Alberta families to get 60% more back than they pay out in federal carbon tax

That’s the highest payout among the four provinces who don’t have their own carbon pricing system.

Earlier this month, Chrystia Freeland, Canada’s finance minister, announced how much residents in provinces that don’t have their own carbon tax will receive next year.

Alberta is 1 of 4 provinces whose residents will receive the 2021 Climate Action Incentive payment. For these provinces, 90% of the direct proceeds will be distributed through the 2021 Climate Action Incentive payment. The remaining 10% will go toward supporting small businesses, schools, universities, municipalities, and Indigenous groups.

For provinces with a provincial carbon tax, on the other hand, direct proceeds from the federal tax will be sent to the governments of those provinces.

None of the funds received from the federal carbon tax will be kept by the federal government.

Here’s how the Climate Action Incentive payments break down for a household:

Single adult, or first adult in a couple$490
Second adult in a couple, or first child of a single parent$245
Each child under 18 (starting with the second child for single parents)$123

For a family of 4, that works out to $981. That same family would receive $1,000 in Saskatchewan, $720 in Manitoba, and $600 in Ontario.

Plus, any families who live outside of a census metropolitan area—Calgary, Edmonton, and Lethbridge in Alberta—will get a 10% supplementary amount on top of the baseline amount. This recognizes the difficulty residents in smaller and rural communities experience in accessing cleaner technologies, such as public transit.

In Alberta, about 80% of the households paying the federal carbon tax will receive more back in their Climate Action Incentive payment than they’ll have paid out. The 20% that will pay out more than they’ll receive are the households with the highest incomes in Alberta.

The average household in Alberta will pay out about $598 in federal carbon tax charges, yet the average Climate Action Incentive payment per household will be $953.

Average cost impact per household of the federal system$439$462$720$598
Average Climate Action Incentive payment per household$592$705$969$953

Alberta’s difference of $355 is the largest difference of the 4 provinces whose residents will be receiving the Climate Action Incentive payment.

That means that Alberta families will get 59.4% more back from the federal government than they pay out, compared to 34.6% in Saskatchewan, 52.6% in Manitoba, and 34.9% in Ontario.

‪And if people are getting more back than they pay out, that’s more money they have to spend in their local economy than they used to.

This one-time payment will be distributed after Alberta residents file their 2020 taxes next year. In future years (as early as 2022), payments will be distributed to residents quarterly.

The federal government anticipates continually increasing the amounts paid out in the Climate Action Incentive to correspond to increases to federal carbon tax rates.

For example, it anticipates that Alberta families of four could receive as much as $3,242 by the 10th year, compared to the $981 anticipated for next year.

First adult$1,621
Second adult$811
This assumes a $170/tonne federal fuel charge in 2030 and that the federal government continues to pay 90% of direct proceeds to households.

Saskatchewan families, by comparison, could receives as much as $3,829 for a family of four, while Manitoba and Ontario families could receive $2,633 and $2,018, respectively, in 2030.

That still puts Alberta families at receiving the second highest payments of the four provinces.

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By Kim Siever

Kim Siever is an independent queer journalist based in Lethbridge, Alberta. He writes daily news articles, focusing on politics and labour.

3 replies on “Alberta families to get 60% more back than they pay out in federal carbon tax”

I found the reference to quarterly payments. I was looking for it because I couldn’t figure out how a $49 payment to an adult translated to almost $1000 per year for a family of four. Eventually I realized that your chart was wrapping. The money column is restricted in width on my computer, making it look like $49 when it is really $490 in payments for an adult. It makes much more sense now.

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