In order to accurately reflect the Climate Action Incentive payment provisions under the Income Tax Act (i.e., based on the current rules), this backgrounder was revised on August 15, 2023, to specify that residents of the Census Metropolitan Area of Fredericton are eligible for the rural supplement in 2023-24.
Following the Government of New Brunswick's request in February 2023 that the federal pollution pricing fuel charge replace the province's own fuel charge, the Government of Canada intends to apply the federal backstop fuel charge in New Brunswick as of July 1, 2023. New Brunswick will continue to apply its own provincially-administered fuel charge for industrial emitters.
The Government of Canada does not keep any direct proceeds from pollution pricing. All direct proceeds from the federal fuel charge are returned to the jurisdiction in which they were collected. Currently, the federal pollution pricing fuel charge applies in Alberta, Manitoba, Ontario, Saskatchewan, Yukon and Nunavut and is intended to apply, as of July 1, 2023, in New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador.
Climate Action Incentive Payments
In New Brunswick, 90 per cent of direct proceeds from the federal fuel charge will be returned to residents through quarterly Climate Action Incentive (CAI) payments. The other 10 per cent will be used to support small- and medium-sized businesses and Indigenous groups in New Brunswick.
Residents of New Brunswick will receive two CAI payments in 2023-24: a double payment in October 2023 to return the projected proceeds from the July to September 2023 and October to December 2023 periods, and a single payment in January 2024 to return the projected proceeds from January to March 2024. In April 2024, New Brunswick residents will receive the first of four regular quarterly payments for 2024-25. As is the case in other provinces where the federal fuel charge applies, residents need to file their annual tax return in order to receive their CAI payments.
In jurisdictions where the federal fuel charge is being applied, a 10 per cent rural supplement is provided to eligible individuals and families residing in small and rural communities in recognition of their increased energy needs and reduced access to cleaner transportation options. In New Brunswick, residents living outside of the Census Metropolitan Areas of Moncton and Saint John are eligible for the rural supplement in 2023-24. Given the timing of New Brunswick’s decision to no longer apply its own fuel charge, eligibility for the rural supplement will be confirmed for New Brunswickers when they file their 2023 tax returns, with retroactive payments disbursed next year.
In New Brunswick and other provinces where Canadians receive CAI payments, most households will receive more than they pay as a result of the federal carbon pollution pricing system, with low- and middle-income households benefitting the most.
| Amount ($) | New Brunswick | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| First Adult | $92 | ||||||||||||
| Second Adult | $46 | ||||||||||||
| Each Child | $23 | ||||||||||||
| Payment Dates | October 20232 January 2024 |
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1 In addition to the amounts above, residents of small and rural communities are entitled to an additional 10 per cent supplement. 2 The October 2023 payment is a double payment to return the projected proceeds from the July to September 2023 and October to December 2023 periods. |
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| New Brunswick | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Amount ($) | October 2023 Payment (Double)2 | January 2024 Payment | ||||||||||||
| First Adult | $184 | $92 | ||||||||||||
| Second Adult | $92 | $46 | ||||||||||||
| First Child | $46 | $23 | ||||||||||||
| Second Child | $46 | $23 | ||||||||||||
| Total | $368 | $184 | ||||||||||||
1 In addition to the amounts above, residents of small and rural communities are entitled to an additional 10 per cent supplement. 2 The October 2023 payment is a double payment to return the projected proceeds from the July to September 2023 and October to December 2023 periods. |
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The average cost impact of the federal system and the average CAI payment per household are estimated to be lower in New Brunswick than in other jurisdictions mainly because the predominant heating sources used in the province (e.g., wood and electricity) are not subject to the fuel charge.
These CAI payment amounts are based on projections of fuel charge proceeds for New Brunswick for 2023-24. As actual fuel charge proceeds and the total amount of proceeds returned through CAI payments and other programming may differ from estimated levels, any adjustments required will be made through changes in future CAI payment amounts. This will ensure that direct fuel charge proceeds are fully returned to New Brunswickers.