Ensuring carbon pollution pricing helps make life more affordable
Ottawa – A price on pollution is widely recognized as the most efficient means to reduce the greenhouse gas emissions that are contributing to the more intense wildfires, droughts, and floods caused by climate change. Canada’s approach to pollution pricing is also designed to put money back into people’s pockets.
Putting a price on pollution is a cornerstone of Canada’s plan, which is working to tackle climate change.
Quarterly Canada Carbon Rebate for individuals—increased rural top-up
The climate crisis is affecting all of Canada, but especially rural and small communities. They frequently face environmental, social, economic, cultural, and health impacts from climate change that are more intense than those in urban areas. Despite these challenges, these communities show remarkable resilience and often lead the way in adaptation efforts across Canada.
Canadians living in rural and small communities are on the front lines of climate change, witnessing firsthand the devastating impacts of intensified wildfires, droughts, and floods. A price on pollution is found to be one of the most efficient ways that Canada is reducing greenhouse gas emissions, which contribute significantly to the frequency and severity of these impacts caused by climate change. The Canada Carbon Rebate both puts money back into people’s pockets and also stimulates investment in clean alternatives.
In provinces where the federal fuel charge applies, most households get back more than they pay through the Canada Carbon Rebate for individuals, as a result of the federal carbon pollution pricing system, with lower- and middle-income households benefitting the most.
To further recognize rural Canadians’ higher energy needs, particularly for home-heating and transportation, the Government of Canada has doubled the rural top-up available for households in rural areas and smaller communities from 10 percent to 20 percent of their Canada Carbon Rebate base amount, as of April 2024.
This October, eligible Canadians will receive the enhanced rural top-up for the first time. The increase will be retroactive to April 1, 2024, so those households can expect an increased top-up amount for October 2024 with a one-time boost due to the increased top-up amounts for April and July.
The top-up will apply to residents of provinces where the federal fuel charge applies, that is, Alberta, Saskatchewan, Manitoba, Ontario, Newfoundland and Labrador, New Brunswick, and Nova Scotia whose primary residence is outside a Census Metropolitan Area, as defined by Statistics Canada. All rebate recipients in Prince Edward Island are eligible for the rural top-up, and it is included in their base amount. Determine if you qualify for the rural top-up.
The table below shows the amount a family of four can expect to receive each quarter in 2024–2025. As all proceeds are returned in the province they were collected in, the rebate amount varies between provinces. It is higher in provinces with more consumption of fossil fuels.
| Province | Family of four | Rural |
|---|---|---|
| Alberta | $450.00 | $540.00 |
| Manitoba | $300.00 | $360.00 |
| Ontario | $280.00 | $336.00 |
| Saskatchewan | $376.00 | $451.20 |
| New Brunswick | $190.00 | $228.00 |
| Nova Scotia | $206.00 | $247.20 |
| Prince Edward Island* | $220.00 | $220.00 |
| Newfoundland and Labrador | $298.00 | $357.60 |
*As all residents of Prince Edward Island are eligible for the 20 percent rural top-up, it is reflected in the base amount for that province.
| Province | Family of four | Rural |
|---|---|---|
| Alberta | $1,800.00 | $2,160.00 |
| Manitoba | $1,200.00 | $1,440.00 |
| Ontario | $1,120.00 | $1,344.00 |
| Saskatchewan | $1,504.00 | $1,804.80 |
| New Brunswick | $760.00 | $912.00 |
| Nova Scotia | $824.00 | $988.80 |
| Prince Edward Island* | $880.00 | $880.00 |
| Newfoundland and Labrador | $1,192.00 | $1,430.40 |
*As all residents of Prince Edward Island are eligible for the 20 percent rural top-up, it is reflected in the base amount for that province.
Canada Carbon Rebate for Small Businesses
Canada’s small- and medium-sized businesses are the backbone of the Canadian economy and the heart of our communities. Across the country, they keep main streets flourishing, create good jobs, and deliver on the dream of entrepreneurship. Through the new Canada Carbon Rebate for Small Businesses, the Government of Canada is delivering on its commitment to return proceeds from the price on pollution directly to small- and medium-sized businesses with employees in the provinces where the federal fuel charge applies.
This accelerated and automated return process will deliver over $2.5 billion directly to an estimated 600,000 small- and medium-sized businesses with employees in provinces where the pollution pricing system applies through a refundable tax credit. By receiving direct payments from the Canada Revenue Agency, separate from tax refunds, this simple process for returning fuel charge proceeds will help eligible small- and medium-sized businesses to focus on what matters most—driving their businesses forward.
