The carbon levy is already in full swing—and quickly on its way to next year’s increases. However, even though it’s been under way for a while now, figuring out how your household’s carbon tax rebate and costs are calculated may still seem a bit confusing.
Simplifying the rebate process
The primary (and probably the most contentious) feature of the carbon levy is the extra tax that is now charged on top of certain items. How do you know when you are going to be charged extra?
The levy is added onto any fuels that emit greenhouse gases. This includes natural gas, gasoline, diesel, and propane. If you purchase gasoline for the vehicle you drive, or if your house is heated using natural gas, diesel, or propane, then you are going to be paying a little extra on each bill.
Certain fuels, however, are exempt from the levy; these included the marked gas and diesel that are used on farms. Here’s the interesting part, though: the extra revenue the government collects from the added tax actually goes back into the carbon tax rebate—as well as into other resource and energy conservation efforts and initiatives.
The complicated feature of the carbon levy and carbon tax rebate is the variation
Everyone isn’t charged equally when it comes to the carbon levy. Those who purchase more of the items that are targeted by the carbon levy are cumulatively charged more over time than those who don’t depend as much on those fuel sources. That forms one part of the incentive. By conserving and taking steps to make your lifestyle or business more energy efficient, or by investing in green energy sources, you can save yourself the added costs of the levy. Lowering the amount you spend on the carbon levy, however, does not change how much of a carbon tax rebate you are eligible to receive.
Your carbon tax rebate is based on your household income, and it is influenced by factors like how many earners you have in your home, how many dependents you have, and your adjusted family net income. Your rebate isn’t contingent on your ability to make your home more energy efficient; it is rather intended to help households and families who exist within a certain income range to afford the increases the levy will put on them. The carbon tax rebate is also intended to make it more financially possible for families and households to take steps to improve energy efficiency, and to incorporate green or renewable energy sources into their homes; however, in addition to the rebate, there are also a number of government initiatives that can help make green energy more accessible to all families.
How can you calculate the impact the carbon tax rebate and carbon costs will have on your household?
The Government of Alberta has created a carbon cost and carbon tax rebate calculator that will help you to determine how much you stand to gain or pay as a result of the carbon levy. The calculator allows you to input your adjusted family net income, your family status (spouse, number of kids, etc.), your energy and fuel use, and your food and beverage costs; once submitted, the calculator will provide you with an estimate on how much you will be required to pay, and how much you are eligible to receive as a result of the carbon levy. It will also tell you if your carbon tax rebate will cover the extra costs of the levy.
The calculator provides you with only an estimate, so be prepared for adjustments to the official figures. However, you can still make use of the information provided to you in the estimate. You can make some adjustments to determine how much fuel you need to conserve in order to maximize the benefit of your rebate, or you can determine how much of the carbon tax rebate you can spare to invest in the innovations that can boost your energy efficiency—like installing a smart thermostat, LED lightbulbs, and investing in green energy sources.
For more information about the carbon tax rebate, or about other steps you can take to make your energy use more economical, visit energyrates.ca today.