Debates of August 15, 2019 (day 84)

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Statements

Thank you, Mr. Chair. We don't know what the federal backstop would look like for the Northwest Territories. That is a better backstop for the Yukon. Ours may have been different. We don't know that. Realizing that the federal backstop was going to be a little harder for the people of the Northwest Territories to swallow, we wanted to work on an approach that we believe was fairer to the people in the Northwest Territories. I will go to Mr. Stewart to reply to some of the Member's concerns with the numbers. Thank you, Mr. Chair.

Thank you. Mr. Stewart.

Thanks, Mr. Chair. I think one of the important distinctions are in terms of what's going on in the Yukon and Nunavut, and what is going on in other jurisdictions where the federal government has imposed the backstop. The difference is that, if the NWT decides not to put in a carbon tax, the federal government will impose one. They did not impose one in the case of the Yukon. The Yukon asked them to use their system, which meant that the federal government made the commitment to hand those revenues over.

In the case of the provinces where they did not come up with their own, or asked the federal government, the federal government makes the decisions of what they do with those revenues. That is a fundamental difference between the territories. I know, in the case of the Yukon and Nunavut, they actually collected a lot of our information. They have done some tweaks, obviously, in terms of their approach that were more appropriate for their jurisdiction, but again, the difference is that, because they asked the federal government, the federal government agreed to let them make those decisions. In those provinces where the federal government is imposing the backstop, the federal government is deciding what to do with those revenues. Thanks, Mr. Chair.

Thank you. Mr. O'Reilly.

Thanks, Mr. Chair. I agree with most of what our witness has said, but the federal government has also agreed that they will return revenues that are collected through the federal backstop to the jurisdiction where they are collected, so there is already a commitment to do that. In fact, that is exactly what the Yukon negotiated.

My point in raising these questions, Mr. Chair, is that we had an opportunity to design a different system. Committee asked to try to work with the department, with the Minister, to come up with options for what our system could look like in terms of making sure that people in rural, remote communities would receive greater consideration, ways of revenue sharing. All of those sorts of ideas were put on the table, but we got nothing back. As much as the committee tried to get some options discussed and laid out scenarios, it just didn't work. What we've got now is a bill that sets out what the carbon tax is going to be. Everything else is left to the discretion of Cabinet. We could have had a system like the Yukon, but we don't. We could have had revenue sharing with First Nations, Indigenous governments, municipalities. We could have had some consideration of rebates that would provide more for people in rural and remote communities. We don't have that. We could have negotiated a system like they have in the Yukon. That's why my position is not to accept the plan that Cabinet has developed, but leave it to the 19th Assembly, redesign this for our own needs, make a truly made-in-the-North approach. Thanks, Mr. Chair.

Thank you. Anything from the Minister?

Yes, thank you, Mr. Chair. We designed a program that would mitigate the impact to the people of the Northwest Territories, the cost of doing business in the Northwest Territories. Like I said before, the easiest thing we could have done is nothing and let the government decide what's good for us, like they have been doing for a long time. Those days are over. I've said before, to delay this to the 19th, we need to come up with a decision. Do we just stop what we do and say, well, federal government, you take over because nobody wants a carbon made-in-the-North approach to carbon tax, and mitigate the impact of carbon pricing to the people of the Northwest Territories? We like your approach better even though it is going to cost our residents more money, and we can put that in our campaign brochure. Thank you, Mr. Speaker.

Thank you. Anything further? Seeing nothing further, can we agree that we move to the clause-by-clause consideration?

Speaker: SOME HON. MEMBERS

Agreed.

Thank you, Committee. Mr. Testart.

Thank you, Mr. Chair. I just have a few other questions for the Minister. During this process and in previous communications the government has put out, there has been a claim that the federal government will control how carbon tax revenues are spent, or as the Minister said in his opening comments, "spend the carbon tax revenue as they see fit." Yet the federal government has a stated policy that every dollar raised from a province or territory will return back to the jurisdiction. Can the Minister or his witnesses provide me with a federal policy that contradicts the stated policy that all dollars raised from that federal carbon tax would be returned to the jurisdiction? Thank you.

