Exemption to carbon tax on home heating oil coming soon (probably), N.W.T. minister says

Finance Minister Caroline Wawzonek says the Government of the Northwest Territories is in the process of creating an N.W.T. exemption on carbon taxes to home heating oil, but the territorial election has delayed the process and she couldn't say when it might take effect.

In October, the federal government announced it would be creating a three-year exemption for home heating oil from the carbon tax. N.W.T. Liberal MP Michael McLeod said at the time the federal change wouldn't impact the Northwest Territories since it follows its own carbon tax legislation — along with British Columbia and Quebec.

Prime Minister Justin Trudeau announced the new exemption during the campaign period for the N.W.T.'s territorial election and interview requests with the finance minister and then-premier were denied as a result of the media blackout.

Now that the territory has a new legislative assembly, Wawzonek said the N.W.T. can make the regulatory change to enact the same home heating oil exemption for itself — but she said that change will have to wait for government board meetings.

"I can't speak to when it's coming," she said, adding that it should be "as soon as possible."

"I can say that the meetings are starting, they are regular and everyone, everyone has heard from their residents about the impacts of the cost of living from home heating fuel."

Wawzonek said the possible amendments have to come forward at the financial management board, which is meeting again this week.

Prime Minister Justin Trudeau announces a temporary, three-year pause to carbon pricing measures that are applied to deliveries of heating oil during a news conference in Ottawa on Thursday Oct. 26, 2023. (Sean Kilpatrick/The Canadian Press)

Fort Simpson resident Dennis Nelner said he's already paid hundreds more dollars to heat his home as a result of the tax.

"I don't consume any more heating fuel than I do normally year-to-year but my cost is going up," he said. "It just makes life more difficult. I don't see any value to collecting this tax."

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In Inuvik, Shirley Kisoun expressed similar frustration. Although she said having a wood stove is helping to save some money on heating bills, Kisoun said she would also like to see an exemption and she's hearing the same from others in the Beaufort Delta.

"Like oh my goodness, we're struggling enough," she said.

Cost of Living Offset payments

Wawzonek said the territory's cost of living offset (COLO) payments are designed to cover additional costs associated with the tax, though she acknowledged residents might not feel their bill has been covered with the territory's recent cold snap.

"I'm live to the fact that folks may have received their cost of living payment, but the unusual level of cold is putting people in a situation where they got that payment a month ago," she said. "That doesn't feel very helpful when they're facing high costs right now. But the payment was made."

She said it would be impossible to perfectly account for individual heating costs but said the department's calculations for the offset payments were made based on communities and are sent out to N.W.T. residents in July, October, January, April.

An exemption on home heating oil would be different from the blanket carbon tax exemption that Premier R.J. Simpson has been calling for since his election. For a whole blanket exemption, Wawzonek said the N.W.T. would need the federal government's permission.

Change has to consider all residents, Minister says

Wawzonek said part of the delay comes from considering how a heating oil exemption would impact all N.W.T. residents. She said she doesn't want to create a disadvantage for those heating their homes with propane who, with a heating oil exemption, would no longer receive COLO payments.

Those in public housing don't pay for their home heating but still benefit from COLO payments and Wawzonek said that's a group the government also needs to consider.

The federal government enacted its home heating oil exemption for three years and Wawzonek said she expects the N.W.T.'s version to do the same.

She said the federally imposed three-year timeline is partly to allow Atlantic provinces the opportunity to find solutions like electrifying home heating. She said the N.W.T. is not in the same position to find those solutions as quickly.

"The solutions, I think, are going to have to be bigger and more adapted to the North," she said.