Monday was April Fools’ Day, but it was also a day where the price to fill your vehicle, buy groceries or heat your home will almost certainly go up.
The federal government increased the carbon tax by $15 per tonne and it now stands at $80 per tonne of carbon emissions. At the same time, the carbon tax exemption for home heating oil for the NWT came into effect on Monday as well.
Finance Minister Caroline Wawzonek announced on Feb. 6 that the tax would be suspended as of April 1 for those who use home heating oil, and that exemption will be in effect until March 31, 2027. Those who use propane and natural gas for heating will still have to pay the carbon tax.
In a previous interview with NNSL Media, Premier R.J. Simpson said the carbon tax was “just not fair for the North” and felt the NWT should be completely exempt from paying it at all.
The previous legislative assembly passed a bill to take over collecting the carbon tax and distribute it under its own means. If it didn’t do that by April 1, 2023, the federal backstop would have come into effect, meaning Ottawa would have handled all rebates and tax administration.
The pause in collecting the tax means the GNWT will be starving itself of money, claimed NWT MP Michael McLeod in a prior interview with NNSL Media.
“If you cancel the tax, you cancel the revenue,” he said. “They’re in a cash crunch right now and now that they’ve stopped it, they’re going to lose about $16 million this year and about $18 million next year, if I remember correctly. Given the reality of their situation, I’m not sure how they’ll replace that lost revenue.”
Residents should expect a Cost of Living Offset (COLO) payments issued by Revenue Canada this month. The COLO payments were designed to help residents reduce the carbon tax burden. The last payment to offset home heating bills for the first quarter of 2024 was issued in January by cheque or direct deposit, depending on the information and preferences people have on file.
The COLO payments have been divided into three zones: Zone A are communities classified by the GNWT as low fuel use areas (including Yellowknife, Ndilo and Dettah). They will receive up to $441 per adult and $505 per child annually.
Communities in Zone B, the medium fuel use area, will each get $451 for adults and $515 for children.
Zone C, the high fuel use area, is projected to receive $470 for each adult and $534 for each child.
The COLO payments are in addition to a base amount that considers the cost of the carbon tax paid by an average NWT household. The 2024 base amount per adult is $416 and per child is $480.
Those payments will remain in effect until March 31, 2025, according to the Department of Finance.
The national carbon pollution price is set to increase annually by $15, reaching $170 per tonne by 2030.
A litre of gasoline now contains 17.6 cents per litre of carbon tax, an increase of 3.3 cents over 2023, while a litre of diesel now includes 21.4 cents worth of carbon tax, up four cents from last year. Each litre of propane contains 12.9 cents in carbon taxes and a cubic metre of natural gas is now taxed at 15.3 cents extra courtesy of the tax.