441-02593 (Taxation)

Climate action is critical to Canada’s long-term health and economic prosperity. Carbon pollution pricing is widely recognized as the most efficient means of reducing greenhouse gas emissions, which is why the Government of Canada continues to make sure that it is not free to pollute in Canada.

In October 2023, the Prime Minister announced that the fuel charge would be temporarily paused on deliveries of heating oil, effective November 9, 2023. This announcement was part of a suite of new measures aimed at lowering energy bills for Canadians, and to provide additional time and support to help Canadians transition to cleaner energy alternatives.

The federal price on pollution is revenue neutral for the federal government; the direct proceeds from the federal carbon pricing system remain in the province or territory where they are collected. Put simply, every dollar collected from the carbon price is returned.

In provinces where the federal fuel charge applies, over 90 percent of projected direct proceeds are returned to residents of those provinces through the quarterly Canada Carbon Rebate. As confirmed by independent experts, the majority of households receive more back in rebates than they pay through the carbon price, with low and middle income households benefitting the most. The other projected fuel charge proceeds are used to support small and medium-sized businesses and Indigenous governments. In Budget 2024, the government announced the new Canada Carbon Rebate for Small Businesses, an accelerated and automated return process to provide direct refunds to small and medium-sized businesses. Recognizing that many farmers use natural gas and propane in their operations, farming businesses may claim a refundable tax credit to directly receive a portion of fuel charge proceeds.

Canada Carbon Rebate amounts for 2024-25 reflect the temporary pause of the fuel charge on deliveries of home heating oil. Starting in April 2024, residents of provinces where the federal fuel charge applies started receiving their first of four quarterly Canada Carbon Rebate payments for this fiscal year, with additional payments in July 2024, October 2024, and January 2025. A family of four in these provinces will, under the base Canada Carbon Rebate in the 2024-25 fiscal year, receive: $1,800 in Alberta, $1,200 in Manitoba, $1,120 in Ontario, $1,504 in Saskatchewan, $760 in New Brunswick, $824 in Nova Scotia, $880 in Prince Edward Island and $1,192 in Newfoundland and Labrador.

Those living in a rural or small community are eligible for a supplement in addition to the base Canada Carbon Rebate amount (except in Prince Edward Island, where all residents receive the rural top-up). In recognition of rural Canadians' higher energy needs and more limited access to cleaner transportation options, through legislative amendments in Bill C-59 the government is doubling the rural supplement from 10 percent to 20 percent of the base rebate amount, starting in April 2024. 

The government is also working to expand rural supplement eligibility to more Canadians who need this support and, as committed to in Budget 2024, will announce a proposal for better defining rural areas later this year.

The government of Canada will continue to take action to support the middle class and make life more affordable for Canadians, including through actions announced in Budget 2024 to build more affordable homes and make life cost less.