I will now call Committee of the Whole to order. What is the wish of committee? Mr. Beaulieu.
Thank you, Mr. Chairman. Committee wishes to consider Committee Report 26-18(3), Standing Committee on Government Operations Report on the Review of Bill 42, An Act to Amend the Petroleum Products Tax Act, and Bill 43, An Act to Amend the Income Tax Act; Bill 42, An Act to Amend the Petroleum Products Tax Act; and Bill 43, An Act to Amend the Income Tax Act. Thank you, Mr. Chair.
Thank you, Mr. Beaulieu. For clarity, the committee would like to consider the recommendation as a committee report, followed by Bill 42, followed by Bill 43. Is that correct? Mr. Beaulieu.
Thank you, Mr. Chairman. That is correct. Thank you, Mr. Chairman.
Thank you. Does committee agree?
Agreed.
Thank you, committee. We will consider the report and the bills after a brief recess.
---SHORT RECESS
I will now call Committee of the Whole back to order. Welcome back, committee. We have agreed to first consider Committee Report 26-18(3), Standing Committee on Government Operations Report on the Review of the Carbon Tax Bills; Bill 42, An Act to Amend the Petroleum Products Tax Act; and Bill 43, An Act to Amend the Income Tax Act. I will turn to the chair of the Standing Committee on Government Operations for opening remarks. Mr. Testart.
Thank you, Mr. Chair. The Standing Committee on Government Operations concluded its review of Bill 42, An Act to Amend the Petroleum Products Tax Act; and Bill 43, An Act to Amend the Income Tax Act on August 7, 2019 with a public clause-by-clause review held at the Legislative Assembly building.
The committee read their substantive report into the House yesterday. To commence its review of Bill 42 and Bill 43, the Standing Committee on Government Operations sent letters inviting input from an extensive list of stakeholders, including all municipal and Indigenous governments in the Northwest Territories and a number of non-governmental organizations.
The committee held one public meeting in Yellowknife on August 1, 2019. As well, the committee received four written submissions on the bill, from the Arctic Energy Alliance, a joint submission from Ecology North and Alternatives North, Northwest Territories Association of Communities, and the City of Yellowknife. On behalf of the committee, I would like to thank everyone who provided input on Bills 42 and 43.
While I have the floor, Mr. Chair, I will take the opportunity to reiterate the frustrating process committee experienced in its review of these bills. Committee began its engagement with the Minister of Finance as far back as 2017. Despite multiple attempts to provide recommendations to the Minister on the GNWT's planned approach to carbon pricing, each time, committee was rebuffed. Although committee recognizes that the Minister was very forthcoming with information and updates with respect to the negotiations of carbon pricing with the federal government, committee was denied any meaningful opportunity to shape the GNWT's carbon pricing plan, an approach that did not meet committee's expectations to be involved in such a crucial decision for the Northwest Territories.
This situation was further exacerbated during the committee's clause-by-clause review of the legislation, the two bills, by a lack of information available to support committee in its public consultations. I should note that the federal government bears a great deal of this responsibility, as well. Correspondence written to the federal Minister of Environment and Climate Change was returned without answering committee's questions or providing additional information that could have helped the committee compare the merits of the GNWT's plan with the merits of the federal backstop. Ultimately, committee was unable to render a decision on which approach to carbon pricing would be of greatest benefit to the Northwest Territories and did not seek amendments as a result. Again, this was a very frustrating process as committee had higher expectations to be more involved in a collaborative role with the Minister of Finance and the government on co-developing a carbon pricing plan that worked for everyone in the Northwest Territories.
Individual Members may have additional comments or questions as we proceed with consideration of the bill. Thank you, Mr. Chair.
Thank you, Mr. Testart. I understand that this is an emotional time for everyone: the long days, it's the end of the Assembly; a lot has been put into these bills, and I just ask that everyone do their best to watch their words carefully and ensure that everything said is respectful. The one thing that I am always proud of in this House is that we have a level of decorum that is seen nowhere else in the country, and I just ask that we all do our best to maintain that. I am going to open up the floor to general comments. General comments from committee? Mr. O'Reilly.
Thanks, Mr. Chair. I am not a Member of this committee, but I did sit in on much of their deliberations. I did attend the public hearing that was held here in Yellowknife, and I am disappointed. Well, I want to thank the committee for allowing me to do that and attempt to get a better understanding of the bill and the approach that is being taken by our government with regard to carbon pricing.
I do have major concerns with the bills, particularly Bill 42, and my concerns revolve around the lack of public reporting. I have made that well known on the floor of this House, that we need to have integrated and comprehensive public reporting of the money that is collected, what it's used for, and its effects on greenhouse gas reductions, and how we are accomplishing the pan-Canadian framework target over time. Unfortunately, the bill really does not contain any provisions for any kind of public reporting, and all of the rebates or grants are going to be determined by regulations set afterwards. Although I know I have heard my colleagues across the floor talk about this is a made-in-the-North approach, it's really a made-by-Cabinet approach that I cannot accept.
