What is the climate action incentive payment (CAIP)? Here’s how it affects your taxes.

April 4, 2022

As part of the Government of Canada’s climate change plan, residents of Alberta, Ontario, Manitoba and Saskatchewan can receive the climate action incentive payment (CAIP) – an effort to protect the environment while making the shift to sustainable actions more affordable.

These provinces have a federal carbon tax – it’s called a “fuel charge.” Rather than being sent to you as a separate bill, the fuel charge is added directly to the cost of your gas when you fill up at the pumps and to your home heating bills. The fuel charge gives us the incentive to make cleaner choices and encourages businesses to find clean solutions – which benefits us all as it protects the environment and helps grow the economy. The goal of the CAIP is to offset the cost of the fuel charge and put some money back in your pocket.

Is the climate action incentive payment (CAIP) the same as the climate action incentive (CAI) rebate?

The climate action incentive (CAI) rebate is now the climate action incentive payment (CAIP).

The CAIP can’t be claimed as a refundable tax credit starting in tax year 2021. Instead, you’ll receive tax-free payments in April, July, October, and January. You’ll receive your first payment in July 2022, which will include the CAIP amount you’re owed from April 2022. The next payments will be in October and January 2023.

How do I get the CAIP?

If you’re a resident of Ontario, Manitoba, Alberta, or Saskatchewan, you’ll receive the CAIP automatically as long as you file a tax return.

The only additional step required would be for those who live in small or rural communities to check the box on Schedule 14 to indicate that you are eligible for the additional 10% supplement.

I don’t live in Manitoba, Ontario, Saskatchewan or Alberta, why don’t I get this tax credit?

Residents of other provinces won’t be charged the fuel charge and so they won’t be eligible for the CAIP. This is because they either already have a provincial carbon tax or their provincial governments are working on a carbon pollution pricing system that meets the federal standard.

How much can I expect to get back when I file?

Your CAIP amount will depend on the province you live in, your marital status, and the number of children in your family. Because your eligibility depends on your family situation at the beginning of the month you receive a payment (April, July, October or January) instead of the end of the tax year (December 31), you’ll need to let the CRA know if your situation changes. This includes any of the following situations:

  • You and your spouse or common-law partner separate
  • You move from an eligible province (Alberta, Saskatchewan, Manitoba, or Ontario) to an ineligible province
  • Your dependant (who is younger than 19) no longer lives with you

The average family of four will receive an incentive of $1,101 in Saskatchewan, $832 in Manitoba, $745 in Ontario, and $1079 in Alberta. People who live in rural areas will get 10% more than those in cities to account for the fact that they likely use more energy and they don’t have as many public transportation options to reduce their fuel consumption.

Here’s a provincial breakdown based on household size and tax year:

Ontario

201920202021 (paid in 2022)
First Adult$224$300$373
Spouse$112$150$186
Child$56$75$93
Family of 4$448$600$745

Manitoba

201920202021 (paid in 2022)
First Adult$243$360$416
Spouse$121$180$208
Child$61$90$104
Family of 4$486$720

$832

Saskatchewan

201920202021 (paid in 2022)
First Adult$405$500$550
Spouse$202$250$275
Child$101$125$138
Family of 4$809$1000$1101

Alberta

201920202021 (paid in 2022)
First Adult$444$490$539
Spouse$222$245$270
Child$111$123$135
Family of 4$888$981$1079

After I pay the fuel charge and get the CAIP, how much money am I left with?

The government estimates that most families will continue to get more money back than they pay. According to the Department of Finance Canada, here’s what the average household might be left with after paying the fuel charge and getting the CAIP:

Ontario$134
Manitoba$229
Saskatchewan$319

Alberta

$338


If you have any questions about the climate action incentive payments (CAIP), H&R Block Tax Experts are here to help. Find an office near you to book an appointment today, or chat with a Tax Expert by booking an Expert Review for your return.


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