Alberta changes carbon tax rebates after bereaved families get repayment demands

EDMONTON -- Alberta is bringing in new rules to make amends to 4,400 families who lost a loved one and were ordered to pay back their carbon tax rebate.

"For a relatively small number of families, the program didn't work as it should have," Finance Minister Joe Ceci said Wednesday.

"These families received bluntly worded letters from the Canada Revenue Agency asking them to repay all or part of the rebate because the death of a loved one changed their eligibility.

"Grieving families should not face the indignity of a collection letter demanding the repayment of a benefit that is supposed to make their lives better."

Ceci made the changes in a tax statutes amendment bill introduced in the legislature Wednesday afternoon.

The province will no longer seek the return of rebates due to death. Those received the rebate on behalf of a loved one and paid it back will be reimbursed.

All rebates will be dispatched quarterly. Some smaller amounts had been paid out in a lump sum.

The payouts are tied to a broad-based carbon tax the province introduced Jan. 1 which increased costs at gasoline pumps and on home heating bills. The tax is intended to pay for initiatives and programs to move Alberta to a more environmentally friendly economy.

Middle- and low-income earners -- about six in 10 households -- receive rebates on a sliding scale to give them incentives to go green, but they're not punished if they don't.

In January, the province delivered some lump sum rebates in a program administered through the Canada Revenue Agency. By March, some Albertans were saying they were receiving collection letters from Ottawa demanding repayment after a death.

There were stories of a collection demand on a cancer-stricken mom who used her $180 carbon tax rebate to buy gifts for her kids before she died.

A senior whose wife died said he got a letter demanding he return the carbon tax rebate she had received.

A daughter taking care of the estate of her deceased mother received a notice to repay the $100 rebate.

Ceci said he has spoken personally with some of those affected.

"I want them to know we understand their frustration," he said. "As soon as we became aware of this issue in March, we took action."

Ceci said the Canada Revenue Agency was doing its job properly in sending out the letters and the fault lay with his department.

"I had not anticipated that."

The government says 1.2 million carbon levy repayments totalling $150 million have been sent out so far this year.

Eligibility is based on household income and the number of people in a home. Data comes from personal income tax information.

Rebates are issued in January, April, July, and October and the minimum rebate entitlement is $100.