Carbon price and cost-of-living offset benefit set to increase on April 1
The GNWT plans to increase carbon price rates – as well as increase the cost-of-living offset payments residents receive – on April 1, 2023.
Finance minister Caroline Wawzonek announced the coming changes on Monday, saying the territory’s approach is changing to align with new federal requirements.
The federal government is increasing the carbon price yearly by $15 per tonne of carbon dioxide equivalent emissions. The price will start a $65 per tonne in April (it’s at $50 per tonne right now), rising to $170 per tonne by 2030.
Rebates that directly offset, reduce, or negate the impact of the carbon tax are also now banned by the federal government.
Under this, carbon tax rebates for heating fuel that customers received when they purchase fuel, and the 72-percent rebates for large industrial emitters will end.
However, residents will instead receive an additional $135 per year through the cost-of-living offset payment. The offset payment is currently set at $260 per adult and $300 per child – but by spring, payments will jump to $473 per adult and $525 per child. The GNWT has previously said that the benefit will increase alongside carbon tax rate increases.
Under the new payment structure, a family with two adults and two children will receive $1,996 per year to help offset the cost of living increases expected to accompany the carbon price increase.
The territorial government says the benefit payments will be “equal to the average household heating cost increase due to the carbon tax.”
Meanwhile, large emitters will instead receive a rebate connected to a “facility-specific baseline.” The large emitter grant program will close this coming March, though funding remaining in the pot will be available for another five years.
The territorial finance department’s changes to the carbon pricing schedule, which Wawzonek tabled in An Act to Amend the Petroleum Products and Carbon Tax Act, must now be approved by the legislative assembly.