Participants Had Serious Concerns About Carbon Tax Approach

Committee sought public feedback on Bill 60 with a public notice and targeted engagement letters to those who may have had an interest in the bill. Committee received written submissions from:

• The Northwest Territory Metis Nation;
• The NWT Association of Communities;
• The NWT Chamber of Commerce;
• The NWT Senior's Society and Yellowknife Seniors' Society;
• Pivot Strategic; and
• One member of the public.

All written submissions are included in an appendix to this report.

Committee also held a public hearing on Bill 60 on January 16, 2023. At that meeting, committee received oral comments from the NWT Association of Communities, Pivot Strategic, the Yellowknife Seniors' Society, and a member of the public. Committee appreciates everyone who participated in the review of Bill 60.

Some participants were surprised and disappointed that the government is proposing a significant tax change with minimal consultation and public information. Indeed, the
Minister of Finance indicated that public consultations only focused on the large
emitters. Yet many other groups, like businesses and seniors, are significantly impacted by the changes.

Committee finds the government's approach problematic. It stands in stark contrast to
the Yukon's approach to carbon tax consultation, which featured a public survey, public information sessions, and targeted information sessions with local governments and First Nations.

Many participants expressed concern that the government's carbon tax approach is not
suitable for the NWT. These concerns can be summarized in three broad categories:

1. Lack of alternatives makes carbon tax ineffective

A carbon tax makes carbon-intensive fuels more expensive. This nudges users towards cleaner energy consumption. Carbon taxes can be an effective policy to reduce emissions.

However, the North has few alternatives to fossil fuels. Many communities rely on diesel
generators for electricity because there is no grid connection. The Northwest Territories Power Corporation (NTPC) only allows for 2.6 megawatts of intermittent renewable energy capacity out of an average load of 13.2 megawatts across 25 communities - essentially capping these clean sources at 20 percent of the electricity mix. For heating, most
Northerners depend on wood, heating oil, natural gas, or propane. They cannot easily or cheaply switch to another fuel. And the territory has little infrastructure in place to support zero-emission vehicles.

Without alternatives, Northerners have no choice but to pay more for the fossil fuels
they rely on. As a result, the tax has a minimal effect towards reducing emissions.

2. Northerners can't afford higher costs

Northerners face some of the highest costs in Canada. Our vast geography, sparse population, remote communities, and harsh climate create high costs for goods and services.

Members heard clearly and strongly that households, businesses, local and Indigenous
governments, and NGOs cannot afford to pay even more. Some residents already pay over $2,000 per month to heat their homes, and the higher carbon tax comes at an especially bad time: in the last year, average prices have gone up 6.3 percent, more than the Canadian average. Because things cost more in the North, the carbon tax will be more
expensive here than in other parts of Canada. Northerners will also pay more for the
goods and service tax, which is charged on top of the carbon tax. The carbon tax also makes it harder to reach their other economic goals like recovering from the pandemic, kick-starting the population growth, attracting investment, and diversifying the economy. Committee is worried that with a higher carbon tax, more people will move away from the North and businesses won't be able to stay here.

Any federal requirements around carbon tax plans should recognize the unique circumstances of the Northwest Territories. The Standing Committee on Government Operations therefore recommends:

Recommendation 1

That this Assembly call on the federal government to better recognize the specific needs and circumstances of the Northwest Territories in its climate change approach.

These specific needs include significantly more funding to make renewable energy options accessible and affordable for all Northerners.

Further, committee recommends that the Premier of the Northwest Territories convey this motion without delay to the Prime Minister of Canada with a letter requesting a reply.

Recommendation 2

That the Northwest Territories Power Corporation (NTPC) increase the cap on intermittent renewable energy generation that residents and communities can install to offset their power use, and develop a plan to support projects above the current cap.

Committee further recommends that NTPC and the Department of Infrastructure provide their response to the May 2021 Net Metering and Community Self-Generation Policy Review. For each recommendation, NTPC and the department should indicate whether they agree, its work plan for implementation, and its progress towards implementation.

I'd like to request, Mr. Speaker, to turn it over to the MLA for Kam Lake. Thank you.