Carbon price jumps to $65/tonne but rebates will also rise for millions of households

Canada's national carbon price saw its largest hike yet today when it jumped from $50 per tonne of emissions to $65. But the rebates millions of households receive to compensate them for the surcharge are also set to rise.

Usually, the national price increases annually by $10. This year, under the federal government's strengthened climate plan, it's rising by $15.

Because carbon pricing differs from province to province and territory to territory, not everyone will feel the impact of this increase the same way.

In places where the federal carbon pricing system applies, Canadians will see an increase to the fuel charge — what's known as the carbon tax — while heavy emitters will see increases through their output-based pricing systems. 

This month's increase will add an extra three cents per litre at the pump for Canadians who live in Ontario and all of the Prairie provinces, says the Canadian Taxpayers Federation.

The federation estimates that after the increase, the total impact of carbon pricing will amount to an extra 14 cents per litre of gasoline, another 12 cents per cubic metre of natural gas and another 17 cents per litre of diesel.

Environment Minister Steven Guilbeault said most families who live in provinces where the federal fuel charge applies will get "more money back than what they pay."

That's because the price per tonne of greenhouse gas emission rises with the Climate Incentive Action Payments.

Guilbeault said higher-income households won't get back as much. 

"People like me who are better off … we will be paying more and that's how the system is designed," Guilbeault told CBC News.

According to Finance Canada numbers provided to CBC News, this is what a family of four will receive each quarter from the Climate Incentive Action Payments starting this month: 

Residents in small and rural communities receive a 10 per cent top-up to their rebates.

In November, the federal government announced that Nova Scotia, Prince Edward Island and Newfoundland and Labrador now fall under the federal fuel charge. But their levies and rebates won't start until the summer. Here's what Ottawa says a family of four will receive in rebates each quarter starting in July.

The logic behind carbon pricing is to incrementally make fossil fuels, which drive climate change, more expensive, making it relatively cheaper for individuals to choose low-carbon options, like electric vehicles or heat pumps.