Climate Action Incentives in Canada: Tax Credits, Grants & Rebates (2025 Guide)

Canada’s fight against climate change includes a powerful set of climate action incentives for individuals, homeowners, and businesses. From the federal Climate Action Incentive (CAI) cash payments, to tax credits for electric vehicles, home energy retrofits, and business clean tech investments, there are more opportunities than ever to reduce your carbon footprint—and your tax bill. This comprehensive 2025 guide covers every major Canadian climate action incentive: eligibility, how to claim, and expert tips for maximizing your refund or rebate.

What’s Covered: Federal & provincial climate incentives, CAI payments, green home upgrades, EV tax credits, business clean tech, energy rebates, and application tips
Who’s Eligible: Individuals, families, homeowners, renters, businesses, and non-profits
Quick Links: CAI Payments, Green Homes, EV Credits, Business, Provinces

For in-depth business and home guides, see: Business Tax Credits | Home Buyers Incentives

A Canadian family charging an electric car at home with solar panels, illustrating climate action incentives and rebates

Climate Action Incentive (CAI) Payments: Federal Carbon Tax Rebates

What is CAI? The Climate Action Incentive is a quarterly, tax-free cash payment for residents of provinces where the federal carbon tax applies: Ontario, Alberta, Manitoba, Saskatchewan, Newfoundland & Labrador, Nova Scotia, New Brunswick, and PEI.
Who Qualifies? Individuals and families who file an income tax return and reside in an eligible province. You do not need to apply—just file your taxes.
How Much? Payment amounts depend on province and family size (single, couple, children), with supplements for rural residents. Amounts are indexed and updated annually.
When Are Payments Made? Quarterly: April, July, October, January.
Tip: If you do not receive the payment, check your return for errors or contact the CRA.
Resource: CRA CAI Payment Amounts

Note: The CAI replaces the former "climate action incentive tax credit" previously claimed on your tax return.

Green Home Upgrades: Grants, Tax Credits & Rebates for Homeowners

Canada Greener Homes Grant: Up to $5,000 in grants for eligible energy efficiency retrofits (insulation, windows, doors, heat pumps, solar panels, etc.). Also covers up to $600 for home energy audit costs.
Canada Greener Homes Loan: Interest-free loans up to $40,000 to finance eligible green upgrades for principal residences.
Home Accessibility Tax Credit: Up to $3,000 non-refundable federal credit for home modifications that improve accessibility (e.g., ramps, walk-in showers, stairlifts).
Provincial/Municipal Top-Ups: Ontario, BC, Quebec, and many cities offer additional rebates or grants for heat pumps, insulation, home energy retrofits, and solar. See Provincial Programs below.
How to Claim: Most grants require a pre- and post-retrofit energy audit by a certified advisor and completing the application through the federal program or provincial utility.
Resource: Canada Greener Homes Grant

Tip: Stack federal and provincial/utility rebates—some upgrades can be partially or fully paid for with combined programs!

Electric Vehicle (EV) & Zero-Emission Vehicle (ZEV) Incentives

Federal iZEV Program: Up to $5,000 rebate on eligible new battery electric (BEV), plug-in hybrid (PHEV), and hydrogen fuel cell vehicles. Applies at point of sale through participating dealers.
Provincial Top-Ups: BC (up to $4,000), Quebec (up to $7,000), Nova Scotia, PEI, and Newfoundland offer additional rebates for eligible EVs; Ontario offers up to $5,000 for home chargers (no vehicle rebate as of 2025).
EV Charging Station Rebates: Many provinces/utilities provide rebates (up to $1,000+) for installing home or business charging stations.
How to Claim: Federal rebates are applied by the dealer at purchase; provincial/utility rebates may require a separate application with proof of purchase/installation.
Resource: iZEV Program

Note: Vehicles must be on the eligibility list and below maximum MSRP. Rebates are for new vehicles only.

