NWT carbon pricing approach changing to align with new federal requirements

News Releases

Yellowknife — October 31, 2022

Today Caroline Wawzonek, Minister of Finance, announced a change to the territory’s approach to the NWT carbon tax system to align with new federal government requirements. The change includes the introduction of a bill to amend NWT carbon tax rates, as well as proposed changes to how the GNWT offsets the carbon tax’s impact on the cost of living and economic development.

On August 5, 2021, Environment and Climate Change Canada (ECCC) announced that the carbon price will increase annually by $15/tonne of carbon dioxide equivalent emissions, starting at $65 a tonne and rising to $170 a tonne by 2030. Other changes to the federal carbon pricing plan include new guidelines that prohibit carbon tax rebates that directly offset, reduce, or negate the impact of the carbon tax.

Minister Wawzonek tabled An Act to Amend the Petroleum Products and Carbon Tax Act to revise the NWT carbon tax rates schedule to comply with the new federal criteria. Following Legislative Assembly approval, other changes to the NWT carbon tax system will be done through regulations effective April 1, 2023. This includes discontinuing carbon tax rebates for heating fuel and the current rebate for large industrial emitters.

To help offset the loss of the rebate on heating fuel, the GNWT will increase the amount of the NWT Cost of Living Offset (COLO) per resident by $135. Starting 2023-24 annual COLO amounts will increase to $473 for each adult and $525 for each person under 18 years of age. The GNWT will replace the current carbon tax rebate for large emitters with a rebate tied to a facility-specific baseline.


“The GNWT is continuing to honour its commitments under the Pan-Canadian Framework on Clean Growth and Climate Change with the proposed changes to the NWT carbon tax system. We have worked with Environment and Climate Change Canada to ensure that NWT carbon tax will continue to meet revised federal requirements while still, as much as possible, minimizing the effect on the cost of living and economic opportunities in the territory.”

- Caroline Wawzonek, Minister of Finance

Quick facts

  • The carbon tax will not increase until April 1, 2023, and all current measures under the NWT carbon tax plan, including COLO, point of purchase rebates on heating fuel, and large emitter rebates, will remain in place until March 31, 2023.
  • The heating fuel rebate will be replaced with an increase in COLO payments for residents equal to the average household heating cost increase due to the carbon tax.
  • The current rebate of the carbon tax paid by large industrial emitters is based on a facility’s total emissions. It will be replaced by a rebate that is tied to a pre-determined, facility-specific fixed baseline.
  • The large emitter individual grant program will close on March 31, 2023, with the funds remaining available for five years until March 31, 2028.
  • The GNWT will continue to use other programs to help businesses, community governments and other organizations reduce their overall fossil fuel use.

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For media requests, please contact:

Todd Sasaki

Manager, Public Affairs and Communications

Department of Finance

Government of the Northwest Territories