The government of Canada announced Climate Action Incentive (CAI) payments in October 2018. These payments are created in order to return the proceeds from the fuel charge to residents of the provinces who use the federal system of carbon pollution pricing: such as, Ontario, New Brunswick, Manitoba, and Saskatchewan.
Residents of those provinces may apply for this refundable tax credit on Schedule 14 when preparing their 2018 T1 personal tax return. TaxCycle T1 supports the calculation of these payments and their optimization between family members.
In this article
- What Is Climate Action Incentive (CAI)?
- Climate Action Incentive Eligibility
- Climate Action Incentive Amount
- How Do I Get The Climate Action Incentive?
- Climate Action Incentive Payment Amount For 2021
- Climate Action Incentive Payment Amount For Others
- Climate Action Incentive Payment Amount For Spouses
- CAI Amount For A Qualified Dependant
- Amount For A Single Parent’s Qualified Dependant
- Census Metropolitan Areas (CMA)
- CAI Fields On The Info Worksheet
- Preparing Schedule 14 In TaxCycle
- CAI On The Optimizations Worksheet
What Is Climate Action Incentive (CAI)?
Climate action incentive is a payment initiative for the provinces of Ontario, Manitoba, Saskatchewan, and Alberta. It consists of a basic amount and a 10% supplement for residents of small and rural areas.
This payment reduces your tax amount payable and the amount refundable when you apply for a refund.
Climate Action Incentive Eligibility
Only one member of your family can qualify for climate action incentive, the person can be you, your spouse, common-law partner.
This individual must have lived in one of the following provinces on 31 December 2020
- Alberta
- Saskatchewan
- Manitoba
- Ontario
The person must also be 18 years or older.
You cannot claim climate action incentive if at any time in 2020 you were
- a non-resident of Canada
- confined to a prison or a similar institution for a period of at least 90 days during the year
- an officer or servant of the government of another country, such as a diplomat, or you were a family member who lived with such a person or an employee of such a person
- person for whom a children’s special allowance was payable
To claim the CAI payment, you must:
- complete your 2020 income tax and benefit return.
- conclude Schedule 14 included with your return (available in your certified tax software and tax package).
- send (file) your return to the Canada Revenue Agency.
Climate Action Incentive Amount
The amount you receive for the climate action incentive depends on your province. Each province has its stipulated amount. It also depends on your personal situation.
This does not include supplements for small and rural communities. According to provinces, the amount is shown on the table below:
| Province | Basic Amount | Spouse or common-law partner amount |
Qualified dependant amount |
Single parent’s qualified dependant amount |
|---|---|---|---|---|
| Alberta | $490 | $245 | $123 | $245 |
| Saskatchewan | $500 | $250 | $125 | $250 |
| Manitoba | $360 | $180 | $90 | $180 |
| Ontario | $300 | $150 | $75 |
How Do I Get The Climate Action Incentive?
If you’re a resident of Ontario, Manitoba, Alberta, or Saskatchewan you can apply for the CAI rebate on your 2020 tax return.
You’re only allowed one credit per household, so you’ll have to decide which member of your family will apply for the credit (you’ll receive the same rebate no matter who applies).
The amount you’re entitled to will be added directly to your tax refund.
Climate Action Incentive Payment Amount For 2021
The federal government has specified the amount for the 2021 climate action incentive for the provinces that are under the initiative.
People can claim these payments through their 2020 personal income tax returns. The amount for each province in 2021 include:
| Amount | Ontario | Manitoba | Saskatchewan | Alberta |
|---|---|---|---|---|
| Single adult, or first adult in a couple1 |
$ 300 | $360 | $ 500 | $ 490 |
| Second adult in a couple, or first child of a single parent2 |
$ 150 | $180 | $ 250 | $ 245 |
| Each child under 18 (starting with the second child for single parents)3 |
$ 75 | $ 90 | $ 125 | $ 123 |
Climate Action Incentive Payment Amount For Others
You can claim climate action incentive payment for certain family members or dependants depending on your situation.
In addition to that, you can also get 10% supplements for children and dependants who live in rural and small villages.
Climate Action Incentive Payment Amount For Spouses
Before you can claim CIA payment for a spouse or common-law partner, you must be married or be in a common-law partnership in December 2020.
Furthermore, you cannot claim climate action incentive for a spouse or common-law partner if
- a non-resident of Canada
- confined to a prison or a similar institution for a period of at least 90 days during the year
- an officer or servant of the government of another country, such as a diplomat, or they were a family member who resided with such a person or an employee of such a person
- a person for whom a children’s special allowance was payable.
