OTTAWA –Prime Minister Justin Trudeau unveiled Tuesday how the federal government will put carbon tax money back in the hands of Canadians in provinces that have rejected Ottawa’s call for a climate plan that puts a price on pollution.
The majority of Canadians paying into the federally-imposed carbon pricing plan will receive more money back come tax time than they’ll end up paying in, Trudeau pledged. The new "Climate Action Incentive" payments will reimburse Canadians in Ontario, New Brunswick, Saskatchewan, and Manitoba for the new taxes on things like gas, electricity, and heating.
All four provinces are, or will likely soon be led by premiers who oppose the carbon tax and have vowed to fight the federal imposition of one. In these provinces the federal "backstop" carbon tax—starting at $20 a tonne in 2019 and up to $50 per excess tonne by 2022—is being applied. As well, the federal cap and trade style plan for large emitters will be imposed in these provinces.
The money for Canadians in the four affected provinces will be delivered as part of federal tax returns. It’ll either be added to the money you get back at the end of the year, or subtracted from what you owe the Canada Revenue Agency.
There is also an additional 10 per cent increase on the rebate for Canadians in small, rural, and remote communities.
The amount varies province to province based on the kinds of energy sources in each. The amount is based on the number of people per household, and will increase each year as the tax increases.
Here's how those dollars will be doled out.
Ontario:
In for an average family of four in Ontario will be $307 in 2019, increasing each year. Come 2022, the rebate for the average Ontario family of four will be $718.
In 2019 each single adult or first adult in a couple will receive $154; the second adult will receive $77, as will single parents for their first child; and for each child in a family the rebate will be $38.
Come 2022 each single adult or first adult in a couple will receive $360; the second adult will receive $180 as will single parents for their first child; and for each child in a family the rebate by then will be $89.
New Brunswick:
The carbon tax rebate for a family of four $256 in 2019, growing to $607 in 2022.
In 2019 each single adult or first adult in a couple will receive $128; the second adult will receive $64, as will single parents for their first child; and for each child in a family the rebate will be $32.
Come 2022 each single adult or first adult in a couple will receive $303 the second adult will receive $152 as will single parents for their first child; and for each child in a family the rebate by then will be $76.
Saskatchewan:
In for a family of four will be $609 in 2019, increasing to $1,495 in 2022.
In 2019 each single adult or first adult in a couple will receive $305; the second adult will receive $152, as will single parents for their first child; and for each child in a family the rebate will be $76.
Come 2022 each single adult or first adult in a couple will receive $731 the second adult will receive $364 as will single parents for their first child; and for each child in a family the rebate by then will be $182.
Manitoba:
In for a family of four will be $339 in 2019, rising to $801 in 2022.
In 2019 each single adult or first adult in a couple will receive $170; the second adult will receive $85 as will single parents for their first child; and for each child in a family the rebate will be $42.
Come 2022 each single adult or first adult in a couple will receive $402 the second adult will receive $201 as will single parents for their first child; and for each child in a family the rebate by then will be $99.
Provinces' choice:
British Columbia, Alberta, Quebec, Nova Scotia, Newfoundland and Labrador, and the Northwest Territories all have their own systems for putting a price on pollution that meet the federal requirements.
Nunavut and the Yukon have chosen to embrace both the federal price on carbon and large emitter plans, while Prince Edward Island has its own carbon plan but will be adopting the federal approach to taxing large emitters.
For either having their own plan, or adopting the federal government’s, all nine of these governments get to decide for themselves how the revenue from their plans will be spent and will not be part of this rebate system.
Politics of the plan
In the first year Canadians in the four provinces with the federal tax will receive their first full rebates after filing their 2018 tax return. That means some will receive a big cheque in an election year, even though they will only be starting to pay into the new tax a few months prior.
Trudeau denied this plan was an effort to buy votes on what’s proved to be a contentious policy, though the money will be going directly to voters in provinces where the conservative leaders oppose the policy.
Trudeau said Canadians want to be part of the solution and reduce carbon emissions, but they want some help for this time of climate change "transition."
The announcement was made alongside Environment and Climate Change Minister Catherine McKenna, Finance Minister Bill Morneau, and Science and Sport Minister Kirsty Duncan at Humber College in Etobicoke, which is part of Ontario Premier Doug Ford's riding.
Trudeau dispatched ministers Jim Carr, Ralph Goodale, and Ginette Petitpas Taylor to their home provinces of Manitoba, Saskatchewan, and New Brunswick to make similar announcements.
The carbon tax is poised to be a top federal campaign issue in 2019, with Conservative Leader Andrew Scheer vowing to scrap the tax if elected.
On Tuesday he called the new rebate plan an "election gimmick."