Thank you, Minister. Final supplementary. Member for Monfwi.

I just wanted to ask the Minister, has the route been selected for the transmission line? Thank you.

Thank you, Minister. Colleagues, our time for oral questions has expired. And I must say you did a lot better today than yesterday, but we still have to tighten it up a bit to have everybody an opportunity to ask questions. So keep that in mind next time, keep the preamble shorter, and you'll have time for more questions is what I'm saying. Okay, moving on.

Written questions. Returns to written questions. Replies to the Commissioner's address. Petitions. Reports of committees on the review of bills. Member for Yellowknife North.

Thank you, Mr. Speaker. Your committee would like to report consideration of Bill 83, Liquor Act.

Bill 83 received second reading in the Legislative Assembly on March 20th, 2023, and was referred to the Standing Committee on Government Operations for review. Committee held a public hearing with the Minister of Finance on May 29th, 2023. Committee held three public meetings in Inuvik, Norman Wells, and Yellowknife. Committee also received one written submission. On July 28th, 2023, the committee held a clause-by-clause review at which time the two department-driven motions were moved and approved.

Mr. Speaker, the committee reports that Bill 83, Liquor Act, is ready for consideration in Committee of the Whole as amended and reprinted. Thank you, Mr. Speaker.

Thank you, Member for Yellowknife North. The bill is referred to Committee of the Whole. Reports of committees on the review of bills. Member for Yellowknife North.

Thank you, Mr. Speaker. Your committee would like to report on its consideration of Bill 92, An Act to Amend the Petroleum Products and Carbon Tax Act, No. 3.

Bill 92 received second reading in the Legislative Assembly on June 1st, 2023, and was referred to the Standing Committee on Government Operations for review. The committee held a public hearing with the Minister of Finance on June 27th, 2023. On July 28th, 2023, committee held a clause-by-clause review.

Mr. Speaker, the committee reports that Bill 92, An Act to Amend the Petroleum Products and Carbon Tax Act, No. 3, is ready for consideration in Committee of the Whole as amended and reprinted. Thank you, Mr. Speaker.

Thank you, Member for Yellowknife North. The bill is referred to Committee of the Whole. Reports of committees on the review of bills. Reports of standing and special committees. Member for Yellowknife North.

Thank you, Mr. Speaker. I have nine reports of standing committees which I will read in their entirety.

---laughter

Mr. Speaker, no, I will be seeking that all of these are deemed read but there's 18 total motions. So it may take some time.

Mr. Speaker, your Standing Committee on government operations is pleased to provide its report on the review of Bill 83, Liquor Act.

Mr. Speaker, I move, seconded by the Member for Thebacha, that Committee Report 65-19(2), Standing Committee on Government Operations Report on the Review of Bill 83: Liquor Act, be deemed read and printed in Hansard in its entirety. Thank you, Mr. Speaker.

Thank you, Member for Yellowknife North. The motion is in order. To the motion.

Question has been called. All those in favour? All those opposed? Any abstentions? The motion is carried. The committee report is deemed read.

---Carried

Introduction

Bill 83: Liquor Act (Bill 83) received second reading on March 30, 2023, and was referred to the Standing Committee on Government Operations (Committee) for review.

Bill 83 repeals and replaces the existing Liquor Act (Act). The Bill follows a two-year Liquor Legislation Review that considered how to modernize and streamline liquor laws in the Northwest Territories. The Review results were released in fall 2022 and made 66 recommendations to improve legislation, regulations, and operating policies and procedures.3 Bill 83 aims to implement the recommendations that were legislative in nature, including changes to:

- Streamline how the liquor industry is regulated;

- Ensure safe public access to liquor;

- Increase community control over liquor; and

- Modernize liquor enforcement.

This report outlines Committee's engagement with the public and the government on Bill 83. The government provided substantial background information in support of Committee's review, which is included in the appendices to this report. This report also explains a pair of department-driven motions to amend Bill 83 that were adopted at the clause-by-clause review.

