Millions of Canadians will receive payments from the federal government days before the April 28 election, reimbursing them ahead of time for a carbon levy they no longer have to pay.

In all, the federal government will distribute close to $4-billion to roughly 13 million Canadians under the Canada Carbon Rebate. Only Canadians who have filed a tax return before April 2 will get the rebate ahead of the election, with the rest receiving the benefit after their 2024 return is assessed, according to the Canada Revenue Agency.

In eight participating provinces, the money is being sent to individuals and families to offset the cost of federal pollution pricing that no longer exists, since Ottawa removed the federal fuel charge on April 1. The amount of the payment depends on a household’s size and where they live. For example, a family of four stands to receive an amount between $220 (in Nova Scotia and Prince Edward Island) and $456 (in Alberta). Residents outside of Quebec, B.C., and the territories are eligible.

Robin Boadway, a professor emeritus of economics at Queen’s University, said continuing the rebates will contribute to the federal deficit but “doesn’t serve any kind of fiscal or tax policy purpose.

“It really fulfills a political objective of buying goodwill. Certainly to an economist, that’s not a very good way to make decisions about spending people’s money.”

The carbon rebate, which technically isn’t a rebate but a prepayment that was meant to defray the costs of the carbon levy, is the latest pre-election handout Canadians have been promised. In recent months, both Ontario and British Columbia voters were pledged broad-based relief just ahead of their respective provincial elections.

Last fall, Ontario’s Progressive Conservative Premier, Doug Ford, announced $200 tax-free rebate cheques, with a price tag of $3-billion. The cheques were delivered to eligible provincial taxpayers as well as the parents of Ontario children in early 2025. Mr. Ford won a third consecutive majority government in February.

British Columbia’s NDP Premier, David Eby, promised a grocery rebate of up to $1,000 to individuals and families in that province’s election last fall, outbidding the rival BC Conservative Party, which had promised a smaller rebate for renters and homeowners. The NDP’s $1.8-billion commitment was scrapped earlier this year before the cheques were drafted, but by then Mr. Eby had eked out a majority government.

Christopher Ragan, an associate professor of economics at McGill University, said affordability measures are more effective when they are income tested.

“If the concern is affordability, obviously putting $200 in people’s pockets helps,” he said. But he said it would be advantageous to target income subsidies to lower-income Canadians who will benefit the most. A better mechanism for delivering cost-of-living relief to Canadians, he said, would be to use the existing GST low-income tax rebate, because it would deliver support to those who need it the most.

But Prof. Ragan said the cost of the Canada Carbon Rebate payout is minor compared to the costly promises that are being made in this election campaign by both the Conservatives and the Liberals. “The $3.7-billion will be swamped by the totality of new spending commitments that we see over the election campaign.”

And neither party has yet to fully explain, he added, how they will pay for all their promises. The two parties have yet to release costed platforms.

The rebate was created as a tax-free payment distributed by the Canada Revenue Agency (CRA) – paid in advance annually at first, and later every three months – to help individuals and families offset the cost of the federal pollution pricing. The CRA says the April payment will be the last.

Shortly before calling the election, Prime Minister Mark Carney reduced the federal fuel charge to zero starting April 1, and he removed requirements for provinces and territories to have a consumer-facing carbon price. Quebec is keeping its carbon pricing system in place for now, but British Columbia lifted its carbon tax effective April 1.

B.C. is sending out a final climate action rebate cheque in April, which is also unfunded and will add $260-million to its deficit.

Like most provinces this year, B.C.’s budget forecasts a rising deficit owing to the economic turmoil and uncertainty resulting from the new and ever-changing U.S. tariff regime. Cancelling the carbon tax is expected to increase B.C.’s deficit, prompting two credit downgrades last week.

The expense of issuing climate rebates in April without the associated revenue will add to B.C.’s already-record deficit this year.