Federal Carbon Tax

What is the Government of Canada's Federal Carbon Tax?

The Federal Carbon Tax is part of the government's carbon pollution pricing system. It applies to fuels emitting greenhouse gases when combusted, including natural gas. It took effect in Alberta on January 1, 2020, and will increase every April 1 after that until 2030. To learn more, see our FAQs below.

Who must pay the carbon tax?

The Federal Carbon Tax applies to all customers that consume natural gas. Regardless of your energy provider, you'll see the tax on your natural gas bill. We have a separate line on our bills to show you exactly how much money the federal government collects based on how much natural gas you've used. You will continue to see this charge in the Distributor and Government Charges section on your natural gas bill as "Federal Carbon Tax."

How much will I be charged on my monthly bill?

On April 1, 2024, the Federal Carbon Tax rate increased from $3.327/GJ to $4.095/GJ. How much you pay is determined by how much natural gas you use. In Alberta, the average household consumes about 120 GJs per year. That estimate shows that the annual cost of the carbon tax on natural gas bills will increase by about $92.

Remember that your monthly natural gas consumption changes depending on the season, with the highest consumption falling in the cold winter months.

Dates	$/Carbon tonne	Rate ($/GJ)
April 1, 2022 - March 31, 2023	$50	$2.629
April 1, 2023 - March 31, 2024	$65	$3.327
April 1, 2024 - March 31, 2025	$80	$4.095

Is this a Direct Energy Tax?

No, the Federal Carbon Tax is not a Direct Energy Tax. All Albertans will pay the tax no matter who their provider is. However, Albertans will be eligible for a Canada Carbon Rebate (previously known as the Climate action incentive payment) which is administered through the income tax system.

Learn more about the Canada Carbon Rebate.

Where will I see the charge on my bill?

You will continue to see this charge in the Distributor and Government Charges section on your natural gas bill as "Federal Carbon Tax."

Where does the money I am paying for the Federal Carbon Tax go? Does Direct Energy keep it?

All funds collected through the Federal Carbon Tax go to the Government of Canada. Then, the government will return all proceeds through direct payments to families and direct investments to reduce emissions.

Learn more about Canada’s carbon pollution pricing system.

Do I have to pay the Federal Carbon Tax?

All Albertans will pay the Federal Carbon Tax. However, many Albertans are eligible for the Canada Carbon Rebate from the federal government through their personal income tax returns.

Learn more about Canada’s carbon pollution pricing system.

What is the Canada Carbon Rebate (CCR)?

Canada Carbon Rebate (CCR) was previously known as the Climate action incentive payment (CAIP). Eligible individuals and families receive this tax-free amount to offset the cost of the federal pollution pricing. If you have a child that is already registered for the Canada child benefit (CCB), a credit for each eligible child will be included in the calculation of the CCR. Find out if you are eligible for this payment.

How much will I receive from the Canada Carbon Rebate (CCR)?

The CCR amount you receive varies according to the number of dependents in your family and the province you live in.

Starting in April 2024, the base amount in Alberta is:

$225 for an individual
$112.50 for a spouse or common-law partner
$56.25 per child under 19
$112.50 for the first child in a single-parent family

The rural supplement is:

$45 for an individual
$22.50 for a spouse or common-law partner
$11.25 per child under 19
$22.50 for the first child in a single-parent family

The rural supplement has increased from 10% to 20% of the base amount. However, this increase is still pending Royal Assent. If you would like to claim the rural supplement, you will need to tick the box on page 2 of your income tax and benefit return. Find out more information about the rural supplement here.

When will I receive the Canada Carbon Rebate (CCR)?

If you’re eligible for the CCR, you can expect to receive your payments on the April 15, July 15, October 15 and January 15.

Learn more about upcoming CCR payments.

Who do I talk to if I have specific questions about the Federal Carbon Tax?

For questions about the Federal Carbon Tax, contact the regional Prairies Office at 1-866-439-4202.

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