In its commitment to protecting the environment and growing our economy, the government introduced the Climate Action Incentive (CAI).
The CAI is a benefit payable to eligible persons living in Alberta, Saskatchewan, Manitoba or Ontario, since these provinces charge their residents a federal carbon tax.
As of July 1, 2023, this federal fuel charge will also be applied to residents of Newfoundland and Labrador, Nova Scotia, and Prince Edward Island.
This tax is incorporated in the cost of gas and home heating bills with the goal of incentivizing people and businesses to be more environmentally friendly.
The CAI tax credit was created to help offset this cost.
Climate Action Incentive Eligibility
To be eligible for the Climate Action Incentive payment, you first need to be a resident of either Alberta, Saskatchewan, Manitoba, Ontario, Newfoundland and Labrador, Nova Scotia, or Prince Edward Island on the first day of the payment month and last day of the previous month.
In addition, you must be at least 19 years old to qualify, however there are some exceptions for those under the age of 19.
How Do I Claim the Climate Action Incentive?
As of July 2022, you no longer need to apply to claim the CAI.
As long as you’ve filed your 2022 tax return, your eligibility will be assessed and if you qualify, you’ll automatically receive the quarterly CAI payments.
Climate Action Incentive Payment Amounts
The payment amounts for the CAI vary depending on which province you live in, whether you have a spouse or common-law partner, and whether you have any dependents.
Payments will be made quarterly in April 2023, July 2023, October 2023 and January 2024.
Residents of Newfoundland and Labrador, Nova Scotia, and Prince Edward Island won’t get the April 2023 payment, because they won’t be charged the federal fuel tax until July 2023.
Check out the table below for the maximum amounts you can claim for CAI.
If you live in a rural community or small town, you could be eligible for an extra 10% on top of these amounts.
For this, you would have had to be living outside of a census metropolitan area (CMA) on December 31, 2022.
To find out if you qualify for this additional 10%, see details here.
Unlike most tax credits, the Climate Action Incentive won’t vary based on your personal or household income.
Frequently Asked Questions
- Does everyone qualify for the Climate Action incentive?
No. You first need to be a resident of either Alberta, Saskatchewan, Manitoba, Ontario, Newfoundland and Labrador, Nova Scotia, or Prince Edward Island. You must also be at least 19 years old in most cases and meet a few additional basic requirements.
- Does it matter who claims the climate action incentive?
No, as long as the person is eligible. As of July 2022, you no longer need to apply to claim the CAI. Once you file your tax return, your eligibility will automatically be assessed and if you qualify, you’ll begin to receive the quarterly CAI payments.