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Carbon and Greenhouse Gas Legislation in the Northwest Territories

September 2019

Carbon pricing

As a signatory of by the Pan-Canadian Framework for Clean Growth and Climate Change, the Government of the Northwest Territories (NWT) committed to meeting the federal benchmark for carbon pricing by 2019. Its Made-in-the-North approach implements carbon pricing as a tool to reduce greenhouse gas emissions (GHG), while also providing for investments in initiatives and programs that lead to greater use of renewable and cleaner fuels.

The NWT’s approach to carbon pricing seeks to:

  • Introduce a carbon tax on fuels effective September 1, 2019, based on $20/tonne of GHG emissions. This will increase annually to $50/tonne by 2022.
  • Exclude aviation fuel from carbon pricing.
  • Rebate 100% of the carbon tax for heating fuel for most residents, businesses, and governments.
  • Rebate the NWT Power Corporation for carbon tax payments related to fuel needed to produce electricity to ensure electricity rates do not increase.
  • Establish a rebate program for large GHG emitters to partly offset the impact of carbon pricing and to incentivize investments to reduce GHG emissions.
  • Invest in governmental initiatives that reduce emissions and address climate change as identified in the 2030 Energy Strategy and NWT’s Climate Change Strategic Framework.

Bill 42, An Act to Amend the Petroleum Products Tax Act

Bill 42, An Act to Amend the Petroleum Products Tax Act, amends the Petroleum Products Tax Act (the Act) to implement the provincial carbon tax. Bill 42:

  • Imposes a carbon tax on petroleum products and natural gas.
  • Makes the amendments necessary for collection and administration of this new tax to be handled in the same manner as the current fuel tax. Purchasers will be required to pay the tax and vendors and collectors will be required to remit the tax to the territorial government.
  • Allows the Minister to provide in regulation for rebates and grants.
  • Increases the maximum fines and penalties which may be imposed either as administrative penalties or on summary conviction.
  • Adds provisions for the appeal of an assessment of tax, interest, or administrative penalties under the Act.

As of May 2019, Bill 42 had passed second reading and was referred to the Standing Committee on Government Operations. The NWT has a territorial election in October 2019, and it is unknown whether Bill 42 will receive Royal Assent before the current legislative assembly is dissolved. If it does not, the government will have to introduce new amendments to the Act in the next legislative assembly session.

Emissions reduction in the Northwest Territories

In January 2018, the NWT released a draft Climate Change Strategic Framework that sets an emissions-reduction goal of 20% by 2030. Additionally, in April 2018 the territorial government introduced its 2030 Energy Strategy (the Strategy), which sets out the government’s long-term approach to supporting sustainable energy supply and use in the NWT.

The Strategy has six key objectives:

  1. Work together to find solutions through community engagement, participation, and empowerment.
  2. Reduce GHG from electricity generation in diesel powered communities by an average of 25%.
  3. Reduce GHG emissions from transportation by 10% per capita.
  4. Increase the share of renewable energy used for space heating to 40%.
  5. Increase residential, commercial, and government building energy efficiency by 15%.
  6. Develop the NWT’s energy potential, address industry emissions, and meet national climate change objectives.

The territorial government will release public reports on its activities and progress relating to the Strategy annually. Further, the Strategy’s objectives will be re-evaluated in 2023 to account for technological developments.

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