What You Need to Know About the Climate Action Incentive Supplement for Smaller Communities

For quite some time, people living in Alberta, Ontario, Manitoba, Saskatchewan, and more recently in Nova Scotia, PEI, and Newfoundland & Labrador have been getting a bit of money back every three months through the Climate Action Incentive Payment (CAIP). If you’re from a rural area, you’ve been getting an extra 10% on top of that. But there’s good news for folks in rural areas – this year, that extra bit is going up to 20%. 

And there’s more good news for those of you using heating oil. The government is pausing the extra carbon tax on heating oil deliveries for the next three years. 

What’s the Climate Action Incentive Payment All About? 

The CAIP is money given back to you every quarter if you live in a province where the federal government charges a carbon tax. This is part of Canada’s plan to help the environment and encourage greener living. 

How Do You Get This Payment? 

If you’re from Ontario, Manitoba, Alberta, Saskatchewan, New Brunswick, Nova Scotia, PEI, or Newfoundland & Labrador and you’re up to date with your tax returns, you’ll get this payment automatically every three months. 

You’re eligible if: 

• You’re considered a resident of Canada for tax reasons. 
• You live in one of the provinces mentioned. 
• You’re 19 or older when the payment is due. 
• For those in smaller or rural communities, just check a box on page 2 of your T1 tax form to show you’re eligible for the extra rural supplement. This helps because folks in rural areas often use more energy and have fewer public transport options. In PEI, everyone automatically gets the 10% rural supplement. 

When Will You See the Extra Supplement? 

You’ll see the increased supplement in your April 2024 payment, based on your 2023 tax return. Remember, you need to file your tax return to get this payment. 

Finally, How Much Money Are We Talking? 

The amount you get depends on where you live, whether you’re single or in a relationship, and how many kids you have. Here’s a breakdown for 2023-2024: 

*The amounts for April 2024 to January 2025, including the increased 20% supplement, haven’t been announced yet. 

Changes in your family situation can affect your eligibility, so if you separate from your partner, move out of an eligible province, or a dependent under 19 moves out, you need to let the CRA know. 

What About Heating Your Home? 

Normally, you’d pay a bit extra for carbon-based fuels like heating oil or gas because of the carbon tax. But for the next three years, there’s no carbon tax on heating oil, which is great news, especially in places like Atlantic Canada where many still use oil to heat their homes. 

If you’re wondering how all this affects your taxes, Orientum Group is ready to help out.