Thank you, committee. This concludes consideration of Committee Report 26-18(3). Committee, we have agreed to next consider Bill 42: An Act to Amend the Petroleum Products Tax Act. I will give committee a chance to pull out their acts. It looks like everyone is ready to go. I will turn to the Minister responsible for the bill to introduce it. Minister McLeod.

Thank you, Mr. Chair. I am here to present Bill 42. This piece of legislation, along with Bill 43, are critical pieces of legislation will allow the Government of the Northwest Territories to meet its carbon pricing commitment under the Pan-Canadian Framework on Clean Growth and Climate Change through a carbon tax on all petroleum and natural gas fuels, except aviation fuel.

The purpose of Bill 42 is to amend the Petroleum Products Tax Act to create the carbon tax on petroleum products and natural gas so that the collection and administration of the carbon tax is the same as the current fuel tax.

The legislation being considered today requires us to make a choice. A carbon tax is going to be introduced in the Northwest Territories. Either we will pass this legislation and introduce the related rebates and offsets the GNWT has planned to mitigate the impact of the carbon tax on NWT residents and businesses, or we will allow the federal government to implement the federal carbon tax and Ottawa would make the decisions about how to use the revenues from a carbon tax.

We know, based on how the federal government has implemented the carbon tax in jurisdictions that didn't introduce their own carbon tax, that the GNWT approach is much more favourable to residents, businesses, and communities than the federal backstop approach.

The GNWT approach, when fully implemented, will provide a family of four with over $1,100 annually from the cost of living offset benefit and residents will not have to pay carbon tax on heating fuel as it is being rebated at the point of purchase. This is very significant for Northerners who already pay high costs for heating fuel and face an overall high cost of living.

The rebate of the NWT carbon tax on heating fuel will also mitigate the impact of the NWT carbon tax on small businesses and community governments as they will not face increased heating costs for their facilities. All residents, businesses, and communities will also benefit as we will rebate the carbon tax on fuel used for community electricity production, which will ensure that electricity rates will not have to be increased because of the carbon tax.

Large emitters are facilities that produce more than 50,000 tonnes of greenhouse gas emissions annually. The GNWT approach results in similar overall carbon tax as the federal backstop for these facilities, but the carbon tax is applied in a way that is more appropriate for the NWT context.

Finally, the GNWT approach is expected to provide $8 million annually when fully implemented that the GNWT will be able to use to invest in energy initiatives.

I am not saying that we will be able to mitigate all impacts of carbon pricing. It is a tax and no one likes a new tax. It is clear that the residents and businesses will be better off with the GNWT approach than simply allowing the federal government to impose their approach to a carbon tax and spend the revenues as they see fit.

This concludes my opening remarks, Mr. Chair. Thank you.

Thank you. I will turn to the chair of the standing committee that reviewed the bill for any opening comments. There are no opening comments I see from Mr. Testart, so I can open the floor to general comments on Bill 42: An Act to Amend the Petroleum Products Tax Act. First, we have Mr. Vanthuyne.

Thank you, Mr. Vanthuyne. Next, we have Mr. Testart.

Thank you, Mr. Chair. When I spoke previously, it was as the chair of the Standing Committee on Government Operations, and now I speak as the Member for Kam Lake. I have spoken with Kam Lakers about this very issue, and many of them are torn because they do care about the environment, they care about climate change, and they want options, but they are also faced with the reality that the North is already a very expensive place to live and work.

I have heard from businesses, as well, who say they cannot afford another cost and encouraged me to work to improve whatever this bill would ultimately result in, to give them some relief on that front. Unfortunately, that is not there. As my honourable friend from Yellowknife North put out, there are no measures for small businesses, and this despite the urging of the standing committee. There are no measures for municipalities, as well, which is another feature of the federal backstop. These are features that are not in our plan, that are in another plan, but does that make the federal plan better? Well, no, we do not know that. Taking the Minister's comments earlier, "It's clear that the residents and businesses will be better off with the GNWT approach." Unfortunately, Mr. Chair, it's not clear because the exact details of the federal backstop don't exist because those backstops that we have seen are in jurisdictions that have accepted the backstop and worked with Ottawa to develop it within their jurisdictions.

