NWT confirms end of its consumer carbon tax

The NWT government has confirmed the manner by which it will stop the territory’s customized version of the consumer carbon tax.

The territory had already said it would end the consumer portion of its tax in line with action taken by the federal government earlier this month.

On Wednesday, the GNWT reinforced its initial assessment by confirming it will use regulations to “provide at-source carbon tax rebates to all consumers except the diamond mines, which are currently the territory’s only large emitters.”

Those regulatory changes, which don’t require approval from all MLAs, will come into effect on April 1. The rules for large emitters are different to the rules for residents.

“These regulatory changes will remain until Canada repeals its carbon tax through legislation, at which point the Northwest Territories’ carbon tax will also be repealed through legislation,” the territory added.

The federal government is performing a similar regulatory manoeuvre to end its carbon tax without having to pass or repeal legislation, which would require Parliament to sit.

Practical consequences

The GNWT has to take its own steps to end the consumer portion of the carbon tax because the territory uses its own version of the tax designed to meet federal requirements.

On Wednesday, the territory said the effects of ending its tax would be:

• no carbon tax on fuel;
• ending the cost-of-living offset payments residents receive as of July 1, meaning April’s payment will be the last;
• ending grants to community governments that shared carbon tax revenue as of April 1; and
• keeping the tax for large emitters with a “partial rebate until the NWT legislation is repealed.”

“Given the federal government’s new direction and our ability to act quickly through regulation, eliminating the carbon tax for most fuel users is a responsible step that provides immediate relief and certainty for northerners,” NWT finance minister Caroline Wawzonek was quoted as saying.

“We will continue to work with Canada to develop long-term solutions that support affordability, economic growth, and environmental sustainability.”

How large emitters like the diamond mines will ultimately pay for pollution in the future is not clear – and will to a large extent be determined by who wins the current federal election and that new government’s approach.

“The GNWT will engage with the federal government to determine next steps for territorial large emitters under the relevant federal carbon pricing framework,” the territorial government stated.