Canada’s federal carbon tax in 2024 charged $80 per tonne of CO2 equivalent, which worked out to about 17.61 cents per litre on gasoline, 21.39 cents on diesel, 12.38 cents on propane, and 15.25 cents per cubic metre on natural gas. Most households in the eight covered provinces got the money back through the quarterly Canada Carbon Rebate. That consumer tax no longer exists: the federal government set all fuel charge rates to zero on April 1, 2025, and the final rebate payment went out the same month.
What the 2024 Rates Added to Fuel and Heating
The federal fuel charge rose from $65 to $80 per tonne of CO2 equivalent on April 1, 2024, part of a planned annual escalation originally designed to reach $170 per tonne by 2030. Each fuel type carried a rate based on its carbon intensity, so dirtier fuels cost more per unit.
For the April 2024 through March 2025 period, the rates were:
- Gasoline: 17.61 cents per litre
- Diesel (light fuel oil): 21.39 cents per litre
- Propane: 12.38 cents per litre
- Marketable natural gas: 15.25 cents per cubic metre
Those rates applied in every province covered by the federal backstop. A household heating with natural gas in Ontario or Saskatchewan saw the charge on every cubic metre consumed, and drivers in Alberta paid it on every litre at the pump.1Canada Revenue Agency. Fuel Charge Rates
The charge itself was collected from fuel producers, distributors, and importers where fuel entered the supply chain. They passed it along to consumers through retail prices. Individual households never filed a separate carbon tax return; the cost was built into what they paid for fuel and heating.
How the Canada Carbon Rebate Worked in 2024
The government returned most of the fuel charge revenue directly to households through the Canada Carbon Rebate. Payments went out four times a year, in April, July, October, and January, by direct deposit or cheque. Every resident who filed an annual income tax return in a province covered by the federal fuel charge qualified automatically, regardless of income.2Canada Revenue Agency. Canada Carbon Rebate (CCR) for Individuals – How Much the Payment Amounts Were
How much a household received depended on where it lived. For a family of four, the quarterly payment in 2024–25 ranged from $190 in New Brunswick to $450 in Alberta. Saskatchewan families received $376, and Ontario families got $280.3Department of Finance Canada. Canada Carbon Rebate Amounts for 2024-25 Residents of small and rural communities received a 20% supplement on top of those amounts, because they typically have fewer alternatives to fossil fuels and higher transportation costs.4Canada Revenue Agency. Supplement for Residents of Small and Rural Communities
The stated goal was for most households, particularly lower- and middle-income ones, to get back more in rebates than they paid through higher fuel costs. There was no income threshold and no phase-out, so a high-income household received the same base amount as a lower-income one in the same province.
Which Provinces the Tax Applied In
The federal fuel charge acted as a backstop in provinces that did not run their own equivalent consumer carbon pricing. For the 2024–25 fiscal year, the eight provinces covered were Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador.3Department of Finance Canada. Canada Carbon Rebate Amounts for 2024-25
British Columbia and Quebec were not covered by the federal charge. British Columbia had its own long-standing provincial carbon tax, and Quebec uses a cap-and-trade system linked with California’s market. Both were deemed equivalent to the federal standard.
The Consumer Carbon Tax Ended April 1, 2025
On April 1, 2025, the federal government set all fuel charge rates to zero, ending the consumer carbon tax. The requirement for provinces and territories to maintain a consumer-facing carbon price was removed at the same time.5Department of Finance Canada. Removing the Consumer Carbon Price, Effective April 1, 2025 British Columbia dropped its own provincial carbon tax rate to zero on the same day, removing roughly 17 cents per litre from fuel costs in that province.6Government of British Columbia. B.C. Eliminates Carbon Tax
The Canada Carbon Rebate ended with the fuel charge. The April 2025 payment was the final one, and no further quarterly payments are scheduled.7Canada Revenue Agency. Closed – Canada Carbon Rebate (CCR) for Individuals Canadian households and small businesses no longer pay a consumer-level carbon charge on fuel or heating.
Industrial Carbon Pricing Still Exists
The end of the consumer tax did not end all carbon pricing in Canada. Heavy industrial operations fall under a separate framework called the Output-Based Pricing System. Facilities emitting 50,000 tonnes or more of CO2 equivalent per year are automatically covered, and smaller facilities emitting at least 10,000 tonnes can volunteer to participate.8International Carbon Action Partnership. Canada Federal Output-Based Pricing System Rather than paying the straight fuel charge, these emitters are measured against a performance standard for their industry and owe money only on emissions that exceed that benchmark. Facilities that beat the standard earn surplus credits they can sell or bank.9Environment and Climate Change Canada. Output-Based Pricing System
The industrial carbon price rose to $95 per tonne in 2025 and is scheduled to keep increasing by $15 per year toward $170 per tonne by 2030.10International Carbon Action Partnership. Canada Federal Output-Based Pricing System As of 2025, the federal system applies in Manitoba, Prince Edward Island, Yukon, and Nunavut. Alberta, Ontario, Nova Scotia, New Brunswick, and Newfoundland and Labrador run their own industrial carbon pricing systems that meet the federal standard.11Government of Canada. Carbon Pricing Systems Across Canada Consumers no longer see a carbon charge at the pump or on their heating bills, but factories, refineries, and power plants above the emissions threshold still face a rising price on their emissions.