Skip to content

MLAs shoot down ‘made-in-the-North’ carbon tax proposal

MLAs in the legislative assembly have determined that Bill 60, An Act to Amend the Petroleum Products and Carbon Tax Act, isn’t ready to be passed.
Yellowknife North MLA Rylund Johnson, chair of the legislative assembly’s Standing Committee on Government Operations, moved that the proposed legislation on amending the NWT’s carbon tax not go forward for a vote in the house. NNSL file photo

MLAs in the legislative assembly have determined that Bill 60, An Act to Amend the Petroleum Products and Carbon Tax Act, isn’t ready to be passed.

A report from the Standing Committee on Government Operations was read in the assembly on March 1 with the message that the committee saw no benefit to passing the bill in the House, should it come to a vote.

Yellowknife North MLA Rylund Johnson, the committee’s chair, said the GNWT simply has not provided the committee with enough information to show that its approach is better than the federal proposal.

The federal backstop is what would come into effect if the assembly doesn’t pass its own version of a carbon tax bill by April 1. Finance Minister Caroline Wawzonek introduced the “made-in-the-North” bill in October 2022.

Johnson said one of the big factors that went into the decision was the failure of the Department of Finance to answer questions the committee felt were important, such as the impact the bill would have on emissions; the economic impact on certain groups, such as community governments, NGOs, businesses and Indigenous governments; and a comparison between the federal backstop and and the GNWT’s version.

“Committee asked for more detailed information and analysis on the advantages and disadvantages of the made-in-the-NWT approach compared with the federal backstop,” he said. “This missing information from the department made it hard for the committee to assess which approach is better for the NWT and to identify ways to improve either approach.”

Inuvik Twin Lakes MLA Lesa Semmler, the committee’s deputy chair, said she found the GNWT’s approach problematic and that those who wrote submissions or attended public hearings were disappointed in the GNWT’s “minimal consultation and public information.”

“It stands in stark contrast to the Yukon’s approach to carbon tax consultation, which featured a public survey, public information sessions and targeted information sessions with local governments and First Nations,” Semmler said.

She also pointed out that there are few alternative sources of energy in the NWT; many communities rely on diesel generation for electricity, she said. Meanwhile, the NWT Power Corporation allows for 2.6 megawatts of renewable energy capacity out of of an average of 13.2 megawatts of power load across 25 communities — making renewables a maximum of 20 per cent of the electricity mix.

“Without alternatives, Northerners have no choice but to pay more for the fossil fuels they rely on,” said Semmler. “As a result, the tax has a minimal effect towards reducing emissions.”

Rebate split disputed

Kam Lake MLA Caitlin Cleveland, another of the committee’s deputy chairs, said the GNWT should focus on giving more of the expected carbon tax revenue to community and Indigenous governments, businesses and NGOs as opposed to turning over a significant portion to the larger emitters.

She pointed to the Department of Finance’s estimates of how much will be collected through carbon tax revenues — $63 million — with only $47 million of that going toward cost-of-living offsets. $24 million of that offset cash is earmarked for large emitters while, by contrast, $20 million is going toward cost-of-living offset and cost-of-living heating rebates to households.

The other $16 million, she said, will be going into general revenues. There was no mention of the remaining $3 million during Wednesday’s discussion.

“Committee finds that the government’s overall rebate approach allocates too much to large emitters, and to its own revenues, and not enough to other key impacted groups,” said Cleveland. “The rationale provided by government that retail businesses can simply pass along the carbon tax to customers, that businesses will be eligible for GNWT energy savings programs, and that NGOs can adjust, is not accepted by committee.”

There were several recommendations made by committee including: the legislative assembly convey to the federal government the specific needs and circumstances of the NWT in its approach to climate change, including a letter to Prime Minister Justin Trudeau requesting a reply; the NWT Power Corporation increases the cap on renewable energy generation that residents and communities can install to offset their power use; the GNWT provide funding to community governments to compensate for increased carbon tax payments — Cleveland suggested $2.2 million for the upcoming fiscal year — with proportional increases; create a law that requires all carbon tax revenues to be rebated to households, businesses, community governments, Indigenous governments, and non-governmental organizations and; that the GNWT provide a response to the committee’s report within 120 days.

Johnson moved that the bill be sent to the Committee of the Whole for further consideration.

About the Author: James McCarthy

Read more