The carbon tax is designed to bring income to the Canadian economy.
A large portion of the revenue generated by the fuel tax (about 90%) is intended to return it to households through a Canadian carbon discount.
This is designed to offset the increase in costs for individuals, especially low-income families, and the government says most households will receive more rebates than taxes pay.
As of April 1, 2025, the federal carbon and carbon tax was abolished. This means that consumers no longer pay this extra fee on the pump.
Since the fuel tax has ended, the final rebate is not funded by current fuel tax revenue. Essentially, this is the expense of previously collected funds or direct government transfers. This “unique economic scenario” allocates funds that were recovered directly by the mechanism originally designed to provide funding to it. Green Party co-leader Jonathan Pedneault pointed to a politically sensitive opportunity in his recognition of Canadians’ “payments that should be entitled” to mark it as a potential “liberal gift”, a potential “liberal gift.”
While the quarterly discount was initially funded by carbon tax revenue, it ended in part effectively operated as a government transfer as no new fuel fee was charged to cover it.
Finance Canada has remained silent on the total cost of the final expenditure, reducing repeated requests from Canadian news outlet CBC News for disclosure.
Despite ending the fuel tax, a Canadian Financial Corporation spokesman would continue to pay as an “affordable measure”, saying Canadian households, especially those with lower incomes, rely on kickbacks this April.
Although the total cost of the final rebate remains undisclosed, Canadian Financial Corporation has issued a specific amount that eligible adults will receive in participating provinces.
These range from $110 in Prince Edward Island and Nova Scotia to $228 in Alberta, with 20% of rural supplements being qualified recipients.
Small businesses eligible for Canadian carbon discounts will still receive reimbursement for carbon taxes paid in the past year, with Canadian Finance outlining plans to return C$623.1 million in 2024-25 annual revenue.
