Heads up! Your carbon tax rebate has been pushed back to July

The federal carbon tax just increased to $50 a tonne on Friday and Alberta is among the few provinces where residents are eligible to get that back in a rebate.

That’s now worth about $1,200 for a family of four, but there are changes to how that rebate will be paid out.

In years past, the rebate simply offset income taxes owed in April. This year, residents will have to wait until summer to see the cash.

The first instalment is due to appear in people’s mailboxes or bank accounts in July.

Rebate automatic

The rebate, called the Climate Action Incentive Payment, is only available to residents of Alberta, Saskatchewan, Manitoba and Ontario. Those provinces didn’t voluntarily adopted a provincial carbon tax meeting federal requirements. As a result, a federal carbon tax was imposed on them.

Julia Nicholls is the empowerment manager with Rise Calgary. (Submitted by Rise Calgary)

It’s been a sore spot for Alberta Premier Jason Kenney, who called on the federal government to halt the increase last week. He says Albertans are already suffering enough with inflation, which is at a 30-year high.

CBC Calgary has been tracking the impact of rising energy prices by inviting community members to text their experience and questions

Many expressed frustration with the rising fees, including the carbon tax, which appears as a line item on the natural gas portion of many utility bills. It also gets charged at the gas pump. Several people asked if this tax gets refunded.

The refund is automatic, as long as Albertans file their taxes.

You’re eligible if you are 19 or older, have a child who lives with you and/or have a spouse.

Payments now quarterly

Julia Nicholls, a manager in charge of tax clinics at Rise Calgary (formerly Sunrise), says the new payment structure is something many Albertans need to be aware of, especially if they were counting on that refund to help pay down the bills.

They were counselling people to plan for it to pay off debt by putting it in a savings account. 

“Previously, we were expecting a large lump sum,” she said. “Because that money is spread out, that can definitely have an impact on somebody’s debt repayment plan, perhaps bills, utilities and general savings as well.”

The payment is now divided in four. Albertans receive a double rebate in July, then single payments in October, January and April. That last payment will take into account the increase in 2023 to $65 a tonne.

“These rebates are structured to essentially prepay to compensate families for the expected cost increases associated with carbon pricing,” said Jennifer Winter, an associate professor of economics at the University of Calgary.

$1,200 for Alberta family of 4

The actual amount of the rebate depends on the province, but in Alberta a single person is expected to receive $300 over the course of the year, and a family of four is expected to get $1,200.

Winter says the change in the federal tax is a three-cent-per-litre increase on the price of gasoline. But Albertans are unlikely to notice that because simultaneously on April 1, the provincial government paused the gas tax. That’s a decrease of 13 cents a litre until at least June 30.

Illustrative Climate Action Incentive payment amounts for 2021 and 2022. (CRA)

“But we’re not actually going to see that change in any real effect because all we see is the price of gasoline, which encapsulates the wholesale cost, the retail cost, the federal gas tax, the federal carbon tax and GST,” she said.

‘Reactive measures’

Earlier this month the government said it would also provide $150 electricity rebates to help Alberta families, farms and small businesses with high electricity bills.

The floating electricity rate more than doubled over the winter and is expected to rise again this summer.

But Winter says changes like Alberta’s gas tax holiday and the carbon tax rebate are not the best way to address affordability concerns.

“Even this utility bill rebate, if you are someone who has your electricity or or natural gas included in your rent, that means that your landlord is benefiting from that rebate, not yourself,” she said.

“These are reactive measures that are not well designed to address the fundamental concern of affordability and cost of living and energy price increases.”

Rebate and benefit tool

Nicholls also recommends a new tool from Prosper Canada called the Benefits Wayfinder, which can help people find all the rebates and benefits they qualify for.

“It’s a very user-friendly tool where individuals and families can understand what is that benefit credit or rebate, as well as how do I apply, what is the eligibility and what exactly do I need to gather to move forward with this,” said Nicholls.


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