This is page numbers 5945 - 5992 of the Hansard for the 18th Assembly, 3rd Session. The original version can be accessed on the Legislative Assembly's website or by contacting the Legislative Assembly Library. The word of the day was public.

Topics

The Speaker

The Speaker Jackson Lafferty

Masi. Member for Sahtu.

Daniel McNeely

Daniel McNeely Sahtu

Thank you, Mr. Speaker.

The Public Review of Bills 42 and 43

Timing of Review

Rule 75(1) of the Rules of the Legislative Assembly provides that a bill referred to a standing committee "shall not be proceeded with until the Assembly receives the report of the committee or 120 calendar days pass from the day the bill was given second reading." Convention provides that, should the 120-day period expire while the House is not sitting, committee must report the bill on the first day of the next sitting of the Legislative Assembly.

On June 5, 2019, the Finance Minister made a statement in the Legislative Assembly advising that the GNWT now intended to implement a carbon tax in the Northwest Territories on September 1, 2019. This statement, which appeared to be directed at the federal government, suggested that there was a delay in the legislative process and that "this delay was unintended and in no way should be considered as a lowering of the government's commitment to implementing the NWT carbon tax."

Given that the 120-day period allowed for the review of Bills 42 and 43 expired well after the spring sitting of the Legislative Assembly, committee is of the view that it has been required, from the outset, to report the bills on August 12, 2019, the first day of the final sitting of the 18th Legislative Assembly, regardless of the GNWT's planned July 1, 2019 carbon tax implementation date. While it is perhaps moot at this point in the terms of the 18th Assembly, committee nonetheless encourages Cabinet Ministers to keep in mind the time allowed by the rules for standing committee review of bills when planning its legislative calendar.

Challenges in Comparing Options

Before commencing its review of Bills 42 and 43, committee undertook to analyze and compare the GNWT's approach with the federal backstop, which is based on Canada's output based pricing system. This system establishes emission intensity standards for various large industrial sectors based on average emissions per unit of output.

Committee found it challenging to assess the salient differences between the two approaches. While Finance provided ample material regarding the GNWT's proposed approach, the key features of the federal backstop were more difficult to ascertain. For example, Finance provided committee with a figure indicating the estimated "effective carbon tax" for small emitters under the GNWT's approach, which is the average carbon tax per tonne of emissions. Committee asked both Finance and Environment and Climate Change Canada for the corresponding figure under the federal backstop. Committee also requested information on the annual net carbon tax revenues deriving from small emitters under the federal output based pricing system.

The GNWT's response, while detailed, did not provide committee with the figures it sought. The response from the federal Minister of Environment and Climate Change Canada completely disregarded committee's inquiries, instead referring committee to public information on the Government of Canada's website about the output based pricing system that is technically detailed and not specific to the Northwest Territories. Similarly, a lack of detail about the federal government's approach to offsetting the carbon tax for small businesses and municipalities, made direct comparisons with the GNWT's proposal difficult.

Mr. Speaker, I pass the rest of the reading on to the Member from the Deh Cho. Thank you.

The Speaker

The Speaker Jackson Lafferty

Masi. Member for Deh Cho.

Michael Nadli

Michael Nadli Deh Cho

Mahsi, Mr. Speaker.

Confidential Information and Nature of the Bills Inhibited Public Consultation

Committee originally planned to hold public meetings in Fort Providence, Hay River, Inuvik, and Yellowknife. However, on May 8th of this year, two thirds of the way through the formal 120-day review period, committee was notified in writing by the Finance Minister that the GNWT had revised its carbon tax approach for large emitters, those emitting 50,000 tonnes or greater of annual greenhouse gas emissions. This was of concern to committee, which already felt that the GNWT's proposed approach to large emitters was too generous. Committee was advised that this adjustment was necessary to better align the GNWT's approach with the federal backstop, details of which were only released by Canada in December 2018.