It's also linked to what I believe is an inadequate energy strategy, where 44 percent of the greenhouse gas reductions are supposed to come from Taltson expansion. There is no money to do it. There is no feasibility study. There is no business plan. There is no market for Taltson expansion, so I can't see how the energy strategy and the investments that this carbon tax, the small investments this carbon tax, may allow can enable us in any way to actually reach the pan-Canadian framework target.
The carbon tax is also linked to the Climate Change Strategic Framework, which does not address the climate change audit that was carried out by the Auditor General of Canada, that recommended that there needed to be structures, an organization, put in place to ensure that there would be climate change leadership within our government. We do not have that yet, and the Climate Change Strategic Framework does not deliver on the inadequacies pointed out by the Auditor General. We have, I guess, a deputy-minister-level committee, but there is no leadership council; there is no requirement for consideration of climate change implications in terms of Cabinet or Financial Management Board decisions; there is no coordinated reporting. There is just no structure or organization that is going to establish the necessary leadership within our government to ensure that we start to take real action on climate change.
I agree with my colleague from Kam Lake, that the information about the federal backstop has not really been provided to us, and I will have questions for the Minister on the bill when he is at the witness table with his staff, around what the federal backstop really means for the Northwest Territories and some of the information that our government has put out about what the federal backstop is, really, what it means, so, for all of those. I believe that a carbon pricing system is a very essential tool in terms of taking action on climate change. Unfortunately, this plan doesn't meet the needs that we have with regard to climate change. It is largely been designed, as the Minister has repeated many, many times, this is about mitigating the impact of a carbon tax on our citizens. It is not about actually addressing climate change. That should be the primary purpose of a carbon pricing system here. For all of those sorts of reasons, Mr. Chair, I cannot support the bill. I will have further questions on the specifics of the bill when the Minister is at the table. Thank you, Mr. Chair.
Thank you, Mr. O'Reilly. Right now, we are discussing the committee report. We will have an opportunity to discuss further issues as we move through the report. The chair will likely make a number of recommendations. Then, we have two bills to go through. There will be opportunity to discuss individual clauses there. I just want to let committee know that there is plenty of time to get your comments out. Anything further? General comments on the report? Ms. Green.
Thank you, Mr. Chair. I appreciate the work that the standing committee put in to examining these bills. The process was obviously very fraught. I don't want to go too far down that road, because it is well-documented in this report and by the remarks of my colleague. I just want to underline that the studies that are being reported in the media reveal a real urgency around this issue to begin taking action in order to slow warming and, if at all possible, to roll it back.
I hear a lot of messaging from the government that says, as a small jurisdiction with a small population, that somehow we need a bye on participating in the solution. I want to say that I don't agree with that. We need to be fully involved in action on the climate crisis. This is one possibility. There are many others. I spoke about some of them during the last session.
Just to quickly recap, I suggested that there be a whole-of-government approach to procurement that takes climate change into account so that the most energy-efficient ways of doing business are those that are favoured. I have talked about personal responsibility programs. I have talked about the need to increase money for retrofits. At the moment the uptake on retrofit programs is not very robust. More money could encourage more people to do it. There needs to be a suite of actions that would take action on the climate crisis. This is just the first one, as far as I am concerned. There will need to be more. They may need to be more aggressive than this is.
I am prepared to support this bill, but if I am fortunate enough to be re-elected, I will certainly be making a point of saying that this is just the start, that the government needs to stimulate action in many other areas to deal with the climate crisis. This is not a one-and-done solution. There is more than needs to be done. Thank you.
Thank you, Ms. Green. Next, I believe I have Mr. Blake.
Thank you, Mr. Chair. I, too, will be supporting the bill. For the constituency I represent, in order to go anywhere, a good example is Aklavik or Tsiigehtchic, the majority of the time, you need to travel to Inuvik just to get groceries. That is probably, easy, $150, almost $200, return trip. That is for gasoline. That is usually once a week or once every two weeks you need to do that. Any time you want to go hunting, you are looking at $500 just for gasoline, maybe more. That is a rough estimate.
In my riding, compared to living in Yellowknife, you just go downtown, and you are at the grocery market. A good example is, where I live, it is the highest cost of living, let alone the highest cost of gasoline and fuel. For the people that I represent, to have them pay more, especially under the federal backstop, at least here, we are kind of limiting what we are trying to do. It really is a shame.
