The NWT’s controversial carbon tax on home heating oil could be tackled before the legislative assembly meets on Feb. 6, according to the territory’s finance minister and deputy premier Caroline Wawzonek.
“It’s a regulatory change,” Wawzonek said on Jan. 13. “It’s one that can go directly to cabinet. Obviously, in a consensus government, we certainly want to engage with colleagues who are MLAs and not ministers, but we wouldn’t have to wait to initiate or finalize the changes necessarily until there’s a formal legislative assembly.
“We don’t have to wait until February,” she added. “We certainly don’t want there to be a benefit out there that we’re not maximizing for residents.”
Under new federal legislation, residents of some provinces and territories are exempt from paying carbon tax on home heating oil. However, not all provinces and territories follow the federal system for carbon taxes. Some, like the NWT, choose to use an independent system. That means that the federal exemption does not automatically apply in the territory, and residents will continue to pay the tax until the territorial government changes its rules.
“When the federal government recently made the changes to exempt home heating oil, that didn’t automatically apply because what they’ve done is they’ve changed the goal post on us,” Wawzonek said. “We now need to modify our regulations to apply that change.”
The NWT carbon tax on home heating oil comes with a rebate, but residents don’t receive money back until well after they have paid their bills. For people living cheque-to-cheque, the current system can be difficult.
Wawzonek didn’t specify when the NWT’s carbon tax on home heating oil will be brought to cabinet, but said that she has asked staff to “bring up some options,” and that the issue is being approached with “urgency” as frigid winter temperatures continue to grip the territory.
“I get that people are a bit frustrated and anxious,” she said. “I think a lot of people have some frustration about the fact that we are recently, in the last few weeks here, into a very particularly cold season. People are using more heating fuel now.”
“The cost of heating fuel is itself volatile, and that’s not something that I have any control over, it’s only the tax on top of that,” she added.
The new federal exemption only applies to home heating oil, so people who heat their homes with propane, natural gas, or biofuels like wood, would have to continue paying carbon tax to heat their homes.
This creates an extra layer of complication when it comes to removing the carbon tax on home heating oil, according to Wawzonek.
“Some people are saying ‘why can’t you just sign away the home heating fuel [carbon tax] and be done with it?’” she said. “I think there is something to consider about being equitable and being mindful of the cost to all of the Northwest Territories, all residents, all communities.”
The GNWT’s decision to use its own carbon tax system has meant that residents of the territory have continued to pay extra on their home heating bills, while people in regions that follow the federal system have been experiencing lower bills. Despite that, Wawzonek still supports the use of an independent carbon tax system for the NWT, as it gives the territorial government the ability to tailor its policy to the needs of residents.
“We want to continue to do what we said all along, which is to do the best we can with this federal tax [system],” she said.
“I think the Premier has spoken to this – this is a tax that is putting the North in a position to pay for something that we are actually a very small contributor to, GHG (greenhouse gas) emissions, with one of the least opportunities to get ourselves off those GHG emissions,” she added. “This is really why we wanted to hang onto control of it, because the federal government in this instance made a change that benefits people who use home heating fuel in their homes, but in other cases could just as easily make a political decision that would not benefit people.
“We would want to be insulated from being directly impacted from a political decision coming from Ottawa. We’ve been holding on ourselves to having our own system in the North that was designed in the North, meant to apply in the North.”