Committee had hoped that additional information about this change in approach would be made public by the Minister during the May-June sitting, including details provided in confidence to committee. When this information was not shared with the public, committee subsequently issued a news release on June 7th advising of its decision to postpone the planned public consultations until more information was provided by the Department of Finance.

Committee asked that as much detail as possible related to the committee's specific questions be shared with the public. Unfortunately, as with much of the other information shared by Finance with committee, the responses to these questions were marked "Confidential - Not for Distribution." This is particularly vexing with respect to Bills 42 and 43, where the majority of the GNWT's proposal is not contained in the legislation itself but in regulations and other public policy instruments.

Committee is not at liberty to disclose information provided in confidence by Cabinet Ministers. Unfortunately, the large majority of the correspondence received by committee from the Finance Minister on this initiative, including responses to committee's questions, was marked confidential, thereby prohibiting committee from publicly disclosing its contents. This also inhibited committee's ability to engage in a meaningful consultation. For example, committee's inability to disclose the information contained in Finance's May 8 letter rendered committee unable to explain to the public, even with the writing of this report, how the GNWT's approach to large emitters has changed.

Plain-Language Summaries Provided

Committee wrote to the Minister requesting plain-language explanations of Bills 42 and 43 that could be shared with the public.

Committee wishes to take this opportunity to thank the Minister for responding positively to the committee's request by preparing plain-language summaries of both bills that could be shared with the public. It is committee's experience, based on consultations undertaken over the course of the 18th Assembly, that simple, straight-forward information for NWT residents outlining the purposes of changes to the law and the impact of those changes is vital to obtaining meaningful input from the public. Too often, committee finds itself having to explain government-sponsored bills, leading to confusion about the role of standing committees and the legislative process. Accordingly, committee makes the following recommendation.

Recommendation 1

The Standing Committee on Government Operations recommends that, for all bills proposing to establish, replace, or make significant changes to territorial legislation, a plain-language summary be prepared and made available to the appropriate standing committee at the time the bill is introduced in the Legislative Assembly.

Committee sent out a second news release on July 15th, indicating that it still lacked sufficient detail to enable committee to adequately answer questions from the public on these Finance-sponsored bills. This consideration, along with timing constraints, led committee to the decision to request written submissions from the public and hold a single public meeting in Yellowknife on August 1st.

Mr. Speaker, I now pass on the reading responsibilities to my honourable colleague, to my colleague for Hay River North.

The Speaker

The Speaker Jackson Lafferty

Masi. Member for Hay River North.

R.J. Simpson

R.J. Simpson Hay River North

Thank you, Mr. Speaker.

PUBLIC INPUT AND COMMITTEE RECOMMENDATIONS

Committee received four submissions on Bills 42 and 43. These submissions from the NWT Association of Communities (NWTAC), the City of Yellowknife, Arctic Energy Alliance, and a joint submission from Ecology North and Alternatives North are appended to this report. A representative of the NWTAC also attended committee's public hearing to present the association's submission.

While the submission from the NWTAC indicates general support for the GNWT's approach over the federal backstop, it points out that, without a cost-of-living offset, the carbon tax will end up costing municipalities. This is occurring at a time when the GNWT has acknowledged a significant gap between municipal funding needs and funding support received from the territorial government. In fact, the NWTAC submission alleges that when this concern was raised with the Department of Finance, municipalities were advised that they would "just have to increase their property taxes." Committee is dismayed to hear such a report and feels that more should have been done in the GNWT's approach to mitigate the impacts of the carbon tax on underfunded local authorities. Accordingly, committee makes the following recommendation.

Recommendation 2

The Standing Committee on Government Operations recommends that the Government of the Northwest Territories, led by the Department of Municipal and Community Affairs, complete its work to assess the municipal funding gap on an urgent basis, taking into consideration the increased costs of the carbon tax to all local authorities, and that additional forced growth funding to compensate for these costs be included in the 2020-2021 budget.

