What's New This Tax Season?
Climate Action Incentive Payments
On October 23, 2018, the Government announced the next steps in its climate change plan, ensuring that a price on carbon pollution will exist across Canada beginning in 2019.
It implements a fuel charge in jurisdictions that voluntarily adopt the federal system, as well as in jurisdictions whose systems do not meet the federal standard for reducing carbon pollution. The Government also released details about how direct proceeds from carbon pollution pricing under the federal system would be returned to the province or territory of origin:
For those jurisdictions that have voluntarily adopted the federal system, direct proceeds will be directly returned to the governments of those jurisdictions.
For those provinces that do not meet the federal standard—Ontario, New Brunswick, Manitoba and Saskatchewan—the majority of the fuel charge proceeds will be returned through new Climate Action Incentive payments to residents of those provinces.
The Budget Implementation Act, 2018, No. 2 includes the legislative amendments required to implement the Climate Action Incentive payments. With Royal Assent, the Minister of Finance is now specifying Climate Action Incentive payment amounts for 2019 for the four provinces mentioned above.
These payments are to be administered through 2018 personal income tax returns.
A supplementary amount in addition to these baseline Climate Action Incentive payments will be provided for eligible individuals and families residing outside a census metropolitan area, as defined by Statistics Canada, in recognition of their increased energy needs and reduced access to alternative transportation options. This supplement will increase the baseline amount by 10 per cent. The Minister will specify the amounts for subsequent years at a later date.