I think it has become clear to me at this point that the reason we cannot get anything out of either this government or the federal government is because nothing is really there apart from targets, metrics, and other useful data that is used to build whatever the backstop ultimately looks like, barring the industrial emission standards, which we have already reviewed in our report, in the committee's report, and discussed. So the real question here is: why was this so difficult to get the information? I wanted nothing more than to see that committee report come out and fully endorse the GNWT's plan and say it's head over heels, a hundred percent better than what the federal government is going to impose on us if we don't take it," but we cannot provide that kind of comfort. What we are left with is a carbon pricing plan that is being imposed by this government, not by Ottawa. The Premier unilaterally signed on the pan-Canadian framework for clean growth and climate change and committed to this tax without seeking input from all Members of this House, and without properly engaging the Members of this House on how that tax would work and what kind of features were needed to make it work for the North.

Large emitters are responsible for more than 70 percent of the NWT's total emissions, and yet individual Northerners are given nearly the same tax to pay on things that are not automatically rebated. Individualized trust for these emitters instead of a competitive fund for clean energy investment leaves our clean energy investment of our large emitters in roughly the same shape as they were before. These are holding places for the rebates that would otherwise receive.

There was no consideration of alternative approaches to carbon pricing, including cap and trade through establishing a northern carbon market. At the time that the pan-Canadian framework was signed, Ontario and Quebec had a shared carbon market with California and the United States. This is a discussion that could have been had with those provincial governments, and certainly with our northern premiers to create a carbon market that could have dealt with the industrial emissions and left individual Northerners not paying a tax out of their own pockets for, again, a problem where 75 percent is produced by those emitters.

There is a lack of a formal tax plan in these bills that needs to be approved by the Assembly, which leaves the rebates and actual rates of tax determined by regulation; which is another way of saying by unelected bureaucrats. We have a very capable public service, but taxation, above all other things, should be determined by the Legislature. That is what we are here to do, and that is what should be coming forward with a formal tax plan, and that is not a feature of this bill.

There is a fundamental lack of accountability in reporting the revenues and operations of the carbon pricing scheme that will make it all but impossible for public and independent assessment of a revenue-neutral tax, which is another commitment that the government has made. There are no rebates, as I have said before, for small businesses and municipalities, who have no choice but to pass increased costs on to residents. This is significant because, if carbon pricing is meant to change behaviour, then there need to be options for change. Nahanni Butte is not Vancouver. Gameti is not Toronto, and even Yellowknife is not like any other major city in Canada, where residents can switch to low-carbon alternatives such as subways, LRT, buses, et cetera. I find it hard to believe we can build the infrastructure for electric cars, and the money that is actually going to be invested in clean energy is already going to GNWT-owned and operated infrastructure and their energy strategy.

Furthermore, the final point I will make is the government has waited until the bitter end to roll out these bills, and now we are confronted with the reality that we are going into not one but two elections, one territorial and one federal, that could undo this entire carbon pricing plan and render it unnecessary. If the 19^th Assembly decides that this is not the way they wish to go, they can undo it. If there is a different government elected in Ottawa, they can decide this is not the way to go. Members of this House urged the government to bring forward a carbon pricing plan early in the life of the Assembly so it could be properly considered, vetted, and consulted with the public, and that did not happen until the very end, until the dying days of this Assembly. Again, now we are in a position where these bills with a carbon tax will be implemented during an election, during two elections really, and the outcome is not so certain. This is not the way to roll out sound public policy that is going to achieve its clearly stated goals of reducing emissions and ensuring that it is revenue neutral and invested in the right ways. Even the rebates for individuals are not income tested, so everyone gets the same rebate. Whether you make $200,000 a year in the Northwest Territories or are on income support, you are still getting the same amount of rebate back, and that doesn't speak to fairness of costs.

This plan is not something I can currently support. I have learned a lot over my term, and when I started, I certainly had high-minded and lofty public policy goals. Once you begin working in this role and hearing the concerns of your constituents, it is very clear that the cost of living is always going to prioritize everything else.