The City of Yellowknife's submission also notes chronic underfunding by the GNWT and points out that, while the NWT houses 50 percent of the territories' population, none of the projects identified in the 2030 energy plan over the next five years are scheduled for Yellowknife. The city recommends making revenues available to community governments in order to support actions set out in their Community Energy Plans. Committee notes that the GNWT's Department of Infrastructure administers a GHG Grant Program for Government, which is designed to fill a gap in funding for larger GHG reduction initiatives. Under this program, in place until March 31, 2022, applicants may be eligible to receive up to 75 percent of eligible project costs.

The City of Yellowknife's submission points out that "if the proposed carbon pricing regime does not accomplish a reduction in GHG emissions it has merely created an unnecessary administrative burden and cost to residents and businesses," recommending that "the GNWT re-evaluate the program after implementation to ensure that it is making a difference."

This recommendation for program evaluation is also contained in the joint submission from Ecology North and Alternatives North, which recommends that there should be "an annual reporting mechanism that evaluates and measures the effectiveness of the tax in meeting its purpose."

Committee fully agrees that there should be both annual reporting on the carbon tax and program evaluation to determine the effectiveness of reducing GHG emissions in the Northwest Territories and to guide future policy decisions. Committee raised these issues during its in-camera discussions with and correspondence to the Department of Finance.

Committee also sought the advice of the law clerk regarding the potential to amend Bill 42 to include reporting requirements. Committee was advised that such an amendment would likely be ruled out of the scope of the bill given that there are no provisions currently contained in the Petroleum Products Tax Act mandating reporting and that the scope of the bill is narrowly defined to allow for the imposition of the tax and the provision of grants and rebates through regulation.

During the clause-by-clause review of Bills 42 and 43, the Minister indicated that he had made a commitment to committee that the department would undertake annual reporting on the carbon tax. While committee is pleased to hear this, a commitment made during an in-camera discussion did not carry the weight of a public commitment. Therefore, to provide for this public commitment, committee makes the following recommendation.

Recommendation 3

The Standing Committee on Government Operations recommends that the Department of Finance table an annual report in the Legislative Assembly on the carbon tax that provides details on total carbon taxes collected; carbon taxes collected from large emitters; total rebates provided; number and nature of grants provided; costs of administering the carbon tax; reinvestment of carbon tax revenues; projected tax revenues for coming year; and an annual plan for future year reinvestment of carbon tax revenues.

With respect to program evaluation, committee makes the following recommendation.

Recommendation 4

The Standing Committee on Government Operations recommends that the Department of Finance undertake an annual assessment of the impacts of the carbon tax on greenhouse gas emissions in the Northwest Territories to be reported in the annual report. This should be integrated with the reporting on GHG emissions under the Climate Change Strategic Framework and energy projects under the Energy Strategy. This will allow an evaluation of whether the carbon tax is effective in reducing GHG emissions.

Recommendation 5

The standing committee further recommends that the Department of Finance undertake a comprehensive review and evaluation of its carbon tax approach, including public consultation, to be completed after the program is fully implemented in 2022. The purpose of review is to determine the effectiveness of the program on reducing GHG emissions and to assess its impacts on the NWT economy in order to develop program improvements.

The submission received from the Arctic Energy Alliance asked committee to consider the inclusion of a provision in the Petroleum Products Tax Act to allow for the disclosure of fuel sales data at the community level to address significant gaps in the organization's knowledge of energy use in the Northwest Territories. The committee is sympathetic to this request and Members appreciate that good data is essential to well-informed, evidence-based decision making. Unfortunately, the same issues of scope that prevented committee from including annual reporting requirements in Bill 42 also prevent the inclusion of a clause mandating the release of this information as it is not related to the collection or expenditure of carbon tax revenues.

I will now pass the reading on to the Member for Kam Lake.

The Speaker

The Speaker Jackson Lafferty

Masi. Member for Kam Lake.

Kieron Testart

Kieron Testart Kam Lake

Thank you, Mr. Speaker. Thank you, colleagues.

