Last updated: December 19 2018

Breaking News: Canada Officially Introduces Climate Action Incentive Payments

On December 13, the second Budget Implementation Act was granted Royal Assent by the House of Commons*, thus giving the green light for Climate Action Incentive payments to offset new carbon taxation programs coming into effect April 1, 2019.

This federal levy affects taxpayers only in provinces that are not adopting their own carbon tax strategy, which currently includes Ontario, Manitoba, Saskatchewan, and New Brunswick. Under this federal initiative, carbon will be priced at $20 per tonne, or 4.4 cents per litre of gasoline, until 2020 when it will increase to $50.

Climate Action Incentive payments are a refundable credit designed to pre-pay this tax for individuals. The credit will be available to those who file their 2018 tax returns next spring. The amount available on the 2018 return is shown in the following table.

Province Taxpayer Spouse/Eligible Dep. Qualified Dep.
SK $305 $152 $76
MB $170 $85 $42
ON $154 $77 $38
NB $128 $64 $32

The introduction of this new carbon tax is designed to help Canada meet the lofty goal of reducing emissions by 30 percent below 2005 levels by 2030. However, it’s a controversial plan that’s been opposed by some, including the Ontario and Saskatchewan provincial governments.

In addition to introducing Climate Action Incentive payments, the implementation of Bill C-86 introduces measures that accomplish the following, according to Finance Canada:

  • Simplify Canada’s tariff regime to ease administrative burden and reduce compliance costs for Canadian businesses
  • Advance the rights and interests of consumers when dealing with their banks
  • Allow the Canada Revenue Agency to calculate the Canada Workers Benefit for any tax filer who has not claimed it

More information on these changes is available here: "CPP Premiums Going Up Soon – But There is Good News!"

* December 13 release from Finance Canada: “Government’s Plan to Invest in the Middle Class Receives Royal Assent”

Additional educational resources: Learn more about the recent tax changes affecting your Canadian clients by attending this winter’s CE Summit workshops in six Canadian cities. You’ll receive an advanced personal income tax update, and access to Evergreen Explanatory Notes.



Refer a Friend       Research    Calculators Course Trials