This government has done very little to convince me that their plan is superior, and as a result, I cannot support it. Thank you.

Thank you, Mr. Testart. Next, we have Mr. Thompson.

Thank you, Mr. Chair. This is a very interesting and challenging aspect as we are moving forward. I have heard a number of people talk about carbon tax, climate change, what are we doing to fix the climate change, and that's the issue. When I have listened to the argument on both sides, it puts you in the spot, but at the end of the day, we have to make a decision for Northerners. Not somebody from Ottawa, but somebody here. Is it the best solution? No, but you know what, the solution the federal government is offering isn't the best solution, either.

My concern is that, in my riding, there are opportunities for what we call cleaner energy, like geothermal. We are going to spend a lot of money on the project, the Taltson dam. Well, we could do a geothermal project in Fort Liard, which would also cut the cost of our green gas, but also put people to work.

The other thing is that my concern is about the cap that we put with the Power Corporation at 20 percent. The community in Jean Marie River put up a number of solar panels and they were able to help reduce the cost to their power plant. It's great, but it's only able at 20 percent. Those are some of the things that we need to look at. We need to look at how we can use renewable energy that we have up north to help us reduce the greenhouse gas effect on our residents.

Cost of living is very difficult in my riding. When we say 35 percent of unemployment in some of the smaller communities, I'm having communities that have 10, 15 percent of employment. That means 85 is out there. They are going to be hit hard for this. Unfortunately, at the end of the day, I have to make a decision on what the Government of the Northwest Territories is offering versus what the Government of Canada is doing. I'd rather stand up and go to the doors and say, look, maybe it's not the best solution; however, I'd rather say, we did this. I will take ownership of "we." At the end of the day, that's what counts. I cannot say, well, something from Ottawa, and this is good. I can't honestly say that. I have made a commitment to the Minister, and I have made a commitment to people who have talked to me about climate change and say, what are we doing? I've made this commitment. It is not the best. I really would like to see some pilot projects in the riding that I represent, but that is some work that needs to be done next term. We talk about "what if." I don't know what's going to happen tomorrow. I don't know if I am going to be here after the next election. I've got to make a decision right now.

Again, as I have made a commitment to the Minister of Finance, I will be supporting this bill. Thank you, Mr. Chair.

Thank you. I have no one further on my list for general comments to the bill. Mr. O'Reilly.

Thanks, Mr. Chair. I am thinking about what I want to get on the record because I expect that there are a lot of residents out there listening and will watch what we have done and said here on this debate.

I reviewed what the Minister said in his opening remarks. We've got two pages here of what is an interesting defence of Cabinet's plan about how to make sure that this doesn't impact the cost of living. That's not what a carbon tax is actually supposed to be all about. The words "climate change" are found once in here with regard to the pan-
Canadian framework. Climate crisis is not in the Minister's opening remarks.

The purpose of a carbon tax is to encourage fuel switching, reduction of greenhouse gas emissions, and change our behaviour so that we can build a new economy that is not reliant on fossil fuels. That is not what this bill is about. That's not the approach of this government. That's not what the approach of this Minister has been since day one.

We have an opportunity to start to build energy self-sufficiency as part of a real plan on the climate crisis. That is not what this bill does, and I am sad to say that we have an opportunity, and it has been squandered.

I do support the committee's report. It highlights numerous instances where the committee tried to work with the department, the Minister, Cabinet colleagues, on developing a collaborative approach to designing a carbon pricing system for our residents. There were lots of requests for information back and forth, but nothing was really ever delivered. In fact, what we have is a bill that is set out in a way that it actually precludes committee and Regular MLAs from making any kind of meaningful amendments to it, which is very disappointing. This was not developed in any kind of a collaborative way. It really precludes us from having any meaningful input into it. That is not how consensus government is supposed to work.

