Overview

The carbon levy is a tax on transportation and heating fuels.

Carbon Levy

The carbon levy is applied to diesel, gasoline, natural gas and propane at the gas station and on heating bills. It does not apply to electricity.

Certain fuels, such as marked gasoline and marked diesel used in farming operations, are exempt.

The levy rate is based on the amount of carbon pollution that is released by the fuel when it is combusted, not the mass of the fuel itself.

Table 1. Carbon levy on major fuels

Type of Fuel 2019 rate ($30/tonne)
Marked farm fuels Exempt
Diesel 8.03 ¢/L
Gasoline 6.73 ¢/L
Natural Gas 1.517 $/GJ
Propane 4.62 ¢/L
Source: Alberta Climate Change Office
See the complete carbon levy rates table.

Carbon levy household rebates

Single Albertans who earn less than $47,500/year and families who earn less than $95,000/year receive a rebate to help offset costs associated with the carbon levy.

Eligibility

Rebates are based on your family net income and the number of people in your household. It’s not tied to energy use.

To receive a rebate automatically you must:

  • be an Alberta resident
  • file a tax return
  • meet the income criteria

Table 3. Rebate income criteria

  2019
Rebate amounts First adult $300
Spouse/Equivalent to spouse $150
Each child (maximum 4) $45
Maximum family net income to receive full rebate Single $47,500
Couple/Single parent $95,000
Families $95,000
Phase-out rates Single 2.67%
Couple/Single parent 4.00%
Families 4.00%
Source: Alberta Treasury Board and Finance

Payments

Household rebates will be mailed or deposited directly by the Canada Revenue Agency (CRA) in 4 quarterly payments: January, April, July and October.

If you have a spouse or common-law partner, the rebate will be paid to the person whose tax return is assessed first.

The CRA is administering the carbon levy rebate program on our behalf. For more information about receiving the rebate, visit the CRA website or call 1-800-959-2809.

Table 4. Maximum quarterly payment amounts

  2018-19 benefit year 2019-20 benefit year
  Jan 2019 Apr 2019 Jul 2019 Oct 2019 Jan 2020 Apr 2020
First adult $75 $75 $75 $75 $75 $75
Spouse/equivalent to spouse $37.50 $37.50 $37.50 $37.50 $37.50 $37.50
Each child (max 4) $11.25 $11.25 $11.25 $11.25 $11.25 $11.25
Source: Alberta Treasury Board and Finance

CRA will use your 2018 tax return to calculate rebates for the 2019-20 benefit year. Payment information will be sent to you in July 2019. If the quarterly rebate for your household is less than $25, you will not get a payment.

Changes in household status

The CRA reassesses eligibility on a regular basis, as updated household information is received.

  • If your household qualifies for a greater rebate than what was originally paid, the CRA will issue an additional payment for the difference.
  • If your household qualifies for a smaller rebate, or no rebate, you will receive a letter from CRA indicating the amount you will have to return. To find out how to return payments, contact the CRA at 1-800-959-2809.

If your household receives a rebate for a family member who has died, the amount owing will be forgiven so the rebate will not have to be returned.

Support for businesses administering the carbon levy

Registration forms, guides and instructional videos are available for businesses that are responsible for remitting the carbon levy.

See carbon levy information from Tax and Revenue Administration.

Farm fuel exemption

The carbon levy does not apply to marked diesel or marked gasoline used in farming operations.

The farm fuel carbon levy exemption uses the same eligibility criteria as the Alberta Farm Fuel Benefit (AFFB) fuel tax exemption. The AFFB registration number will also be used for the carbon levy exemption certificate.

For more information, see:

Carbon levy exemptions

In addition to marked farm fuel, some other fuels are exempt from the carbon levy, including the following:

  • purchases of fuel on reserves or at other prescribed locations by eligible First Nations and individuals for band or personal use (see Alberta Indian Tax Exemption)
  • marked gasoline and marked diesel used by farmers in farming operations (see Alberta Farm Fuel Benefit)
  • biofuels, including biomethane, biodiesel and ethanol
  • aviation fuel used for eligible inter-jurisdictional flights
  • fuel sold for export
  • fuel used in industrial processes where the fuel is not combusted
  • eligible fuel used in a production process by small conventional oil and gas producers (until January 1, 2023)
  • eligible fuel used on sites subject to the Specified Gas Emitters Regulation (SGER)/Carbon Competitiveness Incentive Regulation

Exemptions are administered by Tax and Revenue Administration. For more information, including publications and forms, see: Carbon Levy - Exemptions.

Large industrial emitters

Large Industrial Emitters transitioned from the Specified Gas Emitters Regulation (SGER) framework to the Carbon Competitiveness Incentives program on January 1, 2018.