Range Lake MLA Kieron Testart and Yellowknife Centre MLA Robert Hawkins introduced a private member’s bill on Tuesday that would suspend territorial fuel taxes for a year.
A news release issued after the bill was read for the first time stated it would temporarily remove the territory’s tax on gasoline, diesel, railway and aviation petroleum products.
The NWT does not charge tax on home heating fuel.
The suspension could result in an estimated $15 million in forgone territorial tax revenue, the news release stated.
“Yellowknifers have been clear to me that the cost of living has become a crisis that threatens the well-being of their families,” Testart was quoted as saying.
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Speaking about a possible fuel tax suspension in the legislature last month, finance minister Caroline Wawzonek said the government cannot afford to lose that revenue.
“The $15 million we would lose, if we were to take away the fuel tax in some degree, would have to be made up for somewhere,” said Wawzonek.
“It would have to be made up for by cutting programs or services or by increasing something – some sort of taxes. That is not an option.
“What would we cut, at a time when folks are really quite desperate?”
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The minister added the territory could take on more debt to suspend the tax but that, too, would have consequences.
“The cost of debt right now is not one that we want ratepayers, or taxpayers, or future taxpayers to bear,” said Wawzonek.
Any bill needs to pass second reading, come through a committee review and survive a final vote to become law. That means even if the bill is successful, a tax suspension might not arrive for many months.
There is also no guarantee the bill passes. A private member’s bill means it is brought forward by a regular MLA, not the government. While regular MLAs outnumber cabinet, this kind of bill is usually considered far harder to pass than a government equivalent. A private member’s bill that meaningfully alters the NWT’s tax regime can expect significant scrutiny.
