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 has also applied to residents of New Brunswick, 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:
- You have or had a spouse or common-law partner
- You have or had a child that you live(d) with
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 continue to file your tax returns every year, your eligibility will be assessed and if you qualify, you’ll automatically receive the quarterly CAI payments.
However, to claim the CAIP rural supplement (if you are eligible), you’ll need to tick the box on page 2 of your income tax and benefit return.
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 were made quarterly in April 2023, July 2023, October 2023 and January 2024.
The 2024-2025 amounts will be available in April 2024.
Check out the table below for the maximum amounts you could claim for CAI for 2023-2024:
| AB | MB | ON | SK | NL | NS | PEI | |
|---|---|---|---|---|---|---|---|
| First Adult | $193 | $132 | $122 | $170 | $164 | $124 | $120 |
| Second Adult | $96.50 | $66 | $61 | $85 | $82 | $62 | $60 |
| Each Child | $48.25 | $33 | $30.50 | $42.50 | $41 | $31 | $30 |
| Family | $386 | $264 | $244 | $340 | $328 | $248 | $240 |
Source: Canada.ca
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.
Fun Fact
Unlike most tax credits, the Climate Action Incentive won’t vary based on your personal or household income.
