As the GNWT awaits clarity on federal carbon pricing, the territories and provinces are “facing a mess that is derailing more and more each passing week,” said MLA Cory Vanthuyne.
“(Carbon pricing) is going to move money from your left pocket to your right pocket. Simply put, it’s a wash,” he said in the Legislative Assembly Oct. 12.
The GNWT hasn’t signed on to carbon pricing just yet, but has an memorandum of understanding in the final drafting stages, said Finance Minister Robert C. McLeod.
The GNWT initially opposed carbon pricing because it would have had a “detrimental effect” on people in the NWT, he said.
Once it was clear the federal government was going to proceed with carbon pricing regardless of the territory’s stance, the GNWT developed an approach that would “benefit or minimize the impact of the federal backstop,” said McLeod.
The cost of living in the North is “motivation enough” to deter Northerners from consuming fossil fuels, said Vanthuyne.
The GNWT maintains that it is working with the federal government on a “made in the North” regime. The GNWT’s plan, outlined earlier this year, won’t be “strong enough” to force people to reduce their carbon-intensive behaviours, said Vanthuyne.
“The ‘made in the North’ carbon pricing appears to be a pointless, symbolic gesture that will cost our government a lot of money to administer but will do very little for the world’s climate,” he said.
Vanthuyne asked the government to promote incentive-based measures to support Northern residents, businesses and the environment.
As other Canadian provinces back away from carbon pricing – Saskatchewan, Alberta, Ontario and Manitoba are all out and PEI says it can meet targets without it, said Vanthuyne.
“Let’s join the rest of Canada and get off this sinking ship called the carbon tax,” said Vanthuyne.
Carbon pricing is “designed to help consumers and business to transition off fossil fuels and to transition towards less carbon intensive sources of energy,” said Craig Scott, executive director of Ecology North.
“Economists almost all agree that this is the most elegant and simple solution to do this,” said Scott.
One of the earliest adopters of carbon pricing is Sweden. Today they price carbon at $164 per tonne, but started at $10 per tonne in the 1990s. As a result, individual Swedes emit around 18 per cent of Canada’s per capita emissions.
“Now they’re one of the leaders in electric vehicles, biomass heating and effective use of waste,” said Scott.
The federal government will institute its carbon pricing regime next year, pricing each tonne of emissions at a $10 minimum.
The carbon price will increase by $10 annually until 2022, where the target price will be $50 per tonne.
In 2016, Premier Bob McLeod banded with Yukon and Nunavut premiers to challenge federal carbon pricing. Months later, the GNWT signed on to the PanCanadian Framework on Clean Growth and Climate Change in support of carbon pricing.
While the new plan is “not perfect,” it should address some concerns from the public, said finance minister Robert C. McLeod.
“I think even the federal government realizes that, in the Northwest Territories … our situation is a little different,” said McLeod.
The NWT is looking to leverage funding for transitional projects in the NWT that will reduce emissions.
Northern communities are taking up projects to lower emissions, including Colville Lake which has installed solar panels, Diavik and its windmills and people do individual upgrades to their homes.
The GNWT is monitoring what other jurisdictions are doing across the country and is still in talks with Ottawa, said McLeod.
“They will implement. They will have their fight with the other jurisdictions. I just want to be sure that our territory is ready, that when the date comes to implement carbon pricing, we are ready,” he said.
The territorial carbon pricing regime offers a rebate on heating fuel and will charge a tax on transportation fuel, with an exemption for aviation.
It will also create a rebate program for heavy emitters to encourage investments to reduce greenhouse gas (GHG) emissions.
Residents will see a line on their bill that includes a rebate for heating fuel, propane and heating oil.
Changes to the Income Tax Act will introduce benefits to offset the impact of carbon pricing on the cost of living. The benefits will increase with the price of carbon and neutralize 100 per cent of the carbon tax for heating fuel for most residents, businesses and governments.
Fully implemented, the benefit will rebate up to $260 annually for each NWT resident 18 years and older and $300 per child under 18.
“The average person in the NWT is going to be better off, they’re going to have more money in their pocket when this is instituted,” said Scott.
There will be “winners and losers,” he said. People with big families and low emissions will have more money, while people who are heavy emitters and drive big trucks or idle “might not have as much money in the end.”
A carbon tax isn’t “scary” and is important for transitioning off fossil-fuels, said Scott. The increase at the pumps could be around 2.7 cents per litre.
The NWT spends generously on fuel imports and carbon pricing could encourage businesses to decrease their emissions to save money, said Scott.
“Do we want to continue to spend our hard earned dollars in Alberta and the U.S. to import fossil fuels or do we want to spend that money to build an economy around green energy and green jobs in the NWT? That’s what the carbon tax will stimulate,” he said.
Revenues from the NWT Carbon Tax are earmarked for green initiatives, totaling more than $40-million over five years. It will be the main funder for projects under the 2030 Energy Plan, including Inuvik wind power, transmission for Fort Providence, Whati and Kakisa and solar projects in Fort McPherson, Ulukhaktok, Paulatuk, Wekweeti and Tsiigehtchic.