Thanks, Mr. Chair. The Member is right that they have said that they will spend the money in the jurisdiction where it is raised, but how they spend it will be up to the federal government. I will use the example for a small business. They came up with some specific examples around small business, where they are going to provide rebates in those provinces where they have imposed the carbon tax. The small business would have to pay some money to do things like retrofits and those sorts of things, and they will use part of the carbon tax revenue to offset some of that. That doesn't change how much money the small business will actually be able to pay in carbon tax, so when you compare that with our approach, where we will have that point-of-sale rebate of heating fuel, that makes quite a difference to small businesses. We also already have programs under the low carbon economy for businesses to be able to get access to funding for retrofits and those sorts of things. What the federal government is doing in other jurisdictions, we already have in existence.

The Member is correct that they have said they will return the revenues to the jurisdiction where it is collected, but they will do it under whatever programs that they feel, will see fit to implement, and those may or may not be the priorities of the Northwest Territories. Thanks, Mr. Chair.

Thank you, Mr. Testart.

Thank you. I think that's a much more balanced assessment than what the public has been told with most of the advertising and materials that have been put out there, so I appreciate that clarification.

My second question is: we've heard a lot about how the federal backstop is much worse for the North. Can the Minister produce a costed federal carbon tax plan for the NWT that is specific to the NWT, informed by data drawn for the NWT, and has been previously shared with the department so that they are able to do their own assessment of their plan versus the federal backstop plan? Can the Minister produce that? Thank you.

Thank you. Mr. Stewart.

Thanks, Mr. Chair. I will start on the revenue side. On the revenue side, there are a lot of similarities, as one would expect, given that the federal government set the criteria of how the carbon tax should be implemented and had jurisdiction that wanted to do their own, develop their plans, and then, had to check against the federal approach to make sure there is at least a level of consistency.

The one area that is different is related to the large emitters and their output-based pricing system, and we have had discussions about that with committee.

On the expenditure side, we have come up with an approach around offsets and rebates that reflect more of what the northern context is. For example, the heating fuel one is a big issue, as the Minister talked about in our small communities. Also, the way we are doing the cost of living offset, so it will be a quarterly payment rather than waiting for in other jurisdictions in the south, you would actually get that back as part of your income tax filing, so it would come once a year as opposed to quarterly. That has a huge impact on people's cash flow as they are trying to pay bills and those sorts of things.

To answer the question directly, no, I wouldn't be able to produce a very specific example of where those differences are, but what we have tried to do in the plain language summary is say, "This is what the feds are doing elsewhere, and we can't know for sure what they would do in the Northwest Territories if they were forced to impose, but they would make those decisions." Thanks, Mr. Chair

Thank you. Mr. Testart.

Thank you. In response to the questions from the honourable Member for Tu Nedhe-Wiilideh, the Minister made comments to the effect that we would repeal the carbon tax if the federal government scrapped the approach.

I would like to ask the Minister why he is so certain. That sounds like a decision made for the next government, and we have had a whole sitting here where Ministers are telling us that some decisions are left to the next government. Why is the Minister so confident that the next government will scrap the carbon tax once it is in place? I don't know how he is able to make those kind of decisions for a future government. Can he clarify those comments? Thank you.

Thank you. Minister.

Thank you, Mr. Chair. You know, I speak Beaudel English, but I still don't think that I need an interpreter. I said that I would assume that the next government coming in would repeal the legislation if the federal legislation approves our appeal. I said I would assume that they would, based on the effect that it is having on of people in the Northwest Territories. It was an assumption, and they would make that decision. Thank you.

Thank you. Nothing further. Does committee agree that we move into clause-by-clause consideration of the bill?

Speaker: SOME HON. MEMBERS

Agreed.