Business Climate Action Incentives: Clean Tech, Green Investment & Energy Efficiency

Climate Action Incentive Fund (CAIF): Direct funding for small and medium-sized businesses in eligible provinces (federal carbon tax) to cover up to 25% of eligible energy efficiency or clean tech upgrades (max $250,000).
Clean Technology Investment Tax Credit: New refundable tax credit (up to 30%) for businesses investing in eligible clean technology manufacturing, renewable energy, or carbon capture projects.
Zero-Emission Vehicle (ZEV) CCA: Businesses can claim accelerated Capital Cost Allowance (up to 100% in year 1) for eligible EVs and equipment.
Greenhouse Gas (GHG) Reduction Programs: Grants, rebates, and loans for emissions reduction projects in agriculture, manufacturing, and industrial sectors—varies by province.
Energy Efficiency Rebates: Provincial utilities and municipalities offer rebates for lighting, HVAC, building envelope, and process upgrades.
How to Claim: Varies—some credits are claimed on your tax return, others require application before/after project completion.
Resource: CAIF Info

Pro Tip: Stackable with SR&ED, federal/provincial R&D, and other business tax credits. See our Business Tax Credits guide.

Provincial & Utility Climate Incentive Programs (Highlights)

Ontario: Home Efficiency Rebate Plus (up to $10,000), Enbridge Gas rebates for insulation, heat pumps, and energy audits. Municipal green home grants available.
British Columbia: CleanBC rebates for heat pumps, insulation, windows, and EVs; BC Hydro business incentives; PST exemption for select energy-efficient equipment.
Quebec: Chauffez Vert program (heat pumps, geothermal); Roulez vert EV rebates; energy efficiency grants for businesses and multi-unit dwellings.
Alberta: Emissions Reduction Alberta grants for businesses; municipal home energy rebates in Edmonton, Calgary; past provincial programs may return.

Atlantic Canada: Nova Scotia Home Energy Assessment & Efficiency Nova Scotia rebates; PEI energy efficiency grants; Newfoundland EV and heat pump rebates.
Manitoba/Saskatchewan: Efficiency Manitoba and SaskPower offer home/business energy rebates and audits.
Indigenous Communities: Dedicated energy retrofits and clean energy funding available through Indigenous Services Canada and provincial programs.
Utilities: Most major utilities (Hydro Quebec, BC Hydro, Enbridge, etc.) offer additional rebates for appliances, lighting, and heating upgrades.

For province-specific guides, visit: Ontario | BC | Quebec | Alberta

How to Claim: Application & Documentation Tips

CAI Payments: File your income tax return with accurate address and family details. No separate application—payment is automatic for eligible provinces.
Home/EV Rebates: Keep all receipts, invoices, pre- and post-project photos, and energy audit reports. Apply through the federal, provincial, or utility program as directed.
Business Credits: Track project costs, contracts, and energy savings data. Apply for funding before starting major projects when required.
Stacking Programs: Always check if you can combine federal, provincial, and utility incentives—many programs allow stacking.
Deadlines: Most rebates must be claimed within 6–12 months of purchase/installation. Tax credits are claimed on your annual return.
Professional Advice: For large projects or multi-family/commercial retrofits, consult a certified energy advisor or tax professional to maximize incentives.

Frequently Asked Questions: Climate Action Incentives in Canada

Do renters qualify for CAI payments?

Yes. All residents of eligible provinces receive CAI payments based on family size and rural/urban status, regardless of whether they own or rent their home.

Can I stack federal and provincial green home rebates?

In most cases, yes. Many provinces and utilities allow you to combine their rebates with the federal Greener Homes Grant or Loan. Always confirm before starting your project.

Are EV rebates available for used vehicles?

Federal iZEV rebates are for new vehicles only, but some provinces (e.g., Quebec, BC) offer limited rebates for used EVs. Check your province’s program details.

How do businesses claim the Clean Technology Investment Tax Credit?

Eligible businesses claim the credit on their federal corporate tax return. For large projects or multi-phase investments, consult a tax professional to ensure compliance and maximize stacking with other credits.

What if I missed a rebate or credit in a previous year?

Some rebates or grants can be claimed retroactively if within the program’s window. For missed tax credits, you can file an adjustment (T1-ADJ or T2-ADJ) for up to 10 previous years.

Are there climate action incentives for Indigenous communities?

Yes. Dedicated federal and provincial funding exists for Indigenous communities, businesses, and individuals, including home retrofits, clean energy, and infrastructure upgrades. See your band office or Indigenous Services Canada for details.

Related Guides & Resources

For province-specific tax break guides:
Ontario | BC | Quebec | Alberta

For government program details: Canada Greener Homes | iZEV Program