July carbon rebates to be submitted, mailed today

OTTAWA — The second installment of this year’s national carbon price rebate will be deposited or mailed to millions of households today.

Canada’s carbon rebate returns 90 per cent of revenue collected by Ottawa from the consumer carbon tax to households in the eight provinces where it is paid.

British Columbia and Quebec have their own separate but equivalent carbon pricing systems and therefore do not receive federal rebates.

The rebate is sent in four installments over the year and is based on household size and the province you live in, with a family of four receiving between $190 and $450 today.

Provinces where fossil fuels account for a larger share of electricity have larger carbon reductions because those consumers pay more for the price of carbon.

Today is also the last day for small businesses to file their tax returns to qualify for a new automatic refundable tax credit to offset some of their carbon pricing costs.

Canada’s new carbon rebate for small businesses is Ottawa’s attempt to make good on its failed promise to return seven per cent of carbon pricing revenue to smaller businesses in the form of grants to help them invest in energy efficiency.

Various problems meant that only about $35 million was returned through that program, with about $2.5 billion owed for the period from April 1, 2019, to March 31, 2024.

Finance Minister Chrystia Freeland promised in the last budget to fix this with this new tax credit.

To get a share of the $2.5 billion, companies must file their 2023 tax returns by today. How much they receive will depend on pay rates that have not yet been set by Freeland and will depend on how many employees an individual company has had and what years they have been eligible.

The government estimates that around 600,000 businesses are eligible for some amount of the money.

Today’s rebate to consumers marks the first payment made since Ottawa changed the law to force banks to name deposits as required by the federal government.

Some big banks and the federal government have been at a standoff for several years because the banks failed to use the description Ottawa wanted, leading to confusion when Canadians suddenly saw the payment appear in their bank account.

When the first rebates were issued by direct deposit in 2022, few banks used a name that gave any idea what the money was for. The labels included things like “federal payment” and “EFT Canada.”

Many banks said that making the change was too difficult or that they were too limited in character to work.

In April’s budget, Freeland moved to end the impasse by making an amendment to the Financial Administration Act that requires banks to comply with the government’s wishes for the label.

Most will now label today’s deposits as ‘CdaCarbonRebate’ in English, although some banks have yet to confirm whether the change will be applied for this month or not.

The bill that amended the law received royal assent on June 20.

This report by The Canadian Press was first published on July 15, 2024.

The Canadian Press