Here's what carbon tax in the N.W.T. will look like - Action News
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Here's what carbon tax in the N.W.T. will look like

The government of the Northwest Territories is releasing its plans to implement a carbon tax in the territory. People can expect to see the tax on fuels to start July 1, 2019.

People can expect new tax benefits, rebates on heating homes and small businesses

Smokestack coming out of a chimney.
Emissions are released from a smokestack in Trail, B.C., in November 2012. People in N.W.T. can expect to see the carbon tax on fuels starting July 1, 2019. Initially it will charge $20 per tonne of greenhouse gas emissions, gradually increasing it to $50 per tonne by 2022, according to the plan. (Darryl Dyck/Canadian Press)

The Northwest Territories government has released its plan to introduce a carbon tax in the territory and it's scheduled to start next summer.

On Wednesday, the government announced its plans, saying itwants to"minimize impactson the cost of living and doing business in the N.W.T." It estimates that measures it will introduce along with the tax will actually result in a net reduction in the cost of living in the territory.

The territorial government signed onto a pan-Canadian frameworkto fightclimate change introduced in December2016. That framework involves implementing carbon pricing as one of the many ways to reduce emissions and reliance on fossil fuels.

People can expect to see the carbon tax on fuels starting July 1, 2019. Initially it will charge $20 per tonne of greenhouse gas emissions, gradually increasing it to $50 per tonne by 2022, according to the plan.

The territory burns almost half-billion litres of gasoline, diesel, propane and other fossil fuels each year. The tax will be charged directly on any fuel sold in the territory, but it will affect the cost of almost all goods and services.

We are implementing it in a way that reflects our northern realities.- Robert C.McLeod,N.W.T. Finance Minister

Transportation accounts for almost 60 per cent of the fuel burned in the territory. Thetax will increasecosts ofshipping everything from groceries to clothing. Those costswill be passed on to consumers.

The N.W.T government estimates that the new tax will add about $16 million to government revenues the first year, increasing to about $54 million by 2022.

Exclusions and rebates

The territorial government has provided a list of exclusions and rebates in their plan:

  • Carbon tax is excluded on aviation fuel.
  • A 100 per cent rebate of carbon tax for heating fuel for most residents, business, governments. It's expected to save homeowners about $500/year and renters about $300/year, depending on the size and location of the home. Small businesses can expect to see between $1,000 and $5,000 rebates. Municipal and community governments can expect to save about $100,000 in Yellowknife and Inuvik, and $30,000 in smaller communities.
  • A new tax benefit called "Cost of Living Offset"to reduce impacts for families. Once fully implemented, it will provide $260/year for adult residents and $300/year per child. The benefit will increase annually, andwill be deliveredthrough tax returns fromthe Canada Revenue Agency, on behalf of the N.W.T. government.
  • Rebates to the N.W.T. Power Corporation for its carbon tax paid to produce electricity, "to ensure electricity rates do not increase."
  • A rebate program for large greenhouse gas emitters like diamond mines and oil facilities. Annual rebate will be given for 75 per cent of their carbon tax collected on heating fuel and "non-motive" diesel; remainder 25 per cent will be held in trust accounts for investments to reduce emissions.

The territorial government estimates the measures will result in a net reduction in the cost of living for a family of four of about $400 annually by the time the tax is fully introduced in 2022.

The government also lists some clean-energy projects it plans to pursue over the next five years, like the Inuvikwind farm and several solar energy projects in smaller communities like Tulita, Tsiigehtchic and Paulatuk.

Plan 'balances' cost of living

Previously, northern leaders had vowed to make surecarbon tax won't hurt northern economies, or further drive up the cost of living.

In a news release Wednesday, N.W.T.Finance Minister Robert C. McLeodsaid the territory's plans for carbon pricing "balances" the high cost of living for people and the need to address climate change.

"We are implementing it in a way that reflects our northern realities," he statedin the release.

With files from Richard Gleeson, Priscilla Hwang