The committee tried to work with the Minister and get more information and tried to work with the federal government. It was very frustrating in terms of getting more information about the federal backstop. The kind of information that is being put out by our government, by Cabinet, by the Minister, if you look, the description of the federal backstop is set out in the plain language summary, and there is similar information on the Department of Finance website. The stuff about the federal backstop, if you look, in very small letters here, it says that the information presented here is based on the federal approach for rural communities in New Brunswick, which is one of the problems with where the federal backstop is being implemented. All of these predictions about the federal backstop put together by our government are based on what is going on in New Brunswick. What does that have to do with us? We had an opportunity, as my colleague from Kam Lake said, to actually work with the federal government to develop a federal backstop that would work for us, and unfortunately, that opportunity was squandered.

To be clear, I support carbon pricing, but this is not the plan that is going to help us deal with the climate change crisis that's on it. The only firm thing in this bill is the carbon tax itself. Everything else is discretionary; rebates, grants, how the money is used. Everybody else is totally at the discretion of Cabinet moving forward. It's a made-by-Cabinet approach; it's not made-in-the-North approach. The only thing that this bill does is set out what the carbon tax is going to be, and that is what the federal government has already told us. Everything else is at the discretion of Cabinet.

That could change with a different Minister next time. The rebates, the grants, it is all going to be set out in regulation that nobody is going to have any input into necessarily. The only thing that this bill does is set what the carbon tax is going to be, and that is what the federal government has told us. The use of that money, and so on, is all at Cabinet's discretion, with no accountability, no requirements for reporting, no requirement to work with the public or Regular MLAs moving forward.

For those sort of reasons, that is why I cannot support the bill, because this is a made-by-Cabinet approach. I think that what we need to do is to send this back and let the 19^th Assembly develop a real plan for the climate crisis that is on us. This is not going to help us get there. Thank you, Mr. Chair.

Thank you, Mr. O'Reilly. I am going to call a brief recess.

---SHORT RECESS

Committee, I apologize for ringing the bells. I am going to have to call another recess. We are back in recess.

---SHORT RECESS.

All right, committee. We are back at it. I understand there are some witnesses that the Minister would like to bring in, so, Sergeant-at-Arms, please escort the witnesses to the table. Minister, please take your seat at the witness table. Minister, please introduce your witnesses for the record.

Thank you, Mr. Chair. To my right, I have Mr. David Stewart, the deputy minister of Finance. To my left, I have Ms. Cherie Jarock, who is legislative counsel. Thank you, Mr. Chair.

Thank you. Welcome back to the witnesses. Committee, in case anyone forgot, we are considering Bill 42, An Act to Amend the Petroleum Products Tax Act. Does committee agree that we move on to consideration of the clauses?

Are there further general comments? Ms. Green.

Is it possible for us to ask the Minister general questions about the bill, or is it only in the context of the clause-by-clause?

I will allow general questions, Ms. Green. I don't believe that you have spoken. Ms. Green, go ahead.

Thank you, Mr. Chair. I feel like I am playing some catch-up with this, as I am not part of the committee that looked at it. I heard the Minister's opening remarks and his assertion that the program that he is offering is better than the one that would be offered by the backstop, but when I did a simple Google search of how the Yukon was approaching the carbon tax, I noticed that there were some distinct advantages to their approach. I guess my first question would be whether the Minister considered making the rebate on a sliding scale geographically, so that people who live in smaller and remote communities would be eligible for a larger rebate than those who live in Yellowknife, for example? Thank you.

Thank you, Ms. Green. One second. Thank you. To clarify, Ms. Green, in this bill, there are rebates for heating fuel and aviation fuel, and then there is a Cost Of Living Offset that is in the next bill. Are you referring to the heating fuel and the fuel rebates or the Cost Of Living Offset, just for clarification?

Thank you, Mr. Chair. The question that I asked was about the rebates. I understand that that is in the next bill; the questions that I need to ask are in this bill.

Let me try this question. One of the things that Yukon is offering is that municipal governments will receive a share of revenues from the tax. Is this something that is in this bill? Yes. Municipal governments will pay the carbon tax, but also receive a share of the revenues. Did the Minister consider making that a provision of this plan? Thank you.

Thank you, Ms. Green. Minister.