Carbon Tax

As part of the GNWT commitments under the Pan-Canadian Framework for Climate Change and Clean Growth, the NWT carbon tax was introduced September 1, 2019. Several actions were taken to balance the NWT carbon pricing approach in a way that encouraged reduction in fossil fuel consumption while minimizing the effects on the cost of living and economic opportunities in the territory.

Effective April 1, 2023 the NWT carbon tax rate schedule was revised and the NWT carbon pricing approach changed to meet with new federal carbon pricing requirements.

Updated Carbon Tax Rates by Fuel Type can be found here.

The 2018 Government of Canada Greenhouse Gas Pollution Pricing Act (GGPPA) imposed a federal carbon tax on all provinces and territories without provincial-territorial carbon taxes. Provinces and territories may choose to implement their own carbon tax systems if they meet the federal benchmarks.

The Government of the Northwest Territories (GNWT) is committed to a balanced carbon pricing approach that addresses climate change while minimizing the impacts on the cost of living and economic opportunities in the territory.

In September 2019, the Government of the Northwest Territories introduced the territorial carbon tax by amending the Petroleum Products Tax Act and Regulations and provided offsets to minimize the impact of the new tax on the cost of living and economic opportunities in the Northwest Territories.

Carbon tax rates were increased to $65/tonne of greenhouse gas (GHG) emissions on April 1, 2023 and will continue to grow by $15/tonne annually until the rates reach $170/tonne in April 2030. These annual tax rate changes are the same as those under the federal GGPPA.

Go here to view carbon tax rates by fuel type and a list of exempted fuels.

Go here for information for NWT Fuel Tax collectors.

Carbon pricing in the Northwest Territories

The GNWT’s carbon pricing approach balances key concerns of NWT residents, business, and industry with the overall goal of reducing carbon emissions and providing offsets to reduce the effects of the carbon tax by:

  • Providing residents with a Cost of Living Offset (COLO) based on the individual’s community of residence. The COLO reduces residents’ carbon tax burden by providing quarterly benefit payments that increase in step with carbon tax increases. Residents living in higher heating fuel use areas will receive higher COLO payments.
  • Providing an annual carbon tax revenue-sharing grant for communities that demonstrate efforts to adapt to climate change, reduce reliance on fossil fuels, and/or support the overall reduction of GHG emissions. 
  • Establishing an NWT-specific carbon tax rebate policy for large emitters in the resource sector.

Integrated approach to climate change

Strengthening the GNWT’s leadership on climate change is a Mandate priority. Taking action to reduce the territorial greenhouse gas emissions is a shared responsibility that requires partnerships with, and support from, all stakeholders including residents, businesses, NGOs and community governments.

The GNWT Department of Environment and Climate Change (ECC) is responsible for overseeing the implementation of the 2030 NWT Climate Change Strategic Framework and the 2019-2023 Action Plan. ECC leads the government’s integrated response to climate change by coordinating GNWT departments and external partners. The GNWT publishes an annual plain language report to keep residents informed on how climate change is being addressed. The report includes updates from the NWT Climate Change Action Plan Annual Report, the Energy Initiatives Report and the NWT Carbon Tax Annual Report.