The Petroleum Products and Carbon Tax Act and its amendment R-009-2024, introduce changes to the regulations governing petroleum products and carbon taxation in the Northwest Territories (NWT). Under section 23 of the Act, the Minister has implemented amendments around tax credits, rebates, and revenue sharing, particularly with regard to the carbon tax applied to diesel heating fuel and the allocation of tax revenue to community governments.

One of the key amendments involves adjustments to tax credit provisions. The revisions focus on section 6.1, where the phrase “pay or credit” has been replaced by “credit,” ensuring that rebates or tax-related adjustments are given to purchasers in the form of credits at the point of sale rather than as direct payments. For instance, subsection 6.1(2) now mandates that vendors credit the purchaser for any applicable rebates, and subsections 6.1(3) and 6.1(4) further emphasize that rebates are credited, not paid, to the buyer.

Another significant change is the introduction of section 6.11, which addresses carbon tax rebates for diesel heating fuel. Diesel heating fuel is defined as diesel used to provide heat or hot water to a building, and the provision is in effect from April 1, 2024, to March 31, 2027. During this period, vendors must credit a rebate equal to the carbon tax imposed on the sale of diesel heating fuel at the point of sale. However, large emitters are excluded from this rebate, meaning that only smaller purchasers or non-commercial buyers will benefit. Vendors are also required to issue receipts that clearly indicate the carbon tax and the corresponding rebate, and if a purchaser does not receive the rebate, they can apply to the Minister for reimbursement within one year of purchase.

The amendment also introduces a framework for community government carbon tax revenue sharing through section 6.5. This provision creates a mechanism for distributing carbon tax revenues to community governments as defined in the Act. The total amount of carbon tax revenue sharing grants for each fiscal year will be calculated and distributed among community governments based on percentages outlined in a newly added Schedule A, which specifies the share each community government is entitled to receive.

Additionally, section 7(3) has been modified to improve the method for calculating and securing tax payments on petroleum products or natural gas consumed during single trips in the NWT. Applicants for single-trip permits will be required to pay two deposits: one for fuel tax and another for carbon tax, both calculated based on the estimated kilometers traveled during the trip. Subsection 7(3.1) further clarifies that these deposits should be rounded to the nearest dollar.

These amendments aim to improve the process for tax credits, introduce specific rules for diesel heating fuel rebates, and create a fair revenue-sharing model for community governments, ensuring the efficient and equitable distribution of carbon tax revenues.

Northwest Territories (R-009-2024) March 31, 2024