CONCLUSION

The clause-by-clause review of the bill was held on August 7, 2019. Committee thanks the honourable Minister of Finance and his officials for their appearance before the committee. Committee did not move any motions to amend Bills 42 or 43.

Rule 100(5) of the Rules of the Legislative Assembly of the Northwest Territories requires Cabinet, in response to a motion by committee, to table a comprehensive response that addresses the committee report and any related motions adopted by the House. As required by this rule, committee usually includes a recommendation in each report, which is moved as a motion in the House, requesting a response from government within 120 days. Given that the 18th Legislative Assembly will dissolve prior to the conclusion of the 120-day time period allowed by the rules, committee has opted to forego this recommendation. Committee nonetheless requests, to the extent it is possible before the dissolution of the 18th Assembly and for the public record, that government provide a response to the recommendations contained in this report, even of a preliminary nature, that committee may publicly disclose.

This concludes the Standing Committee's review. Thank you, Mr. Speaker.

The Speaker

The Speaker Jackson Lafferty

Masi. Reports of standing and special committees. Member for Kam Lake.

Kieron Testart

Kieron Testart Kam Lake

Thank you, Mr. Speaker. I move, seconded by the honourable Member for Hay River North, that Committee Report 26-18(3): Standing Committee on Government Operations Report on the Review of the Carbon Tax Bills, Bill 42: An Act to Amend the Petroleum Products Tax Act and Bill 43: An Act to Amend the Income Tax Act be received by the Assembly and moved into Committee of the Whole for further consideration. Thank you, Mr. Speaker.

The Speaker

The Speaker Jackson Lafferty

Masi. The motion is in order. The motion is non-debatable. All those in favour? All those opposed?

---Carried

Committee Report 26-18(3): Standing Committee on Government Operations Report on the Review of the Carbon Tax Bills, Bill 42: An Act to Amend the Petroleum Products Tax Act and Bill 43: An Act to Amend the Income Tax Act is now received by Assembly, is now moved to Committee of the Whole for further consideration. Masi. Reports of standing and special committees. Item 5, returns to oral questions. Item 6, recognition of visitors in the gallery. Member for Yellowknife North.

Recognition Of Visitors In The Gallery
Recognition Of Visitors In The Gallery

Page 5966

Cory Vanthuyne

Cory Vanthuyne Yellowknife North

Thank you, Mr. Speaker. I would like to take the opportunity to recognize Fernanda Martins, the executive director of the NWT chapter for the Canadian Cancer Society and a Yellowknife North resident. Welcome.

I would also like to take this opportunity to recognize four Pages from the riding of Yellowknife North; Zefer Jordison, Lea Schwarz, Jaylen Base-Smith, and Quinton Base-Smith. Thank you all for the tremendous work you do for us here in the Assembly. Thank you, Mr. Speaker.

Recognition Of Visitors In The Gallery
Recognition Of Visitors In The Gallery

Page 5966

The Speaker

The Speaker Jackson Lafferty

Masi. Recognition of visitors in the gallery. If we missed anyone in the gallery, thanks for being here with us. It is always nice to have an audience as part of our proceedings. Masi. Item 7, acknowledgements. Colleagues, at this point in time, we are going to call for a short break.

---SHORT RECESS

Recognition Of Visitors In The Gallery
Recognition Of Visitors In The Gallery

Page 5966

The Speaker

The Speaker Jackson Lafferty

Colleagues, we left off at item 7, acknowledgements. Now we are on to item 8, oral questions. Member for Nunakput.

Herbert Nakimayak

Herbert Nakimayak Nunakput

Thank you, Mr. Speaker. Earlier on, I spoke about the amount of salmon being caught in fish nets across Nunakput, and my questions are for the Minister of ENR. Mr. Speaker, my first question is: has the department responded to communities who are experiencing higher than normal salmon catches this season? Thank you, Mr. Speaker.

