NWT carbon tax public meeting planned as rates go up

The NWT’s legislators will hold an April 8 meeting to discuss a bill that would repeal the territory’s current version of the carbon tax if it passes.

The bill, proposed earlier this year by regular MLAs Kieron Testart and Robert Hawkins, would not get rid of the carbon tax but would place many elements back into federal control, rather than maintain the current NWT-administered version.

Testart says the bill would let the NWT keep its rebate system but leave Ottawa with the task of running things.

“We’re saying: let’s not be forced any more. Give it back to Ottawa. Let them handle it, and we’ll decide how the money is spent,” he told Cabin Radio in February.

NWT finance minister Caroline Wawzonek says that’s not remotely her understanding of what would actually happen if the bill passed.

“The minute we stop collecting carbon tax, which is fundamentally what is contained in the bill, we become non-compliant with the federal system,” said Wawzonek.

“As soon as the federal backstop applies, the revenue generated and paid by Northwest Territories residents and businesses goes to Ottawa, and Ottawa then decides how it gets returned. The claim I’ve heard is that this, somehow, is going to be better than the current system. I don’t see how or why.”

Wawzonek wants the territory to focus on finding the money for climate-friendly alternatives to diesel instead of reworking the carbon tax within the confines of federal restrictions.

According to a Thursday news release, the Standing Committee on Government Operations – a committee of regular MLAs chaired by Julian Morse – will hold a public meeting about the bill at the legislature at 2pm on Monday, April 8.

Residents can attend in person “to share your ideas” about the bill – the draft text of which is now available – or can send feedback in writing.

The bill has been through its first two readings in the legislature.

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.

What carbon tax changes happen on April 1?

While this debate takes place, the NWT’s carbon tax will shift again on April 1 in line with federal requirements.

The carbon tax rate is going up from $65 per tonne of greenhouse gas emission equivalent to $80 per tonne.

As an example, the GNWT’s guide to rates by fuel type suggests the carbon tax on gas in the territory will rise from 14 cents a litre to nearly 18 cents a litre. (The same table suggests the anticipated rate in 2030 will be 37 cents a litre.)

The rate for propane will go up from 10 cents a litre to 12 cents. By 2030, that rate is expected to be 26 cents a litre.

At the same time, April 1 is the day the NWT’s carbon tax rebate for diesel home heating fuel kicks in.

The NWT used to fully rebate the carbon tax on home heating fuel until the federal government told it to stop. Then, within months, the federal government came under so much pressure from Atlantic Canada that it backtracked and introduced an exemption for diesel home heating fuel wherever the federal carbon tax is in use.

The April 1 introduction of an NWT exemption for diesel home heating fuel is the territory catching up with the federal changes.

Meanwhile, the cost-of-living offset payments handed out every three months in the NWT – designed to “reduce the carbon tax burden on residents” – will be reduced from April 1. The payment that shows up in your bank account each quarter won’t be as large as it used to be, regardless of the fuel you use to heat your home.

For a family of four, the annual total of those payments will go down by about $400 to $800, depending on where you live.

As an example, a family receiving $2,872 in annual offset payments in the Beaufort Delta might now receive $2,008 instead, the territory stated.

“Even with this reduction, COLO payments remain higher than the carbon tax paid by most NWT households,” the GNWT said in a statement.

However, people who heat their homes using the likes of propane will in effect lose money from April 1 – their carbon tax will go up, their cost-of-living offset payment will go down and they don’t get the rebate that diesel users will get.

Wawzonek has said the cost-of-living offset payments had to go down to allow the NWT to match the federal exemption on home heating diesel.

Asked about the net loss ahead for people who use fuels like propane, Wawzonek said in February that before, those people had been “further ahead.”

This week, Prime Minister Justin Trudeau said conservative politicians are “misleading Canadians” about the tax and haven’t come up with a viable alternative.

At the federal level, the Liberals, New Democrats and Bloc Québécois all endorse some form of carbon pricing system. The Conservatives and some provincial premiers say they would scrap the tax.

NWT Premier RJ Simpson has said the tax “doesn’t work for the Northwest Territories.”

NWT ministers say that while climate change is real and proving deeply damaging to the territory – last year’s wildfires and evacuations being exhibit A – the tax penalizes northerners for using fossil fuels when no alternatives are readily available and no funding exists to introduce any.

“Nothing that’s happened in the past few years has any sort of precedent, everything is off the charts. You can draw a pretty clear line between that and climate change,” Simpson told a political podcast this week.

“The idea of a carbon price or a tax on anything is to change behaviour … the issue we have up here is things are so expensive already. If that was going to cause us to make the changes, we would have done that.

“We do want to get off diesel, we want to make all of these changes. We don’t have the capacity to do it right now. The carbon tax does help us with the financing for that but it makes life very difficult for a lot of people, especially the farther north you go and in remote communities.”