Mr. Speaker, the Excise Act and the Excise Act, 2001 adjust excise duty rates on an annual basis for tobacco and alcohol products. Each year on April 1, rates are adjusted for inflation to preserve the value of taxing tobacco and alcohol products and ensure that the excise duties continue to meet their policy objectives.
On April 1, 2022, rates will increase by 2.4%, reflecting the CPI from the previous year, ending September 30, 2021. Using the revenues from excise duties on alcohol and tobacco products received in 2020-21 according to the Public Accounts of Canada as our baseline, with regard to (a), we anticipate that the April 1, 2022, inflationary adjustment will generate in the 2022-23 fiscal year approximately $121 million in additional excise duty revenue from tobacco and alcohol products. With regard to (b), to break it down by type, this results in approximately $72 million in excise duty on tobacco products and $49 million in excise duty on alcohol products in 2022-23.
The direct proceeds from the federal carbon pollution pricing system remain in the province or territory of origin. In Prince Edward Island, Yukon and Nunavut, the direct proceeds from the federal system are returned to the governments of these jurisdictions. In jurisdictions that do not have their own fuel charge consistent with the federal benchmark criteria, those being Ontario, Manitoba, Saskatchewan and Alberta, approximately 90% of direct proceeds from the fuel charge are returned to residents of those provinces through climate action incentive payments, CAI payments. Most households get more in CAI payments than the increased costs they face from the federal carbon pollution pricing system. The remaining fuel charge proceeds are used to support small businesses, farmers, indigenous groups and other organizations.