Public Engagement

Committee Heard Range of Views in Three Communities

Committee hosted three public meetings on Bill 83 in Inuvik, Norman Wells - Tlegohi, and Yellowknife - Somba Ke. Thirteen residents participated in these meetings. Several common themes of interest emerged, including:

- Alcohol addictions. Many participants expressed dismay at the personal and societal harms of alcohol addictions and maintained the need for more local treatment and wellness supports, especially for youth.

- Bootlegging. Committee heard strong agreement to tackle bootlegging with specific liquor retail sales controls and enforcement actions. Multiple participants suggested requiring liquor retailers to keep data on the volume of sales to each purchaser and be allowed to share that data to law enforcement. They also suggested prohibiting retailers from selling liquor to likely bootleggers.

- Streamlining regulations. Committee heard strong agreement on streamlining how the industry is regulated. Participants wanted to see less onerous application requirements and lower fees for special occasion permits and licensing more generally. One specific suggestion was to waive the fee on special occasion permits for a Class D license - event organizers are often not-for-profit, and after paying for liability insurance and other costs, their liquor event may not break even.

- Sales model. Committee heard some agreement on allowing more different types of liquor retail stores, including private liquor sales and off-sales. - Registrar. Committee heard cautious support for moving licensing and penalties functions from the Liquor Licensing Board to a new “Registrar” position. Some participants were concerned that the “wrong person” in the position could impose unreasonable and onerous requirements on license-holders and applicants. Committee heard support for proper oversight of the new Registrar.

- Local decision-making body. Committee heard mixed views on the proposed change on which body makes decisions about community control of liquor. Some participants supported the proposal to leave decisions with a single “local authority”. Others were concerned this approach left out important voices and preferred a committee system approach including leaders from the local public government and local Indigenous Governments.

- Public places. Committee heard mixed views on continuing to prohibit liquor consumption in public. Those against the prohibition suggested maintaining the prohibition in certain areas, like schools.

- Server training. Committee heard mixed views on making server training mandatory. Some participants felt this requirement was excessive, especially for one-time events under a special occasion permit. Others shared examples of disorder when servers did not have adequate training and supported mandatory training.

Committee thanks all residents who participated in the review. Committee recognizes the difficult balance between those who want more access to liquor and those who want less.

Committee Received Limited Written Feedback

Committee also sought written submissions on Bill 83. We sent close to 300 targeted engagement letters to:

- Indigenous Governments and Organizations;

- Municipal and community governments;

- Public agencies;

- Liquor retailers, manufacturers, and licensees; and

- Advocacy organizations;

Committee only received one written submission in response, from Big River Service Centre. Big River's written submission primarily addressed a private licensing issue, rather than Bill 83. Committee forwarded the letter to the appropriate departmental officials.

Departmental Input

The Department Shared New Information To Support Committee's Review

On May 29, 2023, the Minister of Finance and departmental officials provided a public briefing on Bill 83. The department's presentation is included in Appendix A. The department also provided an extended summary of the Bill, included in Appendix B. At the public briefing, the Minister responded to Committee's questions and concerns. Some key pieces of information include:

Hay River Jobs Impact

Bill 83 transforms the Hay River-based Liquor Licensing Board into an appeals board and shifts its licensing and penalty functions to a new Registrar position. Committee was concerned the changes could result in job losses in Hay River. The Minister reported that she is not anticipating any significant human resources changes, and no changes to the number or location of positions. Committee is pleased the new Registrar position and the new appeals board will be in Hay River.

Interaction with the Alcohol Strategy

In March 2023, the Department of Health and Social Services released An Alcohol Strategy for the Northwest Territories. The Alcohol Strategy aims to reduce alcohol-related harm. Committee asked whether the Alcohol Strategy informed Bill 83. The Minister confirmed that policymakers working on the two projects were talking to each other. She also said the Alcohol Strategy informed several proposals in Bill 83, including minimum prices for standard drinks, lower prices for lower-alcohol content, and increasing community control.

Defining And Publicly Identifying The ‘Local Authority'

Bill 83 requires community decisions about liquor control to be made by one body called the local authority. This authority for each community will be designated by the Minister. Committee was concerned that Bill 83 does not require the department to be transparent about which government or council the Minister designates as the local authority. The Minister said she had no problem making public the designated local authority. Committee expects the department to make this information public. Any decisions to change the local authority should also be communicated to the public.

