A change is coming to the NWT’s Carbon Tax system.
On April 1st, the NWT’s carbon tax on home heating fuel will officially be suspended. Additionally, a point-of-purchase rebate will be made available to Northern citizens until March 31st, 2027.
This decision by the GNWT follows a similar decision made by the Federal Government to suspend the carbon tax on light fuel heating oil. While the GNWt can follow in the footsteps of these kinds of decisions, it cannot extend this relief to any other form of heating fuels. For example, the carbon tax will still be applied to propane and natural gas, no matter how they are used.
This will also affect the next Cost of Living Offset payment, which is coming in April. These payments are meant to help reduce the carbon tax burden on individual residents. These are payments that are made every quarter, and they are constantly adjusted to make sure they are aligning with the average carbon tax paid by homeowners. If these changed were not made, the GNWT would end up giving out more money through offsets than it collected through the carbon tax.
In a statement, Caroline Wawzonek, the Minster of Finance for the GNWT, explained that the NWT needs this flexibility on the carbon tax. She states that taxing heating fuel raises the cost of living for residents, and creates more barriers for economic growth in the North.
“We will continue to advocate for the introduction of a carbon tax model in which Canada fully recognizes the challenges faced by residents and businesses in the Northwest Territories and asks those who have benefitted most from historic GHG emissions for more meaningful support towards a green energy transition for those regions who are now on the front lines of climate change.”