The Speaker

The Speaker Jackson Lafferty

Masi. Minister of Environment and Natural Resources.

Robert C. McLeod

Robert C. McLeod Inuvik Twin Lakes

Thank you, Mr. Speaker. There is currently a University of Manitoba Department of Fisheries and Oceans Salmon Research Project addressing the issue of salmon being captured in the Canadian Arctic in more places and in seemingly higher numbers than ever before.

Locally, in our office, there is an assistance program, CIMP, with community members taking any salmon that local residents wish to provide to the research program. The project actually is to see why there is starting to be large numbers of salmon in the Canadian Arctic. There are year-to-year changes in the harvest levels which are likely related to changing environmental conditions in the salmon population. Thank you, Mr. Speaker.

Herbert Nakimayak

Herbert Nakimayak Nunakput

Earlier on, the Minister made a statement about funding for community-based projects, and this sounds like a project that can increase capacity in the region. Mr. Speaker, this increase has salmon has been occurring for a few seasons in higher numbers, but this year has been quite noticeable. My question to the Minister is, will ENR partner with the Department of Fisheries and Oceans, hunters and trappers committees in the Northwest Territories in tracking these invasive species?

Robert C. McLeod

Robert C. McLeod Inuvik Twin Lakes

We work with a DFO researcher who leads the Arctic salmon research project in partnership with the local and resource boards to track salmon in the Arctic. The Member is absolutely correct. The NWT CIMP that I announced before actually supports the project and has promoted research through its regular, northern research bulletins.

Herbert Nakimayak

Herbert Nakimayak Nunakput

I appreciate the response from the Minister. What about the Arctic char, the coney, the whitefish and the herring, and other fish species that we rely on in the Arctic? They make up a high percentage of food and nutrients for Nunakput residents. This can be looked at as a threat to our food security, not just in Nunakput, but all communities across the territories. My question is: what will the department do to ensure the planning for community-based monitoring of these species, as well as other type of species that are now entering our waters, for the fall season as the ice will set in and the nets are put under the ice in the communities across the Northwest Territories?

Robert C. McLeod

Robert C. McLeod Inuvik Twin Lakes

As the Member mentioned before, there are a lot of changes that are going on, and we have heard that about a lot of species that we have seen in some places that they are not used to being seen there. The Arctic Salmon Research Project is actually looking into what the appearance of salmon means to the native fish species. The lead researcher regularly reports back to the community, and my understanding is the project does rely on some of the salmon that is turned in by community fishers, and my understanding, again, there are a couple of different value gift cards that are available to community members who turn in a full salmon or a salmon head. I think there is more information that could be obtained as to what that consist of and, if the Member wants or if the community doesn't have access to that information, I will be sure that they get it.

The Speaker

The Speaker Jackson Lafferty

Masi. Oral questions. Member for Kam Lake.

Kieron Testart

Kieron Testart Kam Lake

Thank you, Mr. Speaker. I have questions for the honourable Minister of Finance on the state of our fibre optic telecommunications infrastructure. Has the government done any planning to investigate improving our redundancy, so when a fibre line is cut, in particular to my community of Yellowknife, but when a fibre line is cut, it doesn't knock everything out of there? Are there more options to keep the systems going so that they don't cause that massive interruption to businesses and households? Thank you, Mr. Speaker.

The Speaker

The Speaker Jackson Lafferty

Masi. Minister of Finance.

Robert C. McLeod

Robert C. McLeod Inuvik Twin Lakes

Thank you, Mr. Speaker. We have raised concerns both with redundancy, with the provider Northwestel and with CRTC, and we continue to work actively with industry partners to explore viable and affordable redundancy measures. I think, with some money that has been made available by the federal government in improving northern broadband, I think one of the industry partners, Northwestel, has accessed on that money to possibly run a redundancy line down the Dempster Highway to serve that area. I take the Member's point that there needs to be redundancy looked at for this part of the Northwest Territories, and we will continue to work with our industry partners to ensure that that work is ongoing.