Last-ditch bid to move NWT carbon tax start date fails

An attempt to move the start date of the NWT’s new carbon tax to January 2020 failed in the legislature on Monday, paving the way for the tax to come into effect on September 1.

Kam Lake MLA Kieron Testart urged colleagues to push back the tax’s start date until after the forthcoming federal and territorial elections.

However, finance minister Robert C McLeod warned the federal government would implement its own backstop on September 1 if the NWT abandoned its own plan.

Testart’s motion failed by 12 votes to five, as many regular MLAs said they could not risk the federal backstop coming into effect.

McLeod had said the federal backstop would mean significantly higher heating costs for northern households, whereas the NWT’s plan offers a 100 percent rebate at the point of issue.

Little is known about how a federal backstop – which had not, until this point, been seriously considered – may look. Ottawa has tailored its backstop to each of the jurisdictions in which it has taken effect, and no NWT-specific draft of the backstop was ever publicized.

The committee of MLAs reviewing the NWT’s carbon tax legislation earlier complained that Ottawa had not released sufficient information about the backstop even to territorial politicians when requested.

“We need to give our citizens more time to weigh in on this crucial decision for our economy and not leave it up to governments to decide on the future of this plan,” Testart said in calling for a delayed start date. A territorial election is to take place on October 1, with a federal election later that month.

‘What could be’

While the Liberal government is committed to carbon pricing, the federal Conservatives have suggested they would do away with the carbon tax if elected.

Testart also noted that Alberta, which ditched its provincial carbon pricing earlier this year, had been given until January 1, 2020 before the federal backstop kicks in – and questioned why the NWT was not afforded the same leniency.

“That’s a hostile government [to the Liberal government] that scrapped its carbon pricing plan and even in that circumstance, the federal government allowed them until January 1,” said Testart.

However, on receiving copies of a letter from the federal government confirming the backstop would begin on September 1 if no NWT plan were introduced, other MLAs said they could not vote for the delay.

“We see this in writing. It says September 1. I can’t chance what could be, to what the reality is,” said Nahendeh MLA Shane Thompson, expressing grave concern at the federal backstop’s potential financial impact on Elders in the Dehcho.

Nunakput’s Herb Nakimayak and the Mackenzie Delta’s Sonny Blake voiced similar opinions.

Testart’s motion was eventually supported by only Frame Lake’s Kevin O’Reilly, Yellowknife Centre’s Julie Green, the Dehcho’s Michael Nadli, and Yellowknife North’s Cory Vanthuyne.

Gas prices

The vote came as MLAs considered for the last time the two pieces of legislation, Bill 42 and Bill 43, that will create the carbon tax and its related system of offsets and rebates.

Both bills have now come through that process, removing the last remaining obstacles to the carbon tax becoming law.

The NWT government maintains that many families will find themselves better off after the tax than they were before it, thanks in particular to a cost-of-living offset to be provided to residents.

However, community governments say there are not enough rebates to cover their operations and they will be forced to pass on additional costs to residents.

Even the minister introducing the tax has admitted he does not like it and hopes it gets repealed at the earliest future opportunity.

But finance minister McLeod said the NWT’s own carbon tax was vital to protect the interests of northerners for as long as Ottawa insisted on some form of carbon pricing being introduced.

September 1 already represents a two-month delay from the tax’s original introduction date in July. Two months ago, McLeod said the tax would need to be delayed owing to a legislative backlog.

Most residents will see the effects of the tax primarily at the gas pump, where it is set to trigger an increase of about five cents per litre. Aviation fuel is exempt from the tax.