Bill to repeal NWT’s carbon tax clears second reading

A bill that aims to repeal the NWT’s carbon pricing regime in favour of the federal backstop has been referred to a legislative committee for further review.

When the Canadian government implemented the carbon tax, it gave provinces and territories the opportunity to create their own carbon pricing systems or rely on the federal system, known as the backstop.

The NWT government opted to design and implement its own tax and rebate system, following rules set by the federal government.

Now, Range Lake MLA Kieron Testart and Yellowknife Centre MLA Robert Hawkins have introduced a private member’s bill that would scrap the NWT’s carbon tax system, reverting the territory to the federal backstop.

Bills must come through three readings to become law. First and second reading generally happen quite quickly, triggering a months-long review and feedback process. Third reading is the one that ultimately decides whether a bill passes.

During second reading of the Testart-Hawkins bill in the legislature on Wednesday, Testart said the current NWT carbon tax prioritizes large-scale mining over small businesses.

“Individuals very concerned with the future of the climate are unhappy with our carbon tax regime, and people who are concerned about affordability are unhappy with it,” he asserted.

The Range Lake MLA argued that the Yukon and Nunavut already have systems where the federal government collects the tax, then gives the proceeds to those territories – who control their own rebates.

“What this bill proposes to do is … to cut off the middleman and put the responsibility back in the hands of the people who imposed this carbon tax regime on the Northwest Territories in the first place,” he said.

With 10 regular MLAs voting in favour, one opposed and cabinet abstaining, the bill passed second reading. It will now be referred to a committee of MLAs for review.

‘All this trouble for less control’

Not all MLAs are satisfied with the bill – even those who voted in favour of it.

Yellowknife North’s Shauna Morgan was the sole MLA to oppose the bill passing second reading. She doesn’t believe it will address concerns residents have with the current NWT carbon tax.

“The first problem is that the title of the bill is the Carbon Tax Repeal Act, so people could be forgiven for thinking that the carbon tax will be repealed and therefore they won’t have to pay the carbon tax any more,” she said. (To be clear, that wouldn’t be the case. The bill changes who collects it.)

“This bill could not change anything around how much carbon tax people in our communities have to pay,” said Morgan. “All that this bill can change is who collects it.”

Morgan said she hadn’t heard from any constituents who wanted Ottawa rather than the NWT government to collect the carbon tax.

“For the life of me, I cannot understand why we would go to all of this trouble, spend the resources and the time of members and staff, so that we can have less control over the same carbon tax,” she said.

Morgan said that approach could also cause financial uncertainty for the mining industry, while she said the bill fails to address concerns regarding offset payments for large emitters.

Denny Rodgers, the MLA for Inuvik Boot Lake, said he also worries about how the bill could impact the mining industry. But Rodgers said he supported the bill going to committee for review so he could make a more informed decision.

Frame Lake MLA Julian Morse said he shared many of Morgan’s views but supported the bill being investigated further as a way to address broader concerns about the tax.

“My hope is through investigation we can address uncertainties, possibly develop ideas as to how we can address existing shortcomings with the current program, and come forward with conclusive recommendations,” he said.

Wawzonek wants focus on alternatives

Finance minister Caroline Wawzonek, who is responsible for the territory’s carbon pricing regime, said cabinet would be abstaining from the vote as the carbon tax had already gone through public consultation and been reviewed by previous MLAs.

“I would implore colleagues that we not lose time, energy, staff resources and miss an opportunity to talk truly and meaningfully about energy alternatives,” she said, adding she would respect MLAs’ decision if they chose to refer the bill to committee.

In an earlier emailed statement to Cabin Radio, Wawzonek said she remains convinced that the carbon tax can’t achieve its goal of incentivizing change in the North unless there is a major investment in alternatives to which residents could switch.

Writing before she had seen the bill and its detail, Wawzonek said she would fight to preserve the current “made-in-the-NWT approach” rather than hand any control to Ottawa.

“By repealing the carbon tax, the NWT would most likely be deemed ‘non-compliant’ with the federal system; the federal government would then impose its carbon pricing system and decide how the tax revenue is returned to the NWT,” she asserted. (Testart says his bill would allow the NWT to retain control over the revenue.)

Ollie Williams contributed reporting.