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Climate Action Incentive Payment (CAIP) Canada

As a way to fight climate change, the Canadian Government introduced Climate Action Incentive Payments (CAIP). Prior to 2021, CAIP was known as Climate Action Incentive (CAI). This incentive is meant to give money back to provincial residents who might be feeling the effects of federal pollution pricing. This program will make polluters pay depending on the amount of carbon they release.

The program is available to residents of Alberta, Saskatchewan, Manitoba, and Ontario. Residents of other provinces won’t be charged the fuel charge and hence they are not eligible for CAIP.

In this article, we will highlight what Climate Action Incentive Payments are, eligibility and how to get them.

What is Climate Action Incentive Payment?

The Climate Action Incentive Payment is an effort or incentive by the Canadian Government to protect the environment and make it sustainable by providing some benefits. The incentive is meant to fight climate change. CAIP is designed to keep on increasing every year due to the increasing price of carbon pollution. 

Climate Action Incentive Payment Date

Starting the financial year 2021, you will be receiving tax-free payments in April, July, October, and January. This is a change from the past when you could claim it as a refundable tax credit.

Climate Action Incentive (CAI) Rebate changed to Climate Action Incentive Payment (CAIP) in 2021.

Climate Action Incentive Eligibility

To be eligible for CAIP, apart from being a resident of Alberta, Saskatchewan, Manitoba, or Ontario, you must:

  • Be 19 years old or older
  • You have or have had a spouse or common-law partner
  • You are or have previously been a parent and live with your child

Do You Have an Eligible Child?

To have your child included in the calculation of CAIP, then the child must be eligible. The child must meet the following conditions at the beginning of the payment month to be eligible:

  • Must be 19 years of age
  • Your child lives with you
  • You are primarily responsible for the care and upbringing of your child
  • Your child must be registered for the Canada child benefit

In case you are co-parenting or share custody of the children with your ex-spouse, then you will receive 50% of the amount you would have received.

How Climate Action Incentive Payments (CAIP) Work

If you have a spouse or a common-law partner, only one of you can get the benefit in the family. Climate action incentive tax credit is given to the spouse whose tax return is assessed first. However, the amount will be the same regardless of who receives it.

To continue receiving the benefit, the person receiving it must continue to file tax returns and benefits throughout the year if applicable.

How to Apply for Climate Action Incentive Payment (CAIP)

If you are a resident of Alberta, Saskatchewan, Manitoba, or Ontario, you don’t need to apply to receive CAIP. The Canada Revenue Agency (CRA) will determine your eligibility when you file your tax returns. They will send you the payments if you are entitled.

If you are a new resident of Canada, you need to fill in and sign these forms and mail them to the nearest tax center.

Climate Action Incentive Payment Amounts for 2022

For the 2022/23 financial year, Climate Action Incentive Payment amounts are as follows:

Ontario

A family of four will receive $745. 

  • An individual - $373
  • A spouse or common-law partner - $186
  • A child below 19 - $93
  • First child in a single-parent family - $186

Manitoba

A family of four will receive $838. 

  • An individual - $416
  • A spouse or common-law partner - $208
  • A child below 19 - $104
  • First child in a single-parent family - $208

Saskatchewan

A family of four will receive $1,101. 

  • An individual - $550
  • A spouse or common-law partner - $275
  • A child below 19 - $138
  • First child in a single-parent family - $275

Alberta

A family of four will receive $1,079. 

  • An individual - $539
  • A spouse or common-law partner - $270
  • A child below 19 - $135
  • First child in a single-parent family - $270

Read also: Universal basic income in Canada.

When Does Climate Action Incentive Get Paid?

If you are entitled to receive CAIP, then you can expect to receive them in April, July, October, and January. After your 2021 income tax and benefits have been processed, you can expect to receive your first CAIP on July 15, 2022. If you don’t receive CAIP on the exact date, you can wait for 10 working days before contacting CRA. You will get the CAIP by direct deposit.

Summary of Climate Action Incentive Payment (CAIP) Canada

The Canadian Government introduced CAIP to give money back to provincial residents who could be feeling the effects of federal pollution pricing. The incentive is available to residents of Alberta, Saskatchewan, Manitoba, or Ontario. If you are not a resident of these provinces, you won’t be charged fuel charge and hence you can’t qualify for CAIP.

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