Residents can get carbon tax refund on 2018 return

January 10, 2019 11:03 am

Saskatchewan and Manitoba residents will be able to claim rebates from the carbon tax for 2019 when they file their 2018 taxes this year, even though the carbon tax doesn't come into effect until April of this year.

Starting in April, Saskatchewan and Manitoba will be subject to a carbon tax on natural gas and electricity production, to be collected from producers and distributors. It’s expected the cost — starting at roughly four cents a litre on gasoline — will be passed on to consumers.

A rebate of roughly $600 in 2019 (rising to just above $1,400 in 2022) is being provided at tax time to a family of four in Saskatchewan ($305 per single adult or first adult in a couple, $152 for the second adult in a couple or the first child of a single parent, and $76 for each child under 18).

A smaller rebate will be offered in Manitoba, because there is less expected impact, because of the amount of hydroelectricity produced in the province. There, a typical family will receive $339 with their tax refund this spring--$170 for a single adult or the first adult in a couple, $85 for the second adult in a couple or the first child of a single parent, and $42 for each child under 18.

In both provinces, those living outside of metropolitan areas, because of geography and lack of transit access, will be given an additional 10 per cent.

By allowing residents to claim the 2019 rebate in the 2018 tax year, the federal government is essentially allowing individuals to claim a rebate on a tax that has not yet come into effect.

“Imagine how that works,” said Environment Minister Dustin Duncan. “I really don’t understand the logic of submitting rebates to individuals across the country before you actually pay the tax. I thought you paid the tax and then the rebate money comes from that — so again, this shows it’s not a climate change plan, it’s a taxation plan.”

The Saskatchewan government has previously accused the federal government of “vote buying” with the rebates.

On Wednesday, Duncan warned people should be concerned because businesses will largely be paying the carbon tax, but it is unclear what benefits or rebates they will receive as a result.

But that doesn’t mean he won’t be taking the money — which is not tied to income, but based on household size — when he files his taxes this year.

“I don’t know, I suppose I will be, yes, that’s a good question,” he said, when asked if he would claim it. “I actually hadn’t thought about it that way. I think people can decide what they can do with their tax.”

Prior to imposing the tax on Saskatchewan, the federal government committed itself to returning “all of the money” collected from a carbon tax back to residents, and putting its backstop into effect on Jan. 1.

But the start date has been pushed back four months, to allow affected governments and industries to prepare, with 90 per cent of all the money being returned directly to Canadians affected by it.

The remaining 10 per cent will be handed out to small and medium-sized businesses, schools, hospitals and other organizations that can’t pass on their costs from the carbon tax directly to consumers. Details of that program are not yet available.

Ottawa required all provinces to put a minimum price on pollution of $20 a tonne of emissions by Jan. 1. Saskatchewan, Manitoba, Ontario and New Brunswick did not and will be subject to Ottawa’s plan, which anticipates collecting more than $2.3 billion in carbon taxes.