Streamlining Special Occasion Permits

Committee asked whether plans to streamline the special occasion permitting (SOP) process would involve the Office of the Fire Marshall (OFM). The OFM currently reviews occupancy load applications for each special occasion permit and may also require a site inspection.11 The Minister committed to discussing this issue with the OFM. Committee encourages the department and the OFM to collaborate on streamlining special occasion permitting as much as possible.

More Changes In 2024 With New Liquor Regulations

At the public briefing, Members asked how Bill 83 fits within the broader work to implement the recommendations from the Liquor Legislation Review. The Minister explained that of the 66 recommendations, 20 percent related directly to the Liquor Act and were being addressed in Bill 83. The remaining 80 percent affected the Liquor Regulations and would be dealt with after Bill 83 receives assent.

Committee requested additional detail on this matter. In response, the department provided a high-level overview indicating where each recommendation would be addressed: in Bill 83; in the Liquor Regulations; or in separate operating procedures. This overview is included in Appendix C.

The Minister also provided a timeline for updating the Regulations. Once Bill 83 receives assent, drafting work will start. The drafting is expected to be completed by fall 2024. The new Regulations are expected to be finalized before the end of the 2024 calendar year.

Some of the changes coming forward include:

- Streamlining licensing requirements if an applicant or a premises is already licensed, allowing for bundling of applications, and putting permitting applications online;

- Removing sales restrictions related to Sundays, Christmas Day, Good Friday, and election days.

- Creating new licences for local liquor delivery and ferment-on-premises; - Creating a vendor designation for licensed manufacturers in the Northwest Territories; and given that the public was already consulted during the Liquor Legislation Review. In this case, Committee encourages the department to be transparent about its progress updating the Liquor Regulations.

- Making server training mandatory.

The Minister indicated that the department would not do additional public consultation, given that the public was already consulted during the Liquor Legislation Review. In this case, Committee encourages the department to be transparent about its progress updating the Liquor Regulations.

Amendments

Committee approved two department-driven amendments The department requested two motions to amend Bill 83. The first motion fixed a typo. The second motion made consequential amendments so that five other laws would be consistent with the new Liquor Act. The motions are included in Appendix D and Appendix E, respectively. Committee was satisfied with these amendments and approved them at the clause-by-clause review, held on July 28, 2023. Committee then passed a motion to report Bill 83, as amended, to the Legislative Assembly as ready for consideration in Committee of the Whole.

Conclusion

This concludes the Standing Committee on Government Operations' review of Bill 83.

Member for Yellowknife North.

Mr. Speaker, I move, seconded by the Member for Thebacha, that the Committee Report 65-19(2), Standing Committee on Government Operations Report on the Review of Bill 83: Liquor Act, be received and adopted by the Assembly. Thank you, Mr. Speaker.

Thank you, Member for Yellowknife North. The motion is in order. To the motion.

Question has been called. All those in favour? All those opposed? Any abstentions? The motion is carried. Committee report has been received and adopted by the Assembly.

---Carried

Reports of standing and special committees. Member for Yellowknife North.

Mr. Speaker, your Standing Committee on Government Operations is pleased to provide its report on the review of Bill 92: An Act to Amend the petroleum Products and Carbon Tax Act, No. 3.

Mr. Speaker, I move, seconded by the Member for Thebacha, that the Committee Report 66-19(2): Standing Committee on Government Operations Report on the Review of Bill 92: An Act to Amend the Petroleum Products and Carbon Tax Act, No. 3, be deemed read and printed in Hansard in its entirety. Thank you, Mr. Speaker.

Thank you, Member for Yellowknife North. The motion is in order. To the motion.

Question has been called. All those in favour? All those opposed? Any abstentions? The motion is carried. The report is deemed read.

