 and 39 per cent (or 53 to 90 megatonnes) of avoided emissions from all policies implemented to date.”
The report says the consumer carbon price accounts for between 8 and 9 per cent (or 19 to 22 megatonnes) of projected emissions reductions.
The Canadian Climate Institute conducts climate change policy research. It describes itself as a non-partisan and independent institute that receives financial support from Environment and Climate Change Canada and other private donors including the Ivey Foundation, Scotiabank and Loblaws.