Thank you, committee. We will consider the bill number and title after consideration of the clauses. Please turn to page 1 of the bill. I will call out each clause. If committee agrees, please respond accordingly. Clause 1.

---Clauses 1 through 7 inclusive approved

Clause 8. Mr. O'Reilly.

Thanks, Mr. Chair. I do have some questions on clause 8. There is provision in this clause for a rebate of carbon tax. It says that the Minister may, in accordance with the regulations, provide a rebate. Also, in 2.3, large emitters are to be, I guess, defined by regulation, and grants can be prescribed by regulation. Firstly, there is no definition of what a large emitter is in the bill. What is a large emitter? Thanks, Mr. Chair.

Thank you. Mr. Stewart.

Thanks, Mr. Chair. The large emitter definition will be in the regulations, and it is consistent with what the federal government has done, which I believe is 50 kilotons of emissions or higher. My understanding is that we have four of those in the Northwest Territories, based on the federal data that I have seen. Thanks, Mr. Chair.

Thank you. Mr. O'Reilly.

Thanks, Mr. Chair. How are the regulations going to be put together? Is there going to be any opportunity for the public, industry, large emitters, to comment on the regulations in draft form? Thank you, Mr. Chair.

Thank you. Mr. Stewart.

Thanks, Mr. Chair. Some of the regulations are going to need to be put together fairly quickly. I think that we have committed to share those as we develop them. We certainly have been talking with stakeholders about some of the more program elements, like the individual trusts and what the criteria may be around that. We will share the detail on those with committee, as well. Thanks, Mr. Chair.

Thank you. Mr. O'Reilly.

Thanks, Mr. Chair. Well, that is kind of interesting. Committee is not going to exist in about 10 to 12 days. How can this be shared with committee when committee is only going to be around until August 31st? Thanks, Mr. Chair.

Thank you. Mr. Stewart.

Thanks, Mr. Chair. The specifics of what I was referring to, in terms of sharing with committee, are things like the individual trust for the large emitters and some of the criteria, and I assume that would be done with the standing committees of the 19th Assembly. There is no real urgency in terms of implementing the trust program. Yes, we will have to collect the data, but in terms of taking applications and that, I think that we have a little bit of time to get that implemented. Thanks, Mr. Chair.

Thank you. Mr. O'Reilly.

Thanks, Mr. Chair. I am a bit surprised to hear that some details of these regulations may have already been shared with outside interests or parties. Can that be confirmed, and what sort of level of detail are we talking about? Thanks, Mr. Chair.

Thank you. Minister.

Thank you, Mr. Chair. No, the regulations haven't been shared. Thank you.

Thank you. Mr. O'Reilly.

Thanks, Mr. Chair. That's not what I asked. I believe that the deputy minister had indicated that there had been some discussions already with large emitters around regulations. Can someone confirm whether that is the case? Thank you.

Thank you. Minister.

Yes, Mr. Chair. Let's not try and confuse things here, and apologies to the Member if he misunderstood. My understanding is that they have spoken to some of the large emitters on the program, not the actual regulations themselves, as he is implying. Thank you.

Thank you. Mr. O'Reilly.

Thanks, Mr. Chair. I am not trying to imply anything; I am trying to understand what is actually going on, because this side of the House has not really received much information about what the program is. We have received nothing. There seems to be some kind of commitment from the deputy minister to possibly share draft regulations with a future committee. Is there going to be an opportunity for the public to comment on draft regulations made pursuant to this section of the bill? Thank you, Mr. Chair.

Thank you. Can the Member please repeat the question?

Thank you, Mr. Chair. I would like to know whether there is going to be an opportunity for the public to comment on draft regulations made to establish rebates of the carbon tax and grants under the carbon tax as this bill sets out. Thank you, Mr. Chair.

Thank you. Minister.

Thank you, Mr. Chair. The regulations need to be developed very quickly, so we will get that done, and then, as the next government goes through the main estimates process, there may be other opportunities for input, but the regulations need to be done as quickly as possible, and we are going to undertake that work. Thank you.