New NWT Premier Wants Carbon Tax Exemption: ‘It Doesn’t Work for the Northwest Territories’

A dump truck works near the Syncrude oil sands extraction facility near Fort McMurray, Alberta, in a file photo. The Canadian Press/Jason Franson

The new premier of the Northwest Territories is requesting the federal government provide the territory with a blanket exemption from the carbon tax, arguing that the higher cost of living is undermining the effectiveness of the tax.

“Here in the Northwest Territories, the cost of living is high. The cost of fuel, home heating, of power, they have always been high,” R.J. Simpson said on Dec. 10 on CBC’s Rosemary Barton Live.

“We get the impetus for [the tax], but the fact is it doesn’t work for the Northwest Territories.”

Mr. Simpson, who was selected by MLAs to be the new premier following the Northwest Territories’ general election on Nov. 14, said the carbon tax is not a proper incentive for people in the territory to switch to green energy and technologies due to its lack of infrastructure, non-connectivity to southern power grids, and climate ill-suited for heat pumps.

While Mr. Simpson said he believes climate change is a real threat—highlighting how the territory suffered from wildfires in the summer that forced evacuations of communities like Hay River and Yellowknife—he said the carbon tax is negatively impacting food and housing affordability for a region already heavily reliant on federal assistance.

“In some places, grocery stores are empty, and in other places the prices are really shocking. I try to take pictures when I’m in some of the small communities and share the prices of things with people because you really wouldn’t believe it unless you see it for yourself,” he said.

While the Northwest Territories used to have an exemption to the carbon tax on home heating fuels, the federal government announced in August 2021 that in addition to the carbon price increasing on April 1, 2023, a new guideline would come into place that prohibited carbon tax rebates that directly offset or negated the impact of the carbon tax.

To comply with the federal government’s new criteria, the Northwest Territories discontinued its carbon tax rebates for heating fuel, instead increasing payments through the NWT Cost of Living Offset by $135 per resident.

On Oct. 26, the Liberal government announced it would implement a three-year carbon tax exemption for home heating oil, which would be accompanied by increased subsidies for electric heat pumps. But Mr. Simpson said those heat pumps won’t function properly in the Northwest Territories minus 30 degree weather. “It’s not feasible. I’m sure that technology will get there, but at this point it’s just not there,” he added.

Prime Minister Justin Trudeau has repeatedly said there will be no further exemption to the carbon tax, despite requests from several premiers and constant pressure from Conservative Leader Pierre Poilievre.