Thank you, Madam Chair. Madam Chair, typically -- and I suppose if we're talking process, typically you'll find Members of Cabinet don't always speak to recommendations to reports, and it's not because we're not listening but it's the typical practice that it's a direction to Cabinet to do something which is why we abstain typically on these votes. But this has been a very public process and one that I agree with comments already that putting more information out in this particular instance is really for the overall benefit. So I have had the benefit of sharing some remarks with my colleagues just so that they're -- to that extent hopefully there's no surprises, if not everyone on Cabinet speaks again. That is our usual process and we are able to discuss in advance what one Minister might say such as in an instance like this one.
I understand firstly, and I think it's technically the last recommendation, that there be a response in 120 days. That's fairly standard. Again though, I'm speaking today, again in part, because 120 days is a bit late. April 1st, the federal carbon tax rates increase and any jurisdiction, as you've heard from the Member earlier, that hasn't made a change will have the backstop imposed. So while if committee's recommendations in the report is accepted, we are going to try and have a formal response back as quickly as possible and much sooner than that. I nevertheless want to take this opportunity to speak here.
Firstly, Madam Chair, why did we not want the federal system voluntarily or imposed? In short, really, there was just no sign at any point earlier on or now that we'd be better off as a territory, that our economy would be better off, that residents would be better off under the federal system. I disagree that it's unfair or that there's any lack of open accounting.
Madam Chair, every single dollar that gets spent by the Government of the Northwest Territories is approved by the Legislative Assembly, and every single dollar that is spent is then reviewed by the Auditor General of Canada. So there's ample opportunity to have a lot of control in this House about what is spent and how and then to have that process reviewed through the public accounting process. But, Madam Chair, we do want to ensure when we are having the opportunity to have revenue from income -- or revenue from taxes that we continue to have control and oversight over those revenues and that really is all that's happening in Bill 60. And once you give up that control, if you opt into the federal system or have it imposed, either way, it's irreversible. That federal system is then implemented. It's here in whatever fashion. And the goalposts have already changed. The federal government's changed the goalposts for those who opted in earlier under the previous original system. They've eliminated the heating fuel rebate. They've made other changes, things you can or cannot do with your rebate system, in or out. And if we had opted in or if we opted in now, we'd be under that circumstance going into the future. We don't want to do that. We find one of the big things -- and I know that one that hasn't had as much time is the large emitter system in favour of the federal output-based production system, or OBPS.
There are down sides to OBPS for the Northwest Territories. First, Madam Chair, adopting OBPS would create an inequitable carbon tax burden. Let me explain that.
We've used fuel tax data to show that greenhouse gas emissions are about the same whether you're the three diamond mines or all other fuel consumers. So if you have the OBPS system where we'd be getting less tax revenue, basically it means that even though 50 percent of fuel usage is coming from the diamond mines, they would not be paying 50 percent of the carbon tax burden. We would not be receiving that enhanced revenue from them. OBPS would have them actually right now today paying less tax. So it seemed, frankly, rather obvious that we want to keep that system. But I acknowledge that perhaps it's been poorly understood. And as I said, it's less government revenue overall. That means less revenue for everything that we want to do here in this Assembly. But also importantly, besides being a hit to ourselves in terms of what we can do with our resources and revenues, the OBPS approach also isn't very responsive to the nature of the mineral resource industry in the North. And while they might pay a little bit less right now, that benefit would disappear as a large mine starts to, or may have to, reduce production if they move to or when they move towards closure and reclamation. There's also no offset system or process if a mine is coming in and being constructed and built.
So it's talked about in this House all the time, the high costs of doing business, the high costs of development, the lack of infrastructure. And here we have a made-in-the North system that provides a different way for large industry to invest, to build, and to exist, rather than the federal style system which uses an industry standard and a standard that may well be relying on a standard developed using lower cost jurisdictions. That has no benefit to our industry here in the North.
Madam Chair, I'll speak now just briefly to the recommendations, which really weren't focused on that large emitter system. But the large emitter program, really again, is a big part of why it seemed, quite frankly, quite obvious that we wanted to stay out of the federal system. But the recommendations in the report, I do -- I'm hearing people. I'm hearing my colleagues. And if I sound frustrated, it's not at them; it's frustrated that I share the frustration and it seems like we're all actually saying the same thing and yet continue to disagree, which is frustrating.
The recommendations, from what I've read and from what I've heard, are largely a dissatisfaction with the federal carbon pricing benchmark. It increases the carbon tax rates and puts a tax on heating fuel and that's what brings us largely here. So of course, there's a public engagement process. That is conducted by standing committee in the usual course after first reading of a bill. That public briefing was back in November. And in response to that briefing, in response to the concerns raised particularly from high cost zones, is exactly why we went back and created the zoned system for the cost of living offset. It was precisely to benefit residents in the highest cost zones, in particular Nunakput, and to ensure that those residents would get a higher amount to reflect the higher costs.
So in February, we thought it would be clause by clause and that turned into another public hearing. But in the course of that, we received more feedback.
The first formal feedback was this report that we have now. But nevertheless, even before receiving this report, Madam Chair, we were able to go back and realize that we could, indeed, find a way to do a revenue sharing agreement with -- or revenue sharing approach with the communities. We've done that. We've proposed to put in 5 percent for communities. Well, Madam Chair, I have to knowledge again, that's clearly been unsatisfactory, and we're proposing to, frankly, to double that, to bring that up to 10 percent revenue sharing.
The idea -- some of the other recommendations, Madam Chair, we'll go through. As I said, we'll try to have a formal response because they are speaking to concerns with the carbon tax system and the imposition thereof and not necessarily to Bill C-60, which is really just trying to find -- really just imposes the carbon tax rates. That is all it does.
Now as for whether or not we would relinquish the -- or yes, relinquish control and power, Madam Chair, respectfully, it's not about that. It's about maintaining flexibility. So in terms of ensuring that we as a government have flexibility to determine, you know, today, where do we want to see the revenues go, how do we want to recycle revenues, the idea of doing the graded system based on averages to best serve the residents in the small communities who have the highest costs, maybe we do have to make some changes to those zones. Is 10 percent enough? It's more than what we've calculated based, again, on our fuel tax use rates; it's more than what we have calculated to be required but maybe that needs to be adjusted. Madam Chair, it seems that we would indeed want to keep those things in regulations so that they can be changed more easily. That is the way of things here.
I know I'm running short on time, Madam Chair, and so I think I'll probably wind up putting a lot more of what I wanted to say in a formal response. But the other thing I feel compelled to speak to is the idea that we haven't gone to the federal government about this. Madam Chair, this doesn't appear anywhere in committee's report. Madam Chair, I've shared my correspondence, multiple letters with committee. They weren't present at various in-person opportunities but I've had in-person opportunities too. And even though there's a multitude of issues that we want to raise with the federal government, I raised this one. And I raised this one in some of the strongest terms available to me. I have had no positive response. I have had no indication of change. It gives me no confidence that putting control over the carbon tax in the hands of the federal government would put the residents of the Northwest Territories better off. It is the opposite. We relinquish the control and we put ourselves under the federal government system. From based on the kind of response I've had, which is none, we would not be better off; we'd have no control of our revenues and residents wouldn't see anything better coming to them. Thank you, Madam Chair.