I know there is a climate crisis, but making our constituents in the highest cost of living areas pay more is really challenging because they have a 35 percent employment rate. Those who are unemployed have to pay more for fuel, gas. I know they do get a rebate for home fuel, but a lot of these rebates I'd like to see put more focus on small communities because I will tell you one thing. In my riding, there is not a lot of people who access these solar panels or everything that is available because they just don't have the capital to do that or expertise, people who put those in place. It is really challenging the further north you go. There needs to be more focus on that.
I believe this is the best plan we have moving forward. Who knows what will happen in the next federal election. There are plans to possibly take this out, depending on who gets in. Leave it at that. For now, I am willing to support this. Thanks.
Thank you. Next, I have Mr. McNeely.
Thank you, Mr. Chair. I, too, will support this bill. I totally agree with my colleague from the Mackenzie Delta here on the smaller communities. Because of the high unemployment here, not a whole lot of people have the front-end capital to fund and install solar panels and then get a rebate later. Hopefully, the revenue generated by this will take that into account.
Other pilot projects such as the one done by the Yamoga Land Corporation in Fort Good Hope where they bought over 50 of these secondary combustible wood stoves and install them, sent two young fellows out to do the installation or get the training to do the proper installation, so many inches away from the wall sort of thing and the chimneys. If that could be looked at and maybe even look at some of these other energy-efficient appliances here.
For example, the older models, which are still currently supplied, the hot water tank, you have your hot water elements here burning 24/7 where that could be reduced for on-the-demand system of providing hot water in homes, which, therefore, reduces the amount of electricity to have hot water in your home when the taps are turned on. Those are just a couple of examples there that I am hoping that the operational side of this revenue would go towards things of that nature in the smaller communities where the employment is very desired by a lot of people but the opportunity to create those employment are very, very limited. Thank you, Mr. Chair.
Thank you, Mr. McNeely. It is pretty obvious I am giving everyone a wide berth here. We are not talking about a bill. This is not a bill. This is the report. I know it is hard. We can't avoid discussion on the bills, but this is not a bill. This is the report, just to be clear to those who are reading Hansard. Next, I have Mr. Nakimayak.
Thank you, Mr. Chair. Speaking about the report, we travelled around the territory. Obviously, the issue was the cost of living, the cost of transportation. In my region, we rely a lot on gasoline for harvesting, for country food and things like that, transportation for airplanes, which we see there will be exemptions. I just want to say, Mr. Chair, I won't be long, but if we went with the federal backstop, we would definitely be paying more, and we would definitely feel it further in the territories. I think that this is probably the best way forward for now as the legislature and the territories are moving forward. Thank you, Mr. Chair.
Thank you. Anything further from committee? General comments? Mr. Nadli.
Thank you, Mr. Chair. I stand behind the report that was brought forth in the Legislative Assembly. The concern in terms of the timeliness of legislation has to be raised. I know that we are kind of at the tail end of the 18th Assembly. We were dealt a task, and part of that process was to undertake a level of consultations with the people of the Northwest Territories.
We are also, of course, dealing with another parallel process that was at the federal level in terms of implementing an income tax on petroleum products or carbon-based products. It was unfortunate that the task was for the government to deal with climate change, to take that first step, and that first step was to tax people. Perhaps down the road, there could be some discussion in terms of taking constructive steps in terms of dealing with some practical initiatives. One of them is reductions on plastic products. There is a country in Latin America, Costa Rica, that has banned plastics. Why can't we do that here in the Northwest Territories? Perhaps initiatives like that could be contemplated in the next Assembly.
For the most part, I stand behind the report. The concern was accepting what the federal government had proposed in terms of the federal backstop. In its implementation, I think that we have customized an approach in terms of how it is that it could work up here in the Northwest Territories. Foremost, as an MLA, is the concern about how it is going to impact the cost of living to people who, in their livelihood, that everybody drives trucks. You have to drive a skidoo. You have to drive a boat to get to your destination. Even if you hunt and trap, you have to drive a skidoo. It is going to have a big impact. I think that this government has taken a level of responsibility, customize it, to try to cushion its implementation.
As I indicated and stated at the outset, I think that we could have done a little bit better in terms of consultation and sharing of information to make this legislation stronger. Mahsi.
Thank you. Further general comments? Mr. Testart.
Mr. Chair, I move that this committee recommends that, for all bills proposing to establish, replace, or make significant changes to territory legislation, a plain language summary be prepared and made available to the appropriate standing committee at the time is introduced in the Legislative Assembly. Thank you, Mr. Chair.
Thank you. There is a motion. The motion is in order. To the motion, Mr. Testart.
Thank you, Mr. Chair. This motion applies to much of the work of the standing committees of the Legislative Assembly. Oftentimes, the committee is put into a position of defending a government bill, and its role is rightfully to review that bill. Having access to some of the questions that the public wants to ask is crucial to ensure that we can clearly define the roles of the executive branch and the legislative branch and so those respective branches of government can operate effectively.
