One of the biggest problems currently facing our planet and society is climate change. Reversing global warming is a top priority for Canadians due to the alarming rate at which rising global temperatures and rising greenhouse gas concentrations are altering the climate. The Canada Climate Action Incentive Program was launched by the Canadian government as a means of encouraging both people and businesses to cut their emissions to address this catastrophe.
By installing energy-efficient appliances, switching to renewable energy sources like wind or solar power, or using public transportation whenever possible, qualifying participants can get incentives under this program. In this article, we’ll learn more about the Canada Climate Action Incentive and how you may benefit from this significant program.
What Is The Climate Action Incentive Payment? Or CAIP
Climate Action Incentive Payment or CAIP is a tax-free amount paid to help individuals and families offset the cost of federal pollution pricing. It is available to residents of Alberta, Saskatchewan, Manitoba, and Ontario. It consists of a basic amount and a supplement for residents of small and rural communities.
The Government of Canada has changed the payment method for the CAIP from a refundable credit claimed annually on personal income tax returns to quarterly tax-free payments made through the benefits system starting in July 2022.
Who Is Eligible For The Climate Action Incentive Payment?
To be eligible, you must be a resident of Alberta, Saskatchewan, Manitoba, or Ontario on the first day of the payment month and the last day of the previous month. You must also meet at least one of these conditions during the same period:
- You are 19 years of age or older
- You have (or previously had) a spouse or common-law partner
- You are (or previously were) a parent and live (or previously lived) with your child
Who Is Not Eligible for the Climate Action Incentive Payment?
If you are NOT a resident of Ontario, Alberta, Saskatchewan, or Manitoba, you are not eligible for the CAIP. However, other provinces have carbon tax rebates (discussed below).
As with any other Canadian tax credits, you will also not be eligible if you:
- Were a non-resident of Canada at any time during the tax year
- Confined to a prison or similar institution for at least 90 days during the tax year
- Are exempt due to being a servant or officer for the government
Climate Action Incentive Payment Dates in 2022
Climate Action Incentive Payments will be paid every quarter, starting in July 2022, with a “double-up” payment to return amounts from the first two quarters of the 2022-2023 fuel charge year.
You will receive a double payment on the 15th of July 2022. After that, you will receive single payments on:
October 15, 2022, and January 15, 2023
How Much Climate Action Incentive Payment (CAIP) Will You Get in 2022?
The Climate Action Incentive Payments increase slightly each year but are not relative to your income.
Below is a breakdown of how much you can receive in total for the 2022-2023 payment period depending on which province you live in.
Climate Action Incentive Payments in Alberta
|
Year |
2020 |
2021 |
2022 |
|
First Adult |
$444 |
$486 |
$539 |
|
Spouse/Common-law Partner |
$222 |
$248 |
$270 |
|
Dependent Child |
$111 |
$124 |
$135 |
|
Family of four |
$888 |
$992 |
$1,079 |
Climate Action Incentive Payments in Ontario
|
Year |
2020 |
2021 |
2022 |
|
First Adult |
$226 |
$295 |
$373 |
|
Spouse/Common-law Partner |
$113 |
$147 |
$186 |
|
Dependent Child |
$56 |
$73 |
$93 |
|
Family of four |
$451 |
$588 |
$745 |
Climate Action Incentive Payments in Manitoba
|
Year |
2020 |
2021 |
2022 |
|
First Adult |
$250 |
$328 |
$416 |
|
Spouse/Common-law Partner |
$125 |
$164 |
$208 |
|
Dependent Child |
$62 |
$81 |
$104 |
|
Family of four |
$499 |
$654 |
$832 |
Climate Action Incentive Payments in Saskatchewan
|
Year |
2020 |
2021 |
2022 |
|
First Adult |
$452 |
$596 |
$550 |
|
Spouse/Common-law Partner |
$255 |
$297 |
$275 |
|
Dependent Child |
$113 |
$148 |
$138 |
|
Family of four |
$903 |
$1,189 |
$1,101 |
How to Apply for the Climate Action Incentive Payment (CAIP)?
Residents of Canada:
You do not need to apply for the CAIP. If you are eligible when you file your income tax and benefit return, the Canada Revenue Agency will send the payments throughout the year.
