Ottawa will force banks to clearly identify carbon rebates

(Ottawa) Canadian banks that refuse to identify the Canadian carbon rebate by name when they make direct deposits are forcing the government to change the law to oblige them, argued Environment Minister Steven Guilbeault.

Minister Guilbeault takes his stand after Tuesday’s federal budget promised to amend the Financial Administration Act so that government payments accepted as deposits in Canadian banks bear the title desired by the government.

“The fact that they have not done so for many years has led us to adopt this position,” explained the minister.

His ministry has been fighting with banks for almost two years over how carbon rebates are labeled when deposited directly into bank accounts.

The first remittance deposits in 2022 were labeled very generically – “federal payment” and “EFT Canada,” for example – which meant recipients had no idea what they were receiving money for.

Some, but not all, banks have since changed their procedures to ensure that bank statements reflect the measure’s new name: the “Canadian Carbon Rebate.”

TD and BMO have adopted the term requested by the government. However, RBC and Scotiabank were unable to make the change in time for the rollout, although both say they intend to adopt the new name.

CIBC, for its part, still calls it “Canada Depository”.

Fueling the confusion

Guilbeault said the lack of a clear identifier isn’t the only thing fueling confusion about carbon pricing, but he said it’s certainly part of the problem.

“I think we took it for granted that because people were getting it, they knew they were getting it,” he said.

“We have discovered over the last few months that this is not the case, in part because of the way it has been labeled – or mislabeled, I should say – by most financial institutions. »

The government has struggled to clearly explain carbon pricing and rebates since the policy began in 2019.

This has helped conservatives, fiercely opposed to carbon pricing, in their relentless efforts to eliminate it once and for all.

Changing the law would not just affect carbon reductions, but all government deposits, including child benefit, unemployment insurance and tax refunds.

Mr. Guilbeault rejected any suggestion that the change would cost banks money.

“You can quote me on this: I really have a hard time believing the banks when they say this is going to cost them money,” he maintained.

“I think as a customer we should have the right to label this how we think it should be labeled and it’s not up to the banks to decide. »

A spokeswoman for the Canadian Bankers Association didn’t have much to say about the proposed change.

“Canada’s banks support measures that help build a strong and sustainable Canadian economy,” said Maggie Cheung in a written statement.

“We will also review proposed amendments to the Financial Administration Act when they are introduced, as well as the consequences for banks and Canadians. »

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