Note: you cannot claim CAI for a spouse or common-law partner who died before December 2020.
CAI Amount For A Qualified Dependant
You can also claim CAI payment for a dependent child or your spouse or common-law partner’s dependent child if on December 31, 2020, the child
- was dependent on you (or your spouse or common-law partner) for support
- lived with you (in the same home)
- was under 18 years old
- not married or living in a common-law partnership, and
- a parent that lives with their child
You cannot claim CAI for your child or spouse’s or common-law partner’s child if, at any time in 2020, the child was
- a non-resident of Canada
- confined to a prison or a similar institution for a period of at least 90 days during the year
- an officer or servant of the government of another country, such as a diplomat, a family member who resided with such a person, or an employee of such a person, or
- person for whom a children’s special allowance was payable
Amount For A Single Parent’s Qualified Dependant
If you want to claim CAI as a single parent’s qualified dependant, then as of December 31, 2020, you must
- not be married or in a common-law partnership, and
- have a child (or dependant) who meets all the conditions of a qualified dependant.
Census Metropolitan Areas (CMA)
For the purpose of the CAI supplement for residents of small and rural communities, individuals must have resided outside of a census metropolitan area (CMA) on December 31, 2018, as defined by Statistics Canada in the last census published before 2018.
Individuals cannot claim the supplement for residents of small and rural communities if their principal place of residence was located in one of the following CMAs:
- New Brunswick: Moncton or Saint John
- Ontario: Barrie, Belleville, Brantford, Greater Sudbury, Guelph, Hamilton, Kingston, Kitchener-Cambridge- Waterloo, London, Oshawa, the Ontario part of Ottawa-Gatineau, Peterborough, St. Catharines-Niagara, Thunder Bay, Toronto, or Windsor
- Manitoba: Winnipeg
- Saskatchewan: Saskatoon or Regina
CAI Fields On The Info Worksheet
If the taxpayer is a resident of one of the applicable provinces (Ontario, New Brunswick, Manitoba, and Saskatchewan), additional questions appear in the Credits section on the Information worksheet.
These questions must be completed to be able to determine whether the taxpayer or spouse is eligible to claim the CAI credit.
Preparing Schedule 14 In TaxCycle
TaxCycle will automatically display and begin to prepare Schedule 14 for residents of the applicable provinces (Ontario, New Brunswick, Manitoba, and Saskatchewan).
Eligibility requirements for this credit will include:
- Whether the individual resided inside or outside a census metropolitan area for purposes of calculating the supplement for residents of small and rural communities; and
- or any dependants meet the conditions as qualified dependents.
For coupled returns, complete Schedule 14 for one of the taxpayers. Upon which, the calculated credit is then transferred to line 449 of the T1 jacket. The Optimizations worksheet also includes fields to adjust who claims the CAI.
CAI On The Optimizations Worksheet
The Climate Action Incentive is included in the optimized calculations for coupled and family returns. There are fields on the Optimizations worksheet, the section on Detailed family optimizations of refundable credits which allow you to adjust who claims the credit.
Frequently Asked Questions About Climate Action Incentive In Canada
Q. Who should claim Climate Action Incentive?
Ans. Only one member of your family can qualify for climate action incentive, the person can be you, your spouse, common-law partner.
This person must have lived in one of the following provinces on 31 December 2020: Alberta, Saskatchewan, Manitoba, Ontario. The person must also be 18 years or older.
Q. Which spouse should claim Climate action incentive?
Ans. No particular person can claim the climate action incentive, it all depends on you and your spouse. Though it is advisable that if one of you has a balance owing and the other has a refund, the spouse with a balance owing should claim the payment to reduce the money you will have to pay. On the other hand, it all depends on you and your spouse to decide.
Q. Is the climate action incentive a monthly payment?
Ans. No, the climate action incentive is not a monthly payment. You will receive your own payment when you have filed your 2020 income tax returns.
But the Canadian government is working towards a quarterly payment as early as 2022.
Q. How much can I get when I file?
Ans. Your CIA rebate depends on your province and personal situation lime marital status and number of children. It is not based on income like other taxes, so every household will get the same amount.
The average family of four will receive an incentive of $1000 in Saskatchewan, $720 in Manitoba, $600 in Ontario, and $981 in Alberta.
Those who live in rural and small villages will have a 10% supplement.
