Federal carbon tax now in effect in Yukon and Nunavut

Starting today, the federal carbon levy will be applied in Yukon and Nunavut, while the Northwest Territories is set to implement its own price on carbon in September.

The Yukon government says carbon emissions will be taxed at a rate of $20 per tonne for the rest of 2019, before rising each year starting on April 1 until the tax reaches $50 per tonne in 2022.

The costs of gasoline, diesel and propane will go up, while the federal carbon pricing act includes targeted relief for aviation fuel in the northern territories, diesel for electricity generation in remote communities and partial relief for greenhouse operators.

The federal carbon pricing act also includes relief for farmers using fuel in tractors, trucks and other farm machinery, as well as relief for eligible fishing activities.

WATCH: Explaining why and how carbon taxes work

0:53 Explaining why and how carbon taxes work

According to the Yukon government, the average individual is expected to pay less in carbon levies than they get back in rebates and the first rebates are expected in October of this year.

In Nunavut, the territory’s finance minister has announced a new rebate program that would subsidize half the costs of the federal carbon tax at the pump, while Ottawa has said it will return all carbon tax revenue it earns from Nunavut back to the territory.