If you have a common-law partner or spouse, only one person will be eligible for the Climate Action Incentive Payments. This credit will be sent to the person whose tax return is submitted first.
If you are a resident of a rural or small community, you may be eligible for a supplement. To apply, you must complete Schedule 14 and send it with your income tax return. To see if you are eligible for the supplement, check here.
If you have not registered your child for the Canada child benefit, go to Canada child benefit – How to apply.
If you and your ex-spouse share custody of your child/children, if entitled, you will receive payments equal to 50% of the amount you would have received if the child resided with you full-time.
Newcomers to Canada:
If you are new to Canada, you will need to fill out one of two forms to apply for the CAIP:
- For those who do NOT have children: Form RC151, GST/HST, and CAI Credit Application for Individuals Who Become Residents of Canada.
- For those who DO have children: Form RC66, Canada Child Benefits Application to apply for all family and child benefits. You must also fill out Form RC66SCH, Status in Canada, and Income Information for the Canada Child Benefits Application.
After the forms are complete, mail them to your tax center.
Carbon Tax Rebates in Canada (Federal vs Provincial)
Each province in Canada has chosen either the federal pricing system or designed its pricing system for carbon tax rebates.
Below is a summary of the carbon tax rebate system for each province that does not participate in the CAIP.
- British Columbia’s emissions are covered by the carbon tax for the province. BC has an annual climate action tax credit (BCCATC), a tax-free payment to families and individuals with low income to help counteract the carbon taxes they pay.
- Quebec & Nova Scotia have a cap-and-trade system where they set caps on emissions by industry. Companies that cannot reduce emissions below that cap must buy credits from a carbon market. There is no federal rebate.
- New Brunswick has a system to allow for higher pollution thresholds while maintaining their price per tonne standards. They get CAI payments.
- E.I. has its own carbon tax on most gaseous and liquid fuels. There is no rebate in the province yet, but they intend to create their own rebate program in the near future.
- Newfoundland & Labrador – has a similar approach to P.E.I. where they reduced their gas tax to offset higher gas prices.
- Northwest Territories has its own territorial carbon tax, implemented in 2019. They charge $40 per tonne and have a 100% rebate on home heating fuel.
- Yukon and Nunavut are a part of the federal carbon tax plan. Yukon has rebates while Nunavut does not.
CAIP FAQs
Do I get the CAIP if I don’t live in Manitoba, Ontario, Saskatchewan, or Alberta?
No, you are not eligible for the CAIP if you do not live in one of those four provinces. However, your province may have a tax rebate – view above for details.
What is the CAIP supplement for people living in small and rural communities?
The CAIP includes a 10% supplement for residents of rural and small communities. This applies to those living in one of the four eligible provinces whose residence is outside a census metropolitan area.
How much is the climate action incentive in 2022?
The CAIP in 2022 will vary by province depending on if you are a single person, a second adult, a dependent child, or a family of four. See above for the Climate Action Incentive Payments tables.
What are the payment dates for the climate action incentive in 2022?
You will receive the Climate Action Incentive payments on the 15th of July 2022, October 15, 2022, and January 15, 2023. The first payment in July will be a double payment, and the two followings are single payments.
Who should claim the CAIP on their tax return?
If you are a resident of Alberta, Ontario, Manitoba, or Saskatchewan, you should claim the CAIP on your tax return. All you need to do is fill out Schedule 14, which is part of your tax return. The CRA will automatically determine if you are eligible.
How is the climate action incentive paid?
The Climate Action Incentive is paid directly to your bank as a quarterly benefit.
Final Words
The CAIP is a significant measure that will reduce household costs, introduce new opportunities for businesses, create jobs, and ultimately lead to better air quality and health.
Prior to July, the government distributed CAIP as a refundable credit that was claimed annually, but it has since switched to quarterly installments. On July 15, the first payment was sent to Ontarians, and it included a retroactive sum for April 2022.
The Canada Greenhouse Gas Pollution Pricing Act requires that coal-fired power plants in Ontario, Quebec, and New Brunswick be retired by 2032. Provinces have been tasked by the federal government to reduce their greenhouse gas emissions substantially from business-as-usual levels.