When Canada’s climate income policy (Climate Action incentive Payment) was implemented in 2019 it became evident that householders did not equate the tax rebate with compensation for the rising price of fossil fuels. Political opponents could therefore argue that the policy was harming families, although despite this the policy has survived two elections. The government acknowledged that support for the policy would improve if it became more visible and has therefore implemented direct, quarterly payments.
The latest CCI newsletter reports that…..
On Friday, July 15th, 2022 Canadians living in Ontario, Manitoba, Saskatchewan, and Alberta—provinces where the federal pollution pricing system applies—will receive their first quarterly Climate Action Incentive payment. Thus, Canada becomes the first country in the world to issue direct payments back to citizens from the pollution fee levied on carbon based fuels .
Starting in 2019, oil, coal and natural gas distributors were charged a pollution fee of $10 per tonne of carbon dioxide equivalent (CO2e), rising by $10 per year to $170 per tonne CO2e in 2030. The carbon fee for this pollution pricing policy is revenue-neutral. Between 2019 and 2021 the revenue was recycled back to the citizens in their income taxes “climate action incentive“. Of note, 80% of households come out ahead, a finding confirmed by the Parliamentary Budget Office and Clean Prosperity.
This quarterly delivery, which replaces an annual credit from previous years, will ensure that Canadians receive payments on a more regular basis. The first payment will be a “double-up” payment that will return proceeds from the first two quarters of the 2022‒23 year (April–June, and July–September). Quarterly payments will follow in October 2022 and January 2023. Canadians can register for direct deposit to ensure that payment is fast, convenient and secure.
For the 2022‒23 fiscal year, 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 percent.
“A huge step — Canada may lead the world to understand that carbon fee and dividend is essential to solve the climate crisis.”
Director Climate Science, Awareness and Solutions Program
Columbia University Earth Institute