Canadian banks that refuse to identify the carbon rebate by name when doing direct deposits are forcing the government to change the law to make them do it, says Environment Minister Steven Guilbeault.

Guilbeault is taking the stand after Tuesday's federal budget promised to amend the Financial Administration Act so government payments accepted for deposit at Canadian banks will carry whatever title the government wants.

"The fact that they haven't been doing it now for many years led us to take this position," Guilbeault said.

His department has been battling with banks for almost two years over how carbon rebates are labelled when they are deposited directly into bank accounts.

The first rebate deposits in 2022 were labelled very generically "federal payment" and "EFT Canada," for example which meant recipients had no idea why they were getting the money.

Some banks, but not all, have since amended their procedures to ensure bank statements reflect the measure's new name: the "Canada Carbon Rebate."

TD and BMO have adopted the government's requested "CdaCarbonRebate" entry, which fits the 15-character limit imposed by some banks.

However, RBC and Scotiabank were unable to make the change in time for the rollout, although both say they intend to update to the new name.

CIBC, meanwhile, is still calling it "Deposit Canada."

Guilbeault said the lack of a clear identifier isn't the only thing fuelling confusion about carbon pricing, but is definitely part of the problem.

"I think we took it for granted that since people were receiving it, people knew they were receiving it," Guilbeault said.

"We've come to discover over the last few months that it wasn't the case, in part because it the way it was labelled or mislabelled, I should say by most financial institutions."

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

That has helped the Conservatives, fastidiously opposed to carbon pricing, in their unrelenting efforts to kill it off once and for all.

Changing the law wouldn't just affect carbon rebates, but all government deposits, including child benefits, employment insurance and tax refunds.

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

"You can quote me on this: I have a really hard time believing the banks when they say that it's going to cost them money," he said.

"I feel that, as a client, we should have the right to label this the way we feel it should be labelled and it's not up to the banks to decide."

A spokeswoman for the Canadian Bankers Association had little to say about the proposed change.

"Banks in Canada support measures that help build a strong and sustainable Canadian economy," Maggie Cheung said in a written statement.

"We will also review proposed amendments to the Financial Administration Act when they are presented, and what proposed changes to the Act would mean for banks and Canadians."