Canadians are poised to receive carbon price cuts Tuesday as the Liberals defend one of their most embattled policies.
The government says it will be the first time all banks will mark the payment as “Canadian Carbon Rebate” after years of inconsistent and unclear wording on bank statements.
The quarterly rebate will go to Canadians who file income tax while living in Alberta, Saskatchewan, Manitoba, Ontario and all four Atlantic provinces.
Payments vary depending on household size and province, while people in rural areas receive a surcharge.
On Tuesday, rural residents will receive a larger quarterly rebate amount, including a 20 percent surcharge and a 10 percent retroactive payment for April and July.
Economists widely favor carbon pricing, arguing that it is the most cost-effective way to reduce emissions, but the Liberals' policy is met with resistance at the provincial and federal levels, with Conservatives calling for a “carbon tax election” to lower costs life.
The federal NDP and some of its provincial counterparts have distanced themselves from previously supported policies.
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Ottawa sends rebates to offset what people pay in carbon prices when they buy fuel, so that they are no less worse off as a result.
People who do what they can to reduce their fuel consumption are in an even better position because they still get the same rebate but pay less in carbon taxes.
British Columbia, Quebec and the Northwest Territories have their own carbon pricing system for consumers, so residents there do not receive the federal payment. Yukon and Nunavut use the federal system but have an agreement to distribute revenue on their own.
Parliament's budget officer says most Canadians get back more in rebates than they pay.
But it also says the economic effects of carbon pricing could depress wages over time, erasing those benefits for some Canadians. The government argues that climate change itself can cause economic damage if left unchecked.
Ottawa has been at loggerheads with banks over how deposits are marked since they switched to quarterly rebate payments in 2022.
Many Canadians were confused — or didn't even realize they were getting a rebate — when payments showed up with vague labels like “Canadian EFT deposit,” “Credit Canada EFT,” or simply “federal payment.”
Some banks have previously argued that the term “Canadian Carbon Rebate” exceeds the 15-character limit in deposit descriptions.