The Canada Revenue Agency plans to issue the rebate to eligible Canadian-controlled private corporations (CCPCs) that filed their 2023 tax return no later than July 15, 2024, by the end of the calendar year. Most businesses should receive their payment by:
- December 16, 2024, if registered for direct deposit
- December 31, 2024, if receiving payment by cheque
On October 1, 2024, the Government of Canada specified payment rates, on a per employee basis, for the 2019–2020 to 2023–2024 fuel charge years, and the designated provinces in which these payment rates will apply.
| – | 2019 to 2020 | 2020 to 2021 | 2021 to 2022 | 2022 to 2023 | 2023 to 2024 |
|---|---|---|---|---|---|
| Alberta* | n/a | $147 | $123 | $140 | $181 |
| Saskatchewan | $110 | $271 | $244 | $298 | $233 |
| Manitoba | $48 | $99 | $77 | $89 | $168 |
| Ontario | $26 | $68 | $75 | $86 | $146 |
| New Brunswick* | n/a | n/a | n/a | n/a | $87 |
| Nova Scotia* | n/a | n/a | n/a | n/a | $119 |
| Prince Edward Island* | n/a | n/a | n/a | n/a | $82 |
| Newfoundland and Labrador* | n/a | n/a | n/a | n/a | $179 |
*As the federal fuel charge only came into effect as of January 1, 2020, in Alberta, and as of July 1, 2023, in New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador, small businesses in these provinces will receive payments for proceeds collected as of those respective dates.
| – | 10 employees | 25 employees | 50 employees | 100 employees | 499 employees |
|---|---|---|---|---|---|
| Alberta* | $5,910 | $14,775 | $29,550 | $59,100 | $294,909 |
| Saskatchewan | $11,560 | $28,900 | $57,800 | $115,600 | $576,844 |
| Manitoba | $4,810 | $12,025 | $24,050 | $48,100 | $240,019 |
| Ontario | $4,010 | $10,025 | $20,050 | $40,100 | $200,099 |
| New Brunswick* | $870 | $2,175 | $4,350 | $8,700 | $43,413 |
| Nova Scotia* | $1,190 | $2,975 | $5,950 | $11,900 | $59,381 |
| Prince Edward Island* | $820 | $2,050 | $4,100 | $8,200 | $40,918 |
| Newfoundland and Labrador* | $1,790 | $4,475 | $8,950 | $17,900 | $89,321 |
*As the federal fuel charge only came into effect as of January 1, 2020, in Alberta, and as of July 1, 2023, in New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador, small businesses in these provinces will receive payments for proceeds assessed after those respective dates.
Additionally, to allow more businesses to receive a payment, it is also being proposed that corporations that file their tax return for 2023 after July 15, 2024, and on or before December 31, 2024, would be eligible for a payment. Legislation enacting these changes requires Royal Assent before payments can be issued to businesses filing after the initial July 15 deadline.
More information on the Canada Carbon Rebate for Small Businesses payment amounts from 2019 and 2020 to 2023 and 2024 has been published by Finance Canada.
Pollution pricing relief for farmers and fishers
Farmers are on the frontlines of climate change, facing ever-increasing risks of floods, droughts, and storms to their operations. Canada’s approach to pollution pricing offers targeted support to farmers, who are also investing to deploy cost-saving and job-creating clean technology solutions. Farmers generally do not pay the fuel charge for gasoline and light fuel oil (diesel) used in eligible farming machinery on farms. Additionally, biological emissions are not priced under this federal system, totalling roughly 97 percent of on-farm emissions.
Greenhouse operators also receive upfront relief of 80 percent of the fuel charge on propane and marketable natural gas used to heat an eligible greenhouse or to supplement carbon dioxide in eligible greenhouses to grow or produce plants.
Additionally, farm businesses that operate in provinces where the federal fuel charge is in place can generally receive a refundable tax credit, the purpose of which is to return fuel charge proceeds related to farm use of natural gas and propane in heating and drying activities in those provinces to help farmers transition to lower-carbon ways of farming.
Canada’s Greenhouse Gas Offset Credit System also provides an economic incentive for farmers to undertake innovative greenhouse gas reduction and removal projects.
As part of the strengthened climate plan and the 2030 Emissions Reduction Plan, the Government of Canada committed over $1.5 billion to accelerate the agricultural sector’s progress on reducing emissions while remaining a global leader in sustainable agriculture. This includes $470.7 million for the Agricultural Clean Technology (ACT) Program to create an enabling environment for developing and adopting clean technology. This will help drive the changes required to achieve a low-carbon economy and promote sustainable growth in Canada’s agriculture and agri-food sector.
Fishers are also provided with relief from paying the federal fuel charge on gasoline and light fuel oil (diesel) used in fishing vessels for eligible fishing activities.
Industrial pollution pricing system
Industrial pollution pricing systems are designed to ensure there is a price incentive for industrial emitters to reduce their greenhouse gas emissions and spur innovation while remaining competitive. Not only does pollution pricing ensure big polluters pay their fair share, it is also helping Canada attract new major projects that are creating good paying jobs.
Canada’s approach to pollution pricing gives major heavy industries certainty on the price they pay for the pollution they generate, helping to bring forward investments in job-creating cleaner alternatives to meet their business needs. This helps them make informed decisions and is also designed to protect against the risk of industrial facilities moving to another region to avoid paying a price on carbon pollution.
All proceeds generated from the federal industrial pollution pricing system in backstop jurisdictions are returned in the jurisdiction of origin to support industrial projects in cutting emissions and using new, cleaner technologies and processes.
The Output-Based Pricing System (OBPS) Proceeds Fund returns proceeds collected under the federal OBPS and is comprised of two streams: the Decarbonization Incentive Program and the Future Electricity Fund. Further information on projects being funded by federal industrial pollution pricing proceeds has been published on the Open Government Portal.