January 20, 2025
Climate Action Incentive Payment (CAIP) Explained
Learn how the Climate Action Incentive Payment works, who is eligible, how much you can receive, and what you need to do to get it.
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The Climate Action Incentive Payment (CAIP) is a tax-free quarterly benefit designed to help Canadian families offset the cost of the federal carbon pricing system. Most residents in provinces that use the federal carbon levy receive this payment automatically.
How CAIP Works
The federal government collects revenue through carbon pricing (the fuel charge on fossil fuels). The CAIP returns the bulk of this revenue directly to residents of applicable provinces. The goal is to make carbon pricing revenue-neutral for most households — meaning the average family receives back more than they pay in increased costs.
Eligible Provinces (2025)
CAIP is available to residents of provinces where the federal fuel charge applies:
- Alberta
- Saskatchewan
- Manitoba
- Ontario
- New Brunswick
- Nova Scotia
- Prince Edward Island
- Newfoundland and Labrador
British Columbia and Quebec operate their own carbon pricing systems and are not part of the federal CAIP program.
Payment Amounts (2025-2026)
Annual CAIP amounts vary by province. For the 2025-2026 benefit year, approximate annual amounts for a single adult are:
| Province | Single Adult | Second Adult | Per Child |
|---|---|---|---|
| Alberta | $900 | $450 | $225 |
| Saskatchewan | $800 | $400 | $200 |
| Manitoba | $600 | $300 | $150 |
| Ontario | $560 | $280 | $140 |
Exact amounts are adjusted annually based on carbon pricing revenues. A family of four in Alberta could receive approximately $1,800 per year.
Rural Supplement
Residents of small and rural communities receive a 20% supplement on top of the base CAIP amount. The CRA determines eligibility based on your postal code and census metropolitan area data from your most recent tax return.
Who Is Eligible
To receive the CAIP, you must:
- Be a Canadian resident for income tax purposes
- Live in an eligible province on the first day of the payment month
- Be 19 years of age or older, or be (or have been) married or a common-law partner, or be a parent who lives with their child
How to Receive CAIP
You do not need to apply separately for the CAIP. Simply file your income tax return, even if you have no income. The CRA automatically determines your eligibility and calculates your payment based on your return.
Payments are issued quarterly:
- April
- July
- October
- January
Signing up for direct deposit through CRA My Account ensures you receive payments as quickly as possible.
Impact on Other Benefits
CAIP is non-taxable and does not count as income for any purpose. It does not affect:
- Income-tested benefits like the GST/HST credit, CCB, or GIS
- Your tax bracket or marginal rate
- Any deductions or credits on your return
Why You Might Not Receive CAIP
Common reasons for not receiving the payment:
- You did not file a tax return — the CRA cannot calculate eligibility without a return
- You moved to a non-eligible province — CAIP stops if you move to BC or Quebec
- Your direct deposit information is outdated — update it through CRA My Account
- You are under 19 and do not meet the exception criteria
Sources
Use our calculators to apply these concepts to your own income. Tax information is for general guidance only — consult a CPA for advice specific to your situation.
Tax rates and thresholds sourced from the Canada Revenue Agency (CRA). Last verified for the 2025 tax year.