Climate Action Incentive Payment

If you’ve ever been surprised by a deposit labeled “Canada CAIP” in your bank account, you’re not alone. The Climate Action Incentive Payment (CAIP) is a tax-free benefit intended to return proceeds from carbon pricing directly to households. But few Canadians fully understand why they receive it, how it’s calculated, or what role it plays in their broader financial plan.

This matters when you're planning cash flow, managing a household on a fixed income, or navigating the tax implications of living in a province with carbon pricing. Whether you're early in your career, supporting a family, or adjusting to retirement, the CAIP is a meaningful part of your financial landscape.

What Is the Climate Action Incentive Payment?

The CAIP is a quarterly tax-free payment issued by the federal government to residents of provinces where the federal carbon pricing system applies. Its purpose is to offset the costs associated with carbon pricing on fuels and heating, such as gasoline, natural gas, or propane.

It is part of the federal government’s "revenue-neutral" carbon pricing approach. The idea is simple: carbon pricing creates an incentive to reduce emissions, and the money collected is returned directly to households.

You do not need to apply separately for the CAIP. Eligibility and payments are automatically determined when you file your annual tax return.

Currently, the CAIP is available to residents of the following provinces:

• Alberta

• Saskatchewan

• Manitoba

• Ontario

• New Brunswick

• Nova Scotia

• Prince Edward Island

• Newfoundland and Labrador

Provinces or territories with their own approved carbon pricing systems (such as British Columbia or Quebec) do not receive the CAIP.

Who Is Eligible for the CAIP?

To receive the CAIP, you must:

• Be a Canadian resident for income tax purposes at the beginning of the payment month

• Reside in a qualifying province during that month

• Be at least 19 years old, or younger if you are married or have a child

• File an income tax return, even if you have no income

If you have a spouse or common-law partner, only one of you will receive the payment for the household. The CRA will direct the payment to the person whose return is assessed first. Children under 19 are included in the household calculation if you are the primary caregiver.

This becomes especially important if your household situation changes, such as a separation, a new child, or a move to a different province. These events can affect your eligibility and payment structure.

How Much Will You Receive?

The base CAIP payment includes a fixed amount for:

• The individual or couple

• Each child under the age of 19

The total amount varies by province, and the payments are adjusted annually for inflation. For the 2024–2025 payment year, here are sample estimates of annual CAIP amounts by province:

These values are based on federal estimates and are rounded for clarity. Actual payment amounts may vary depending on household structure, rural supplement eligibility, and CRA adjustments.

If you live in a rural area (outside a census metropolitan area), you may receive a 10 percent rural supplement to reflect the higher costs of heating and transportation.

When Are Payments Issued?

CAIP payments are issued quarterly, typically in:

• April

• July

• October

• January

These payments are made separately from your tax refund or other government benefits. They appear as “Canada CAIP”in your bank account if you are enrolled for direct deposit with the CRA.

If you are not enrolled in direct deposit, you will receive a cheque by mail. Delays in filing your tax return or updating your marital status or address can delay the payment.

What If You Did Not Receive a CAIP Payment?

If you believe you are eligible but have not received a payment, here are common reasons why:

• You did not file a tax return. Filing is required even if you had no income.

• You recently moved. The CRA might not yet recognize your new province as eligible.

• You are not listed as the primary caregiver for your children.

• You did not enroll in direct deposit. Paper cheques can take longer and may be delayed if your address has changed.

Use the CRA’s My Account service to confirm your payment status, check your registered address, and update your direct deposit information.

At Optimize, we help ensure your financial plan accounts for all tax-free income sources, including credits like the CAIP that may otherwise be overlooked. We also help you prepare for and track provincial differences if you are relocating.