Federal carbon tax rebates will exceed the cost for most people affected

OTTAWA — The federal government will return 90 per cent of all the money it collects from a carbon price directly to the Canadians.

But it has pushed back the start date of its new carbon tax another four months to allow the affected provinces to prepare.

Prime Minister Justin Trudeau unveiled the details of the carbon tax rebates at a Toronto college on Tuesday, in an attempt to sell Canadians on the need to pay for pollution without breaking their pocketbooks.

“Starting next year, it will no longer be free to pollute anywhere in Canada,” Trudeau said at Humber College.

Unlike some political leaders, both in Canada and elsewhere, the prime minister said he is not willing to pass the burden of climate change on to our children and grandchildren.

Ottawa required all provinces to put a minimum price on pollution of $20 a tonne of emissions by Jan. 1. Saskatchewan, Manitoba, Ontario and New Brunswick have not complied and will have a federal carbon levy on fuels as well as a cap-and-trade style of system for large industrial emitters imposed on them.

Residents in those provinces will start getting federal rebates on their next tax return to offset the extra costs they will pay for everything from gasoline and groceries to home heating and electricity.

British Columbia, Alberta, Quebec, Newfoundland, and the Northwest Territories all put a price on pollution high enough to meet federal standards and the revenues in those provinces are being handled by those provincial governments. Nunavut and the Yukon both chose to use the federal system and therefore they also will get to decide how to use the revenues.

Prince Edward Island asked to use just the big industrial emitters portion of the federal program, but will have its own carbon levy, so it too will get to distribute the revenues as it sees fit.

Ottawa anticipates collecting more than $2.3 billion in carbon taxes in those provinces and 90 per cent of that will go to household rebates. The payments vary because carbon taxes collected will be higher depending on how provinces power and heat homes.

The remaining 10 per cent will be handed out to small and medium-sized businesses, schools, hospitals and other organizations that can’t pass on their costs from the carbon tax directly to consumers. Details of that program are not yet available.

Your rebate will be determined when you file your taxes, either added to your refund payment or deducted from your tax owing. The amount will be based on the number of adults and children in a household.

People who live outside of census metropolitan areas will get 10 per cent more than those in cities to account for their increased energy use and lack of public transportation as an option to reduce their fuel consumption.

The average household payments will be $256 in New Brunswick, $300 in Ontario, $336 in Manitoba and $598 in Saskatchewan.

Trudeau said putting a price on pollution provides an incentive for people and businesses to find ways to reduce their emissions, but he doesn’t want to make life unaffordable for families. The rebates will ensure families don’t suffer and can further increase their savings if they do find ways to reduce their emissions.

Officials say 70 per cent of people in those provinces will get back more than they end up paying out as fuel costs rise to incorporate the carbon tax.

Every individual in those provinces regardless of income, will be eligible for a rebate.

They will also get a four-month reprieve from the carbon tax as the government pushed the implementation of its $20 per tonne tax to April 1 to give more time to fuel distributors and other companies to put it in place.

The carbon tax is set to be a critical element for debate in the next federal election with the Conservatives promising to scrap it if they are elected and growing push back from premiers. Trudeau believes Canadians will be on the side of pricing pollution in order to ensure emissions are cut and climate change is kept in check because they have seen the impacts from forest fires and floods to droughts and heat waves.

“Will we kick this can down the road yet again to be dealt with in another place or at another time or will we show some courage and do what needs to be done for this generation and the next,” he said.

Trudeau was with Environment Minister Catherine McKenna and Finance Minister Bill Morneau in Ontario Premier Doug Ford’s Toronto riding to make the announcement. Ford has been among the most critical of the carbon tax and immediately cancelled Ontario’s cap and trade system when he was elected earlier this year.

Trudeau said Conservative politicians who want to criticize the carbon tax have to answer to Canadians.

Ottawa announced two years ago it would require every province to have a price on emissions, and that it would impose one on those who refused. The current requirement is for it to be $20 a tonne by Jan. 1, rising $10 each year until it hits $50 a tonne in 2022.

Mia Rabson, The Canadian Press