Climate Action Incentive (CAI)

Updated: 2023-03-03

Climate Action Incentive (CAI) payments are designed to return the proceeds from the fuel charge to residents of the provinces who use the federal system of carbon pollution pricing.

CAI payments apply to the following provinces for the following years:

Alberta 2020 onward (tax returns for 2019 and later)
Manitoba 2019 onward (tax returns for 2018 and later)
New Brunswick 2019 only (2018 tax returns only)
Ontario 2019 onward (tax returns for 2018 and later)
Saskatchewan 2019 onward (tax returns for 2018 and later)

For 2018 through 2020 tax returns, residents of those provinces applied for the CAI as a refundable tax credit on Schedule 14 when preparing their T1 personal tax return. TaxCycle T1 calculated and optimized these payments.

For 2021 tax returns and onward, the government is changing the program to deliver payments on a quarterly basis. CAI payments will be delivered at the beginning of each quarter. Payments will start in July 2022 with a “double-up” payment. This payment would return proceeds from the first two quarters of the 2022-23 fuel charge year (April 2022 to March 2023). The CRA will determine the actual payments for each quarter based on the information they have on file at the time.

For the most recent information see the CRA page Climate action incentive payment.

Payment Amounts

A list of the CAI payment amounts for 2022-23 appears in this report from the Department of Finance.

A supplementary amount will be provided for eligible individuals and families residing outside a census metropolitan area, as defined by Statistics Canada. This supplement increases the baseline amount by 10%.

Census Metropolitan Areas (CMA)

For the purpose of the CAI supplement for residents of small and rural communities, individuals must have resided outside of a census metropolitan area (CMA) on December 31 of the tax year, as defined by Statistics Canada in the last census published.

To confirm whether a person lives in a CMA, visit the CRA's page Find out if you qualify for the supplement for residents of small and rural communities or call 1-800-959-8281. 

Individuals cannot claim the supplement for residents of small and rural communities if their principal place of residence was located in one of the following CMAs:

  • Alberta: Calgary, Edmonton or Lethbridge
  • Manitoba: Winnipeg
  • New Brunswick: Moncton or Saint John
  • Ontario: Barrie, Belleville, Brantford, Greater Sudbury, Guelph, Hamilton, Kingston, Kitchener-Cambridge- Waterloo, London, Oshawa, the Ontario part of Ottawa-Gatineau, Peterborough, St. Catharines-Niagara, Thunder Bay, Toronto, or Windsor
  • Saskatchewan: Saskatoon or Regina

CAI Fields on the Info Worksheet

If the taxpayer is a resident of one of the applicable provinces, additional questions appear in the Credits section on the Info worksheet. These questions must be completed to determine the eligibility of the taxpayer and spouse to claim the CAI credit.

Screen Capture: 2022 CWB and CAI Questions on the Info worksheet

Climate Action Incentive (previously Schedule 14) in TaxCycle

TaxCycle will automatically display the Climate Action Incentive worksheet (previously Schedule 14) for residents of the applicable provinces (Alberta, Ontario, New Brunswick, Manitoba and Saskatchewan).

For 2018 through 2020 tax returns, Schedule 14 calculates the total CAI and then transfers to line 449 of the T1 jacket. The Optimizations worksheet also includes fields to adjust who claims the CAI in coupled returns.

For 2021 tax returns onward, the Climate Action Incentive worksheet:

  1. Only contains instructions and a question about whether the client resides outside a census metropolitan area (CMA). This detail appears at the top of the form in TaxCycle. Check the box only if the taxpayer meets these criteria.
  2. The rest of the form displays a calculation of the estimated quarterly payments for the fiscal year, including a breakdown by quarter.
  3. For couples, check the box to indicate who is expected to receive the payments for the year. Only one person can receive the credit for the family. The credit will be paid to the spouse or common-law partner whose tax return is assessed first. No matter which person receives the payments, the total amount will be the same.
  4. The form also includes fields for indicating the Qualified dependants. Answer Yes next to a dependant’s name to include the amount for qualified dependants in the calculation. 
  5. If the dependant is in shared custody and you indicate this on the Dependant (Dep) worksheet (in the Count for CCB and GST credits? field), TaxCycle automatically answers Yes to the Shared custody field and adjusts the calculation accordingly.
  6. The table of estimated payments and the section for qualified dependants are on-screen only and will not print by default when you print the form. To print a version that includes the estimate, select the Print as appears on screen check box in Printer and PDF Output Options
  7. The client letters also include the estimated total amount of CAIP, as well as a monthly breakdown of the anticipated payments.

Screen Capture: Climate Action Incentive (CAI) worksheet in TaxCycle