Canadian Manufacturing

Federal carbon tax rebates will exceed the cost for most people affected [UPDATED]

The Canadian Press

Cleantech Canada
Environment Regulation Cleantech

The PM says his new carbon tax rebate system puts a price on pollution without breaking the bank for families

The carbon tax is set to be a critical element for debate in the next federal election.

OTTAWA—The federal government will return 90 per cent of all the money it collects from a carbon price directly to the Canadians.

But it has pushed back the start date of its new carbon tax another four months to allow the affected provinces to prepare.

Prime Minister Justin Trudeau unveiled the details of the carbon tax rebates at a Toronto college on Tuesday, in an attempt to sell Canadians on the need to pay for pollution without breaking their pocketbooks.

“Starting next year, it will no longer be free to pollute anywhere in Canada,” Trudeau said at Humber College.


Ottawa required all provinces to put a minimum price on pollution of $20 a tonne of emissions by Jan. 1. Saskatchewan, Manitoba, Ontario and New Brunswick have not complied and will have a federal carbon levy on fuels as well as a cap-and-trade style of system for large industrial emitters imposed on them, starting April 1.

Residents in those provinces will start getting federal rebates on their next tax return to offset the extra costs they will pay for everything from gasoline and groceries to home heating and electricity.

British Columbia, Alberta, Quebec, Newfoundland, and the Northwest Territories all put a price on pollution high enough to meet federal standards and the revenues in those provinces are being handled by those provincial governments. Nunavut and the Yukon both chose to use the federal system and therefore they also will get to decide how to use the revenues.

Prince Edward Island asked to use just the big industrial emitters portion of the federal program, but will have its own carbon levy, so it too will get to distribute the revenues as it sees fit.

Ottawa anticipates collecting more than $2.3 billion in carbon taxes in those provinces and 90 per cent of that will go to household rebates. The payments vary because carbon taxes collected will be higher depending on how provinces power and heat homes.

The remaining 10 per cent will be handed out to small and medium-sized businesses, schools, hospitals and other organizations that can’t pass on their costs from the carbon tax directly to consumers. Details of that program are not yet available.

Rebates will be determined when Canadians file taxes, either added to the refund payment or deducted from tax owing. The amount will be based on the number of adults and children in a household.

People who live outside of census metropolitan areas will get 10 per cent more than those in cities to account for their increased energy use and lack of public transportation as an option to reduce their fuel consumption.

The average household payments will be $248 in New Brunswick, $300 in Ontario, $336 in Manitoba and $598 in Saskatchewan.

Trudeau said putting a price on pollution provides an incentive for people and businesses to find ways to reduce their emissions, but he doesn’t want to make life unaffordable for families. The rebates will ensure families don’t suffer and can further increase their savings if they do find ways to reduce their emissions.

Officials say 70 per cent of people in those provinces will get back more than they end up paying out as fuel costs rise to incorporate the carbon tax.

Every individual in those provinces regardless of income, will be eligible for a rebate.

The carbon tax is set to be a critical element for debate in the next federal election with the Conservatives promising to scrap it if they are elected and growing push back from premiers.

Conservative Leader Andrew Scheer said it is a lie to suggest most people will get a rebate bigger than what they have to pay in carbon tax.

“At the end of the day Canadians know that a measly $12.50 a month will not cover the true cost of this carbon tax,” he said. “Life is going to get a lot more expensive for hardworking Canadians families and large industrial polluters are getting off scot free.”

The Doug Ford government in Ontario, which cancelled a cap and trade system after the provincial election, says the Liberals are just trying to buy votes with rebates they will likely cancel as soon as the next election is over.

“This is a cynical ploy on the eve of an election,” said Ontario Environment Minister Rod Phillips. “The first cheque is going to arrive … in the summer before an election in the fall. Ontarians and Canadians aren’t going to believe that those cheques are going to keep coming.”

However, Trudeau believes Canadians will be on the side of pricing pollution to ensure emissions are cut and climate change is kept in check, noting they have seen the impacts from forest fires and floods to droughts and heat waves.

“Will we kick this can down the road yet again to be dealt with in another place or at another time or will we show some courage and do what needs to be done for this generation and the next,” he said.

Trudeau said Conservative politicians who want to criticize the carbon tax have to answer to Canadians.

Related: Federal carbon tax rebate a ‘vote buying scheme:’ Saskatchewan premier


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