---Carried

MR. JOHNSON:

INTRODUCTION AND SUMMARY

Bill 92: An Act to Amend the Petroleum Products and Carbon Tax Act, No. 3 (Bill 92)1 received second reading on June 1, 2023, and was referred to the Standing Committee on Government Operations (Committee) for review.

On June 27, 2023, the Minister of Finance and departmental officials provided a public briefing on the Bill. Bill 92 requires the government to set up an unconditional carbon tax revenue sharing grant with community governments. Bill 92 also requires the government to prepare and release an annual report on the carbon tax. Bill 92 ultimately fulfills commitments from the Minister of Finance to improve the government's carbon tax approach, in response to Members' concerns during the third reading of Bill 60: An Act to Amend the Petroleum Products and Carbon Tax Act (Bill 60).

This report summarizes Committee's review of Bill 92, focusing on our amendments to improve the Bill. As originally drafted, Bill 92 fell short of the improvements many Regular Members wanted to see to the government's carbon tax approach - so much so that the Member for Frame Lake introduced a parallel private member's bill. Committee worked with departmental officials and the Member for Frame Lake to develop amendments to strengthen Bill 92 that everyone could support.

Ultimately, Committee put forward four amendments, which are included in Appendix B of this report. The Minister concurred with all four amendments, which were then adopted at the clause-by-clause review on July 28, 2023. Committee is satisfied that the changes to Bill 92 represent a reasonable compromise between the views of the Government of the Northwest Territories (GNWT) and of Regular Members.

AMENDMENTS

Motions #1 and #2: Legislative housekeeping

The Legislation Division initiated two minor changes to re-arrange the definitions in the Bill and make several resulting grammatical changes. These changes were minor and non-substantive. Committee agreed to both changes.

Motion #3: Discretion for a higher community grant amount

Bill 92 sets the amount of the community revenue sharing grant at 10 percent of net carbon tax revenues. While this amount is consistent with the Minister's commitment in the House, Committee was concerned that this may not be consistent with Committee's vision for the grant's purpose - to compensate community governments for the fiscal impacts of the carbon tax.

Using data from the Department of Finance, Committee projected communities' grant revenues with their tax burden. The projections included two scenarios: one in which communities' fuel use stays the same from 2021 through 2030, and another in which fuel use in 2030 is 15 percent lower than 2021 levels. A 15 percent reduction is consistent with a target in the 2030 Energy Strategy. Committee found that, in both scenarios, communities' total tax burden overtakes the total grant amount in 2025. The gap widens to between $1 million and $2 million after 2028.

When the Minister committed to the 10 percent grant amount, Regular Members assumed that meant the carbon tax would be revenue-neutral for community governments. Our analysis suggested that would not be the case.

Committee sought to confirm whether the government also projects that the carbon tax would not be revenue-neutral for community governments. The government did not confirm or deny this point and emphasized that the community grants were not intended to reduce communities' carbon tax burden to zero. The department characterized the 10 percent as a “minimum” revenue sharing rate.

However, as Bill 92 was originally drafted, the revenue sharing grants had to be “equal to” 10 percent of net carbon tax revenues. With this wording, the 10 percent was not really a minimum revenue sharing rate, but rather an exact revenue sharing rate.

Committee wanted to ensure that a future Minister would have legislative discretion to provide a bigger grant, above 10 percent of net carbon tax revenues. We would have preferred that the legislation require the carbon tax to be revenue-neutral for community governments, but this proposal was unlikely to receive support from the department. Instead, Committee developed a motion to tweak the wording for the revenue sharing rate from “equal to 10 percent” to “at least 10 percent.” The government accepted this compromise.

Committee therefore recommends:

Recommendation 1: That the Department of Finance ensure that the carbon tax is revenue-neutral for community governments. Total carbon tax revenue sharing grants should equal or exceed community governments' total carbon tax burden each year.

Motion #4: More prescriptive requirements for the annual report

Bill 92 requires the government to prepare and release an annual report on the carbon tax. Although the Department of Finance already does this work, reporting on the administration of the carbon tax was not previously required in legislation. Committee has sought legislative requirements for carbon tax reporting since the 18th Assembly, and more recently during our review of Bill 60. While Bill 92, as originally drafted, required an annual report, it did not specify a deadline for completing the report or what types of information must be disclosed.

