CRA overpaid some Canadians in carbon tax payments and wants the money back. Here's how to know if that's you (2025)

Some taxpayers may have received an extra 20% rural supplement in error. The CRA is looking to claw that back

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By Chris Knight

Published Apr 22, 2025

Last updated 5hours ago

2 minute read

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CRA overpaid some Canadians in carbon tax payments and wants the money back. Here's how to know if that's you (1)

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This month, the Canada Revenue Agency is sending out its final Canada Carbon Rebate payments to eligible Canadians. But the CRA has also announced that it may have overpaid some individuals, and it wants that money back.

In the “what has changed” section of its website, it notes: “The CCR rural supplement was paid out to some people who were not entitled to get it. To maintain a fair and equitable tax system, the CRA is required to recover any overpayments or payments made in error.”

The site says affected taxpayers will receive an official notification starting April 15.

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The CRA defines the rural supplement as a 20 per cent top-up for residents of small and rural communities. The agency’s website includes maps of municipal areas so people can determine if they’re eligible for it or not.

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Prince Edward Island is considered one rural community, but the rest of the provinces where the CCR is paid — Alberta, Saskatchewan, Manitoba, Ontario, Newfoundland and Labrador, New Brunswick and Nova Scotia — are divided.

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The rural supplement can be claimed by ticking a box on page two of your income tax forms. National Post has reached out to CRA to determine if errors in self-reporting are the reason for the overpayment, and also how many people are affected.

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The amount of the rural supplement varies from province to province, ranging from $22 for an individual in Nova Scotia to $45.60 in Alberta. Spouses and dependants receive a smaller portion of that amount.

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The final CCR payments are due to go out on April 22, but that could be delayed for anyone who has not yet filed their 2024 taxes. Individuals who file later will receive their final payment once their 2024 return is assessed.

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When Mark Carney became prime minister in March, he signed an order-in-council that ended the consumer carbon tax and, with it, the CCR payment. April 1 marked the end of the tax, and the current payment will be the final one.

Robin Boadway, Emeritus Professor at Queens University, has pointed out that this last payment will actually be for taxes that will never be collected.

“The issue is pretty straightforward,” he told National Post. “The carbon tax rebate was paid in advance of carbon tax revenues being collected. When the carbon tax was terminated, no more revenues were coming in, so there was no longer a basis for continuing the rebate.

“In effect, the upcoming rebate will be for carbon taxes that will not be collected, so the revenues to finance it will have to come from federal government general revenues. So, those persons who are eligible for the rebate will be getting a transfer that is not really a rebate for carbon tax revenues.”

He estimated the cost at between $2.7 billion and $3 billion.

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