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.