GNWT ending NWT Carbon Tax for most users on April 1
Publication Date
News Release
Yellowknife, NT (March 26, 2025) - The Government of the Northwest Territories (GNWT) will remove the Northwest Territories carbon tax for all consumers except large emitters on April 1, 2025.
The GNWT has taken this step to align with changes in the Government of Canada’s carbon pricing policy 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Canada repeals its carbon tax through legislation at which point the Northwest Territories’ carbon tax will also be repealed through legislation.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 July 1, 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 April 1, 2025.
Large Emitters will continue to pay the NWT carbon tax and receive a partial rebate until the NWT legislation is repealed.
Next Steps: The GNWT will introduce legislation to formally repeal the Petroleum Products and Carbon Tax Act and amend the Income Tax Act to remove the Cost of Living Offset during the May 2025 session of the Legislative Assembly. These legislative amendments will not come into force until Canada repeals the federal consumer carbon tax.
Quote: “Given the federal government’s new direction and our ability to act quickly through regulation, eliminating the carbon tax for most fuel users is a responsible step that provides immediate relief and certainty for Northerners. We will continue to work with Canada to develop long-term solutions that support affordability, economic growth, and environmental sustainability.” - Caroline Wawzonek, Minister of Finance
Quick facts:
The Canada Revenue Agency will issue final COLO payments in April 2025.
The GNWT will still issue 2024-25 Community Government Carbon Tax Revenue Sharing Grants in late 2025-26.
The GNWT will engage with the federal government to determine next steps for territorial large emitters under the relevant federal carbon pricing framework.
For media requests, please contact: Beau Stobbs Senior Communications Officer Department of Finance Government of the Northwest Territories EIA_FINComms@gov.nt.ca