The Member for Frame Lake, in particular, was dissatisfied with these omissions. He advocated unsuccessfully for these requirements to be included in the government's bill before it was tabled in the Assembly. As a result, the Member for Frame Lake introduced a private member's bill - Bill 91: An Act to Amend the Petroleum Products and Carbon Tax Act, No. 2 (Bill 91). Bill 91 provided a list of 17 types of financial and other items to be disclosed in the annual report, and a six-month deadline to prepare and release the annual report. Committee was tasked with reviewing Bill 91 alongside Bill 92. Committee received a public briefing on Bill 91 from the Member for Frame Lake on June 27, 2023.

Committee considered the competing visions for carbon tax annual reporting in Bills 91 and 92 and compared these with the department's current reporting practices. Committee found that Bill 91's reporting requirements surpass the department's current voluntary reporting practices. For example, the current annual report does not disclose information on penalties and fines, refunds, and emissions reductions. Our detailed analysis on this topic is available in Appendix A of this report.

Committee preferred the annual reporting approach in Bill 91, with its more prescriptive requirements, over the approach in Bill 92. Committee believes the detailed reporting requirements in Bill 91 would ensure transparency from future Ministers and promote accountability for the government's work to address the effects of climate change - without imposing an unreasonable burden on the department.

However, advancing the changes in Bill 91 presented a procedural challenge that implicated Bill 92. Bill 91 and Bill 92 both placed measures related to annual reporting in sections numbered '20.2'. The Legislative Assembly could not pass two section '20.2's' with different wording and legal effect.

Committee's preferred approach was to insert the list of required contents in the annual report from Bill 91 into Bill 92. Committee sought the Minister's support for this approach. The government was concerned that certain reporting requirements in Bill 91 would create legal obligations on matters that were impossible to measure. Two subclauses in Bill 91 highlighted this concern:

- Subclause 20.2(2)(k), which requires reporting on the anticipated reduction of emissions in the Northwest Territories thanks to the carbon tax; and

- Subclause 20.2(2)(l), which requires a description of the effectiveness of the carbon tax in reducing emissions. The government department further asserted that subclauses (k) and (l), with their focus on emissions, are outside the purpose of the Petroleum Products and Carbon Tax Act (Act), which focuses on tax rates and collection.

Committee accepted the government's concern with subclause (k), but not with subclause (l). Committee believes subclause (l) provides enough discretion on how to report on the effectiveness of the carbon tax. We also stress that emissions reductions are indeed integral to the purpose of the Act and should not be out of scope for the annual report. The Minister has said that the carbon tax is meant to meet the territory's commitments under the Pan-Canadian Framework on Clean Growth and Climate Change.

Under this federal framework, the government has committed to both a minimum level of carbon taxation and a target for emissions reductions. The 2030 Energy Strategy explicitly links the carbon tax with emissions reductions.

Committee therefore put forward a motion to insert the list of annual reporting requirements from clause 20.2(2) in Bill 91 into Bill 92, save and except for subclause (k). The wording of the motion contained several other minor differences from Bill 91, for clearer and more consistent wording. The Minister concurred with the motion and Committee approved the amendment at the clause-by-clause review.

Impact On Bill 91

Given the Minister's concurrence with motion #4, Committee decided to not proceed with Bill 91. The government's legislation now includes detailed annual reporting requirements that Committee supported. Committee is satisfied with this outcome. We thank the Member for Frame Lake for his tireless advocacy for greater transparency and accountability around the government's work to address climate change.

Conclusion

This concludes the Standing Committee on Government Operations' review of Bill 92. Typically, Committee includes a recommendation in each report requesting a response from government within 120 days. The recommendation is then moved as a motion in the House and Cabinet is required to respond. However, since the 19th Legislative Assembly will dissolve in less than 120 days, Committee has decided to leave out this recommendation and requests that the government provide a public response to this report, even of a preliminary nature, before the beginning of the 20th Assembly.

Reports of standing and special committees. Member for Yellowknife North.