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NWT Chamber: The unintended consequences of Ottawa-centric policymaking

We used to call them sin taxes.
The NWT Chamber’s column was published in News/North the same day as its written submission was part of the Standing Committee on Government Operations at the NWT Legislative Building. Photo by James O’Connor

We used to call them sin taxes.

With every budget passed in decades of yore, governments would grab more revenue through hikes to tobacco and liquor taxes. Who could object to our leaders trying to dissuade the populace from consuming cigarettes and alcohol?

But nowadays, a ‘sin’ is apparently in the eye of the beholder — or in the cabinet room of whatever party is in power. And using carbon-based substances to provide heat and power for our vehicles is most definitely a sin, says our current federal government.

I explored the troubling incoming hikes to the federal carbon tax regime in my column earlier this month. The NWT Chamber also provided a written submission to the Standing Committee on Government Operations, in which we stated the proposed changes will gravely impact the private business sector and overall territorial economy.

While the concept of using a tax on carbon to encourage conservation and fund green alternatives can be effective if used judiciously, the impact on the NWT economy with the increased taxes this spring is no joke. In fact, proceeding with the April 1 tax implementation is a downright foolish move for the federal government if it cares at all about private business and the overall cost of living in the North.

We are not alone with our concerns, judging by comments made at the standing committee earlier this month.

“You have a dictator trying to tell (us in the NWT) what to do from Ottawa,” said Thebacha MLA Frieda Martselos, a former chief of the Salt River First Nation in Fort Smith. “And I don’t like it that there’s another further moratorium on energy from the Beaufort Delta.”

Days before the committee meeting, the Trudeau government reneged on a promise to ease some restrictions on its 2016 moratorium on Arctic oil and gas development in Canadian Arctic waters, which was expanded in 2019.

‘Dirty work’

Frustrated with that move, which will eliminate employment possibilities and the incoming carbon tax hike that will force choices between “buying food, paying rent or keeping their lights on,” Nunakput MLA Jackie Jacobson told the committee: “The federal government, I think, is blinded in regard to (seeing how) an average person lives in the North (with) the cost of living. I’m not going to do the federal government’s dirty work. They can come up here and do what they have to do. I’m not supporting the bill. I wish you would withdraw it.”

Finance, Industry, Tourism and Investment Minister Caroline Wawzonek said she doesn’t want to risk holding out and then being forced to accept the federal government’s inflexible backstop plan that would not allow for some tailoring of the impact on the NWT’s most vulnerable residents.

But there are more unintended consequences for the North coming from the federal government’s current policy with environmentalism.

Last summer, the feds also slapped a ‘luxury tax’ on vehicles over $100,000. Those of us in the North who actually require a four-wheel drive pickup truck with a few practical or enjoyable options will find themselves easily spending over that limit.

The tax applies to the fair-market-value pricing of the vehicle before any trade-in value is applied. It also applies to any improvements made to a ’luxury’ vehicle.

The tax excludes vehicles used for police, military and a few other categories.

I believe the tax is not only unfair but counterproductive in light of the federal government’s own policy initiatives. I say the latter as the federal government wants us to drive electric vehicles, correct? While a Nissan Leaf, Mazda MX-30 or 2022 Kia Niro EV list for around $45,000 in southern Canada, a Ford F-150 Lightning Platinum (giving 483 kms of driving on a single charge, but significantly reduced in winter, as low as 135 kms) or a vehicle after my own heart, a GMC Hummer EV are $125,000 and $145,000, respectively. Those prices are all before shipping costs to the North are considered.

Even if there were enough fast-charging stations along Highway 3 between Yellowknife and the Alberta border — and even if we weren’t paying three times more for electricity than in Ontario or Quebec — the feds still want us crammed into a tiny vehicle as we bounce along our frost-heaved roadways instead of a comfortable and practical SUV or pickup truck.

If the federal government is serious about Arctic sovereignty, it must come to the understanding that many Canadian laws with their genesis in Ottawa simply pander to concerns of Ontario and Quebec. They do not work well at all in the North and will deter people from living here.

Tu Nedhe-Wiilideh MLA Richard Edjericon told the Standing Committee on Government Operations that young people in his sprawling riding outside of Yellowknife tell him they can no longer afford to live in the communities they grew up in and are looking to move down south.

And that truly would be a sin, stemming from burdensome taxation.