$500 Increase in Climate Action Incentive: Who will get an Increased Carbon Tax Rebate in March

Amidst a growing concern for climate change and the pressing need for green solutions, the Canadian Government has announced a $500 increase in the Climate Action Incentive. This initiative forms part of several environmentally-centric proposals meant to encourage citizens and businesses to operate in an ecologically conscious manner.

The Climate Action Incentive, also known as the carbon tax rebate, is a tax relief measure that ensures that carbon pricing is not a financial burden for families. The announcement for a higher rebate is a significant development as it highlights the government’s commitment to giving back the revenue from carbon pollution pricing directly to the people.

Who will Benefit from the Increased Carbon Tax Rebate?

Essentially, the increased carbon tax rebate will be granted to those who are expected to spend more due to the costs of the carbon tax. This is to ensure that these individuals and families are not unfairly disadvantaged. The rebate works in conjunction with other measures like the tax credit for people with low and middle-class incomes.

The beneficiaries of this increase are residents of provinces that have not committed to the federal carbon pollution pricing system which consists of Saskatchewan, Manitoba, Ontario, and Alberta. These provinces have been identified due to their higher carbon emission levels.

The carbon tax rebate amounts per household will vary from province to province based on a per-person amount and a supplement for people living in small and rural communities. Ontario’s average Climate Action Incentive is expected to be around $600 per household, rising to $1000 in 2023.

How Much will the Increase Be?

Currently, the rebate amounts are $448 for a single adult or the first adult in a couple. Each second adult in a couple, or the first child of a single parent, can claim $224. For each child under 18, the rebate is $112. The new baseline will increase these rebates by $500, making a noticeable difference for Canadian families.

The increased carbon tax rebate will become effective from March and will be administered through the 2022 tax returns filed in 2023. It is essential to note that the complete rebate increase will not be delivered at once, it will be spread out over two years.

How to apply for the carbon tax rebate

To apply for the Carbon Tax Rebate, also known as the Climate Action Incentive Payment (CAIP), eligible Canadian residents need to follow specific steps outlined by the Canada Revenue Agency (CRA). Here is how you can apply for the rebate:

For Residents of Canada:

  1. Filing Taxes: Residents of Canada do not need to apply separately for the CAIP. They must ensure to file their income tax and benefit return on time.
  2. Automatic Payments: Once taxes are filed, the CRA will automatically send the payments to eligible individuals. If you have a spouse or common-law partner, only one of you will receive the payment for the family.
  3. Continued Eligibility: To continue receiving the CAIP, individuals must file an income tax and benefit return every year, even if they have no income to report.

For Newcomers to Canada:

  1. Application Process: New residents of Canada need to complete specific forms to apply for the CAIP.
    • If you have children, fill out and sign Form RC66, Canada Child Benefits Application.
    • Complete Form RC66SCH, Status in Canada and Income Information for the Canada Child Benefits Application.
  2. Submission: Mail the completed forms to your tax center as instructed.

Claiming the Rural Supplement:

  • Residents of small and rural communities can claim a supplement included in the CAIP by ticking the box on page 2 of their income tax and benefit return.
  • The supplement is already included in the basic amount for Prince Edward Island residents.
  • For residents of New Brunswick, the 2022 rural supplement question will be on the 2023 income tax and benefit return, with retroactive payments for the 2022 base year.

By following these steps and meeting the eligibility criteria outlined by the CRA, eligible Canadians can receive the Carbon Tax Rebate to help offset the costs related to federal pollution pricing.

What is the amount of the carbon tax rebate?

The amount of the Carbon Tax Rebate, now rebranded as the Canada Carbon Rebate, varies depending on the province and household size. Canadian families can receive between $760 and $2,160 in carbon tax rebates this year, with rebates set by province based on total fossil fuel use in each jurisdiction. Rural residents receive 20% more in acknowledgment of longer driving distances, up from the previous 10% increase.

The rebate amounts are structured to offset the increased carbon pricing, with most families expected to see a larger rebate due to the scheduled price hike. The specific amount individuals receive will depend on their province of residence and the number of adults and children in their household.

What is the purpose of the carbon tax rebate?

The purpose of the Carbon Tax Rebate, now known as the Canada Carbon Rebate, is to combat greenhouse gas emissions and encourage individuals and businesses to reduce their carbon footprint. This rebate is part of the Canadian government’s efforts to address climate change by pricing carbon dioxide and other greenhouse gas emissions.

Through the Greenhouse Gas Pollution Pricing Act, the government imposes a tax on fossil fuels and other sources of greenhouse gas emissions, aiming to incentivize the transition to cleaner and more sustainable practices. The revenue generated from the carbon tax supports initiatives to reduce greenhouse gas emissions and facilitates the transition to a greener economy. Additionally, the rebate program aims to offset the costs associated with federal pollution pricing, providing financial assistance to eligible Canadian residents to help them cope with the impacts of carbon pricing and contribute to a more sustainable future.


The decision to increase the climate action incentive reveals the government’s strategy to combine economic progression with environmental sustainability. This move sets a precedent for governments worldwide to engage practical yet eco-responsible practices that can encourage individuals and corporations towards climate-friendly living and operations.

The Climate Action Incentive is an initiative that acknowledges the costs that people will need to bear due to carbon pricing. By directly compensating people who suffer from a financial burden, the initiative ensures equitable financial relief that rewards environmentally-friendly practices.


1. What is the Climate Action Incentive?

The Climate Action Incentive is a tax rebate program that returns the revenue generated from carbon pollution pricing back to the people. It aims to mitigate the financial burden caused by the carbon tax.

2. Who is eligible for the increased Carbon Tax Rebate?

The increased rebate is primarily given to the residents of Saskatchewan, Manitoba, Ontario, and Alberta. These provinces do not adhere to the federal carbon pollution pricing system and hence have higher carbon emission rates.

3. When will the increased rebate become effective?

The increased rebate will become effective from March, and it will be delivered through the 2022 tax returns filed in 2023.

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