The Alberta Carbon Tax is a federally imposed program that puts a price on carbon emissions in Alberta. Before the federal carbon tax, the province had the Alberta Carbon Levy, which was repealed through Bill 1, an act to cancel the provincial carbon tax on June 4, 2019. From January 1st, 2020, onwards, Alberta is going to be under the Federal Carbon Tax, which follows the same premise.
The federal carbon tax in Alberta, as well as its revenue and rebates, will follow most of the rules applied in provinces that didn’t have a provincial carbon tax, or that didn’t meet the minimum standards, such as Ontario, Saskatchewan, Manitoba and New Brunswick.
What is the Alberta Carbon Tax?
The Alberta Carbon Tax is a federal program implemented to reward residents, businesses, and communities for taking steps to lower emissions. The tax will be included in the price of any fuel that emits greenhouse gases, including transportation and heating fuels like diesel, gasoline, natural gas, and propane, and will provide Alberta and other provinces with a means of transitioning into a more diversified economy.
The money raised by the tax, an expected $610 million over the next four fiscal years, will be reinvested into the Alberta economy in the form of diversification and job creation, as well as in the form of carbon rebates, also known as Climate Action Incentive payments, and support for affected sectors so they can adjust to the tax, such as schools, hospitals, small and medium-sized businesses, colleges and universities, municipalities, Indigenous communities and not for profit organizations.
As of January 1, 2020, the Alberta carbon tax added an additional 4.42₵/L to gasoline consumption, $1.049/GJ to natural gas usage, and 3.10₵/L to propane consumption. By 2021, those rates increased to 6.63₵/L for gasoline, $1.576/GJ for natural gas, and 4.64₵/L for propane.
UPDATE: In order to accelerate the energy transition in Canada, the Federal government announced in 2021 an increase to the carbon tax annually at a rate of $15 per tonne from 2023-2030. This increase will also result in increased Climate Action Incentive Payments (CAIP).
Here’s a detailed look at how the carbon tax in Alberta will affect natural gas rates over the next years until 2030. The tax will flow to natural gas consumers as part of the delivery charges on the monthly bill (GST will also apply).
- January 1, 2020, carbon tax costs: $1.0499523/GJ
- April 1, 2020, carbon tax costs: $1.5762711/GJ
- April, 2021, carbon tax costs: $2.1025899/GJ
- April, 2022, carbon tax costs: $2.6289087/GJ
- 2023, carbon tax costs: $3.42/GJ
- 2024, carbon tax costs: $4.21/GJ
- 2025, carbon tax costs: $4.99/GJ
- 2026, carbon tax costs: $5.78/GJ
- 2027, carbon tax costs: $6.57/GJ
- 2028, carbon tax costs: $7.36/GJ
- 2029, carbon tax costs: $8.15/GJ
- 2030, carbon tax costs: $8.94/GJ
The Federal government hasn’t published a schedule of increases yet, but is has been historically implementing increases at the beginning of each fiscal year, in April.
Find below the estimated fuel charge rates for Alberta until 2030.
How does the carbon tax rebate work in Alberta?
The carbon tax rebate in Alberta works similarly as in the other provinces with a federally imposed carbon tax. However, the first rebate payment claimed by Albertans accounted for a 15-month period: Three months in 2020 (January to March) and 12 months (April 2020-March 2021).
According to the federal government, a family of four people received $1,544 in 2023-2024.
- $$772 for the first adult.
- $386 for the second adult in a couple (single parents will receive this amount for their first child).
- $193 for each child.
As stated by the Government of Canada, in early 2020, Albertan households received $880 on average ($126 for the first three months of the carbon pricing and $754 for the next 12 months, April 2020 to March 2021). In the following years, however, the payments will account for the 12-month period (from March to April), just like in the other provinces.
For 2021 and 2022, the current carbon tax rebates projections for Alberta are as follows.
|Charges||2022 ($50/tonne)||2023 ($65/tonne)|
|First adult in a couple (or single adult)||$600||$772|
|Second adult in a couple (or first child of a single parent)||$300||$386|
|Each child under 18 (or the second child for single parents)||$150||$193|
|Expected amount for a family of four||$1,200||$1,544|
With the increases to the carbon price, the Federal government hasn’t published a schedule of how the Climate Action Incentive Payments (CAIP) are going to look like from 2023 onwards. However, it has posted illustrative carbon tax rebate amounts assuming a $15/tonne annual increase in the federal fuel charge starting in 2023.
For 2025 and 2030, the current carbon tax rebates projections for Alberta are as follows.
|Charges||2025 ($95/tonne)||2030 ($170/tonne)|
|First adult in a couple (or single adult)||$1,047||$1,621|
|Second adult in a couple (or first child of a single parent)||$537||$811|
|Each child under 18 (or the second child for single parents)||$268||$405|
|Expected amount for a family of four||$2,147||$3,242|
Eligibility: How do you qualify for the Alberta Carbon Rebates?
More than 90% of Albertans will receive a carbon tax rebate from the federal government. According to the Department of Finance Canada, most Alberta residents will receive more in carbon tax rebates than they incur in increased costs resulting from the price of emissions.
Before the Alberta Carbon Levy was scrapped in mid-2019, individuals who had a net income of less than $47,500 would receive the full rebate along with couples and families with a net income of less than $95,000. Individuals with a net income between $47,500 and $51,250, and families with net incomes between $95,000 and $103,000 (depending on the number of children), would receive partial rebates. However, now under the Federal Carbon Tax, it’s still unclear what’s going to be the proportion between net income and carbon rebates in Alberta.
How to claim the Alberta carbon tax rebates?
No application is necessary for you to get your rebate. All you have to do is make sure you’ve filed your tax return and filled in a quick form — you also need to meet the income criteria. The rebate is tied to income rather than energy use. As a result, eligible recipients will gain a financial incentive to reduce household emissions. The payments are made through the personal income tax returns. The Climate Action Incentive payments moved in early 2022 from annual to quarterly payments. For more information about the Alberta Carbon Tax or how rebates work in other provinces, visit our Federal Carbon Tax Rebates page.