What is carbon pricing?
Carbon pricing is a financial incentive created to help people and businesses pollute less. It is about recognizing the cost of pollution and accounting for those costs in our daily decisions.
Why is it important?
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 in people’s pockets. It is estimated that carbon pollution pricing will contribute as much as one-third of Canada’s emissions reductions in 2030 which puts us on track to meet our climate target for the first time in our history.
Putting a price on pollution is a cornerstone of Canada’s plan to tackle climate change. It’s designed from the ground up to support households and the economy and works by encouraging businesses and consumers to choose less carbon-intensive options for energy production, home heating, and transportation.
What does carbon pricing mean for Canadians?
Canada’s approach to carbon pricing does not create inflation or increase the cost of living. In fact, the federal government is focused on addressing the cost-of-living crisis and is delivering the Canada Carbon Rebate to make life affordable for Canadians and support families.
Canada’s approach to carbon pollution pricing lets provinces and territories put their own system in place, as long as it meets national minimum stringency standards. Where a province or territory does not price pollution, or if they request the federal system, the federal backstop system is applied. The pay-in-advance Canada Carbon Rebate, distributed via direct bank deposit or cheque, outweighs the carbon costs for the vast majority of families in provinces where the federal fuel charge applies.
In other words, the vast majority of Canadians (8 out of 10 families) get more money back through the Canada Carbon Rebate (CCR) than they pay into the system because big polluters pay the most. And, as the price of carbon goes up, so do the rebates.
What does carbon pricing mean for British Columbians?
The Carbon Climate Rebate (formerly known as the Climate Action Incentive Payments) means more money back in the the pockets of Canadians.
2023-2024
The current benefit year for the climate action tax credit is based on your 2022 T1 Income Tax and Benefit Return, with payments in: July 2023, October 2023, January 2024, April 2024.
The maximum you can receive from these four payments combined is:
The income thresholds used to calculate your payment are:
This means, if your adjusted family net income for the 2022 tax year is below the threshold, you’ll receive the maximum amount based on the size of your family.
If your income is higher than the threshold, the credit is reduced by 2% of the income above the threshold until the credit becomes zero. For families, the point where the credit becomes zero will change depending on your family configuration.
2024-2025
Budget 2024 proposes to increase the B.C. climate action tax credit amounts and the threshold amounts effective July 1, 2024 with payments in July 2024, October 2024, January 2025 and April 2025. This would increase maximum annual amounts to:
The threshold amounts will increase to:
Still have questions? Follow the links below to learn more!
B.C. Climate Action Tax Credit
Government of Canada - Carbon Pollution Pricing
