The first installment of the federal government’s climate action stimulus payment landed in Canadian bank accounts today — but only for residents of Alberta, Saskatchewan, Manitoba and Ontario.
The program aims to offset some costs imposed by Ottawa’s carbon tax system, which puts a price on emissions, including those generated by the use of gasoline and natural gas.
The payments are only available to residents of provinces without pollution pricing systems that meet the new federal standard.
In all other provinces and territories, revenue generated by carbon taxes is returned to provincial and territorial governments, not directly to residents.
Ottawa says it “does not retain any direct revenue from pollution pricing,” which is seen as a strategy to penalize industries that produce carbon emissions and to encourage adaptations and innovations that reduce pollution.
How much will you get this year?
The climate stimulus payment will be paid out in quarterly installments for the first time this year. In previous years, the payment was delivered as a component of tax returns.
Here’s how much a family of four will get in total this year:
- $1,079 in Alberta.
- $1,101 in Saskatchewan.
- $832 in Manitoba.
- $745 in Ontario.
Residents of small and rural settlements will receive an additional 10 percent on top of these amounts.
You can see a more detailed breakdown of payments on the government’s website.
Today’s payment will be the largest single installment since it covers the first two quarters of the fiscal year (April-June and July-September). Subsequent deposits in October and January will be half of what you received today.
“I know things are challenging right now with the cost of living going up, fuel prices, food prices, so every little bit helps,” Prime Minister Justin Trudeau said during a photo shoot Friday afternoon with an Ottawa family to discuss the discount.
“That’s one of the reasons we’re moving it to quarterly payments.”
How much does the plan cost Canadians?
While the true financial cost of the carbon tax depends on an individual’s fossil fuel use, the federal government says “most households will receive more than they pay as a result of the federal carbon pricing system.”
At a new rate of $50 per tonne of emissions, this year’s carbon tax increase amounts to a jump of 2.21 cents per liter of petrol and 2.68 cents per liter of diesel.
Ottawa plans to increase the carbon tax to $170 per tonne by 2030.
However, a recent report by the Parliamentary Budget Office (PBO), Canada’s fiscal watchdog, concluded that for most households — especially those on high incomes — the federal carbon price represents a “net loss.” The PBO considered the cost of the levy itself, the GST that consumers would have to pay on it, and its impact on employment and investment income.
“When the economic impacts are included,” said Yves Giroux, the parliamentary budget officer, “most are worse off.”
The PBO report does not attempt to calculate the long-term costs of inaction on climate change, such as the prospect of more frequent bouts of extreme weather, destructive storms and droughts.
Alberta, Saskatchewan and Ontario launched a legal challenge to Ottawa’s carbon tax system, which the provinces called unconstitutional. The Supreme Court ultimately upheld the tax in a ruling last year.
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