A plain language summary attached to the public consultations on bills such as this one would greatly improve the public's understanding of our process and answer the questions that they might have that the committee is either not in a position to answer, unable to answer due to confidentiality concerns, or simply does not know the answer. This motion calls for those plain language summaries to be prepared ahead of time for major legislative initiatives so that the public is aware of what the contents of those bills are.
I should note that, in some of the cases with the other bills that have been brought forward in this House, extensive work was done on plain language summaries that greatly assisted the public's understanding of the bills and the standing committee's review of those bills. Those processes are a good template to follow for the future. Thank you.
Thank you. To the motion.
Question.
Question has been called. All those in favour? All those opposed?
---Carried
Mr. Testart.
Mr. Chair, I move that this committee recommend that the Government of the Northwest Territories, led by the Department of Municipal and Community Affairs, complete its work to address 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. Thank you, Mr. Chair.
Thank you, Mr. Testart. There a motion on the floor. To the motion. Mr. Testart.
Thank you, Mr. Chair. This House is well aware of the shortfall to the municipal financing formula that is putting increased cost pressures on our local governments in the Northwest Territories. We have heard many of those governments be concerned that they will be passing on costs to their residents as a result of the shortfall.
The concern that the standing committee heard directly from the NWT Association of Communities is that, without specific rebates or grant programs provided to municipalities in light of the carbon tax, the additional taxes that will be paid on municipal vehicle fleets or other things that are not automatically exempt will drive the cost of operating those local governments. As a result, those costs will either have to be passed on to residents in the form of higher taxes or a reduction in services. This is already a challenging state of financial affairs for our communities, who are dealing with a systemic gap of resources, and this is only going to add more cost pressures.
Committee felt very strongly that we needed to do more than simply draw attention to the problem, but make a concrete recommendation on how to resolve it, which is ultimately more funding to compensate for these additional costs, so that we take the pressure off of cost of living of Northerners. Thank you, Mr. Chair.
Thank you. To the motion.
Question.
Question has been called. All those in favour? All those opposed?
---Carried
Mr. Testart.
Mr. Chair, I move that this committee recommend that the Department of Finance table on annual report in the Legislative Assembly on the carbon tax that provides detail on: total carbon taxes collected; carbon taxes collected from large emitters; total rebates provided; number and nature of grants provided; costs of administrating 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. Thank you, Mr. Chair.
Thank you. There is a motion on the floor. To the motion. Mr. Testart.
Thank you, Mr. Chair. During committee's review of the early stages of the carbon tax bill, the committee wrote to the department several times and encouraged them to bring forward reporting like this. There are models of carbon pricing in Canada, most notably in British Columbia, that require a tax plan to be tabled every four years, in the BC legislature, that clearly lays out how all of the money is being raised, where it is coming from, and where, ultimately, it is going to be spent. That is part of their budgetary process.
That kind of transparency and clarity is, the committee believes, the best way to ensure that we can guarantee to Northerners that the revenues raised from this new tax are going to their intended purposes. Without formal reporting like this, there will be no way to independently verify that the tax is largely revenue-neutral and being committed towards clean growth and climate change mitigation.
This is a crucial motion. We have had a commitment at the clause-by-clause review at the committee stage that the government was working on something. We were a bit dismayed that it was not in the bill proper, but hopefully, the ultimate reporting on carbon tax follows this recommends, and the public is able to see quite clearly how these revenues are being raised and what they are being spent on. Thank you, Mr. Chair.
Thank you. To the motion. Mr. O'Reilly.
Thanks, Mr. Chair. I agree with this recommendation from the committee. I have made many statements in this House about the need for stronger accountability and reporting around the climate crisis. When I saw the bill, I was quite disappointed that there was nothing written into the bill that provides for or requires this kind of reporting. I support the work that the committee has done to review this and encourage that it be done. I think that it can and should have been part of the bill, so I do support this recommendation. Thanks, Mr. Chair.
Thank you. To the motion.
Question.
Question has been called. All those in favour? All those opposed?
---Carried
Mr. Testart.
Mr. Chair, I move that this committee recommend that the Department of Finance undertake an annual assessment of the impact 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 greenhouse gas 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 greenhouse gas emissions. Thank you, Mr. Chair.
Thank you, Mr. Testart. There is a motion on the floor. The motion is in order. To the motion. Mr. Testart.
Thank you, Mr. Chair. Again, this is another way that we can ensure transparency around the stated goals of carbon pricing to make sure that the impact on cost of living is going towards its intended purpose of mitigating the disastrous effects and deleterious effects of climate change on our fragile northern environment. The stated goals of this need to be around greenhouse gas emissions. Otherwise, why do it? This motion calls for exacting reporting on how effective the tax is being in meeting its stated public policy goals. Thank you, Mr. Chair.
