Canadians to receive first carbon tax rebate of 2024

Canada’s federal government will pay its first pollution pricing rebate of the new year today.

Under the government’s climate action incentive payment (CAIP) program, eligible Canadian families will receive a rebate ranging from about $150 to $300. CAIP is funded primarily by Canada’s carbon tax which is designed to fight climate change by disincentivizing fossil fuel admissions and encouraging a switch to green energy. Rebates will be paid in the eight provinces that have adopted the program.

Although the carbon tax has achieved its dual aims to an extent, expect its future to be uncertain as Canadians face rising fuel costs. In response to rising prices, Prime Minister Justin Trudeau and his allies have called for a three-year exemption for heating oil. This was heavily criticized by environmentalists and has sown doubts on the effectiveness of the tax, as the implementation of green technology has not kept pace with the economic burden on Canadian families. Combined with right-wing criticisms that the tax is bad for business, expect the carbon tax to become a major environmental issue during the next election. Indeed, its survival may be tied to the future of Trudeau’s governance of Canada.