Nunavut announces carbon rebate

Government plans to subsidize half the cost of the federal carbon tax when it comes into effect July 1

Finance minister George Hickes announced on May 29 the first part of Nunavut’s plan to mitigate the federal carbon tax, which comes into effect on July 1. (Photo by John Thompson)

By Emma Tranter

Nunavut plans to subsidize half the cost of the federal carbon tax to residents when it comes into effect on July 1.

Finance Minister George Hickes announced the plan, calling it the “Nunavut carbon rebate,” yesterday afternoon during committee of the whole.

Hickes said the government plans to spend $3.6 million this year to create the new program, which will come into effect throughout the territory the same day as the federal tax.

Because the territory did not come up with its own carbon tax plan, residents will be subject to the federal government’s backstop tax. The federal government has already said it will return all revenue from the tax to the Nunavut government.

As an example, Hickes said, residents will only see a 2.5 cents per litre increase on gasoline instead of the federal tax’s 5 cent increase.

Through an agreement with Ottawa, fuel used by Qulliq Energy Corporation to generate electricity in the territory and aviation fuel for aircraft operating within the territory are exempt from the tax.

“We know that Nunavummiut do not face the same options as southern Canadians. Because our options are limited, it will be harder for us to change our habits. It will take longer for our economy to adjust,” Hickes said.

Hickes said the government intends to use the revenues they do not immediately give back to fund “other initiatives.” Those include a number of proposed changes to the Income Tax Act.

Those changes are expected to be discussed later this sitting, Hickes said.

As the federal carbon tax increases over the next several years, the rebate will increase along with it, so Nunavummiut will continue to only pay half the amount, Hickes said.

The cost of the new rebate program is about $36 million over this fiscal year and the next three, until 2024.

But the subsidy is not permanent. Starting in 2023-24, the government will slowly reduce the amount of the rebate.

“In effect, Nunavummiut will face the same overall adjustment as other Canadians to the federal carbon tax, but over a period that is twice as long,” Hickes said.

Iqaluit-Niaqunnguu MLA Pat Angnakak asked Hickes how the government plans to alleviate some of the pressures of the tax on low-income residents.

Hickes said Bill 26, which contains changes to the Income Tax Act, contains “measures taken into place to accommodate both low income and high income earners.”

Share This Story

(5) Comments:

  1. Posted by Virtue Signalling on

    I’m glad Nunavut residents would get a break, but it goes to highlight just how dumb the carbon tax is, when so many high users of fossil fuels get exemptions from the costs of the carbon tax.

    If Justin Trudeau was serious about reducing the use of fossil fuels, he’d encourage Nunavut residents to stabilize and reduce their populations, and move to places where jobs are available and the weather is not so cold, requiring so much heat, and so much fossil fuel to import every single thing you need to live, because almost nothing is produced locally. Arctic residential communities have no local economy, and are the highest per-capita users of fossil fuels in Canada, and probably the world.

    • Posted by Asinine on

      Sooo…the federal government should dictate to Inuit where they should live and how they should procreate?

      Those who ignore history are doomed to repeat it.

      #WhatCouldGoWrong?

  2. Posted by Confused? on

    I’m confused… if the Feds have committed to returning all revenue generated from Nunavut back to Nunavut and Hicks has confirmed a rebate to refund 50% of the carbon tax back to Nunavummiut who’s keeping the other 50%? The GN of course! I wonder where this revenue will end up.

    • Posted by Gobble Gobble on

      Hiring southern consultants to create departmental visions, of course.

      • Posted by Pete on

        Hiring consultants to figure out how to spend that 50%, end of the day 10% will be remaining to be put in a program for Nunavut.

Comments are closed.