The Government of the Northwest Territories (GNWT) will remove the Northwest Territories’ carbon tax for all consumers except large emitters on 1 April 2025.
The GNWT has taken this step to align with the Government of Canada’s carbon pricing policy changes to eliminate the federal consumer carbon tax.
Regulatory changes will provide at-source carbon tax rebates to all consumers except the diamond mines, which are currently the territory’s only large emitters. These regulatory changes will remain until Canada repeals its carbon tax through legislation, at which point the Northwest Territories’ carbon tax will also be abolished through legislation.
What this means for residents and businesses
- No Carbon Tax on Fuel: The GNWT will introduce at-source rebates for all consumers other than large emitters through regulations, eliminating the carbon tax on all fuels;
- Cost of Living Offset (COLO) Discontinued: With the removal of the carbon tax, the COLO payments—previously provided to help offset costs—will be eliminated on 1 July 2025. Eligible NWT residents will receive the last quarterly COLO payments in April 2025;
- Community Government Carbon Tax Revenue Sharing Grants End: Carbon tax revenue-sharing grants to community governments will be discontinued effective 1 April 2025;
- Large Emitters will continue to pay the NWT carbon tax and receive a partial rebate until the NWT legislation is repealed.
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 minimising 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 CAD 65/tonne of greenhouse gas (GHG) emissions on 1 April 2023 and will continue to grow by CAD 15/tonne annually until the rates reach CAD 170/tonne in April 2030. These annual tax rate changes are the same as those under the federal GGPPA.
Earlier, Canadian Prime Minister Mark Carney abolished the consumer carbon tax effective from 1 April 2025.
