Thank you, Mr. Speaker. Mr. Speaker, I move, seconded by the Member for Member for Yellowknife Centre, that Bill 3, Carbon Tax Repeal Act, be read a second time.
This bill amends the Petroleum Products and Carbon Tax Act by removing existing taxation measures for the carbon tax and the definition of natural gas while enabling the Minister to provide grants for emissions reduction projects. Thank you, Mr. Speaker.
Thank you, Member. The motion is in order. To the principle of the bill. Member from Range Lake.
Thank you, Mr. Speaker. Mr. Speaker, no matter where you stand on the debate over carbon pricing, it has become clear that the Northwest Territories carbon pricing regime is leaving Northerners in the cold.
Several years after its introduction, the GNWT still cannot clearly state how successful its price on carbon has been at reducing emissions while their rebate system has not kept up with the increased in cost of living. In a previous Assembly, the Standing Committee on Government Operations clearly warned the government that their rebate strategy was inadequate and raised doubts regarding whether or not the GNWT could clearly grasp the impact that their carbon pricing regime would have on Northerners.
Mr. Speaker, the committee at the time raised a number of key concerns. It was missing too much information from the department, its concern regarding cost of living, the struggle to understand the effects on Northerners, the prioritization of large scale mining over small businesses and consumers, the lack of understandings on how emissions will be measured, and serious consultations with serious issues with how consultations were performed with not only the standing committee but members of the public. And this is all extending from previous issues that were raised by the standing committee of the 18th Legislative Assembly, of which I was a Member, that raised similar concerns at the time. So both times that this legislation has been brought forward in this House it has not had the endorsement of the standing committee, of its oversight committee, which is significant because the role of the standing committee is to improve bills. Both times the passage of the legislation has been contentious to say the least. It has passed. But it was not unanimous. It was by no means unanimous and not just drawn on straight ideological lines. This is not a matter of left versus right or conservative versus progressive of carbon tax versus the economy is stupid. You know, this is a much broader issue where individuals on both the who are very concerned with the future of the climate are unhappy with our carbon tax regime and people who are concerned about affordability are unhappy with it. And they say you know, good public policy that results in compromise leaves everyone unhappy. But when it's this significant, I think we need to ask ourselves is it really working? And for me, the fundamental question is, is carbon pricing as designed, this madeinthe North system, reducing emissions? I've asked that question, and the answer is we can't tell you because we don't know. And it is a complicated question. There's many factors that affect the reduction of emissions, but we should be able to have some idea of how this pricing is working to meet its intended public policy.
The public policy goal of carbon pricing is not to provide rebates to Northerners. That's a choice, a policy choice, that's been made to ensure that the cost of living is not unduly burdened and we drive people out of the Northwest Territories. But I think if you talk to Northerners, and we all have because we only recently were talking to them to get the seats we have in this House today, they will tell you that these costs are becoming increasingly unaffordable. And it's not just the carbon tax. Of course it's the high cost of fuel. It's the high cost of food. It's the high cost of rents. It's the high cost of mortgages. Everything's going up across the board. And we are simply not meeting the needs of Northerners, which is creating incentives for them to leave.
So when we look at our carbon pricing regime, we have to ask what are we doing with this? And I think what we've heard through successive through this finance Minister, the previous finance Minister as well, that this has been forced on the Northwest Territories. No one wants this but we have to do it, so we're going to build our own system to shield Northerners from the costs. Yet we see our sister territory Nunavut, and our friends in Yukon as well, they allow the federal government to collect the tax, administer the tax to the federal backstop, and still control their own rebate systems. So what this bill proposes to do is exactly that. It's to put the it's to cut out the middleman and put the responsibility back in the hands of the people who imposed this carbon tax regime on the Northwest Territories in the first place.
And there are good reasons to consider to consider the federal system if folks are concerned that a repeal of our system would lead to catastrophic consequences. Under the federal backstop, 90 percent of revenues collected by the federal government are returned to individuals through rebate cheques. The federal rebate covers the direct carbon costs for 80 percent of households in this country. Approximately 70 percent of households receive more in tax rebates than they receive than they pay in carbon taxes, and the remaining 10 percent of that tax, the 90 percent that goes to individuals, 10 percent goes to fund efficiency projects for small businesses, schools, and hospitals in each province and territory. This those that's just an example of what it looks like on the tin.
Now, what I think we'll be able to have more of a bespoke system that meets northern needs, that's why this bill was drafted expressly to leave the rebate system alone, and I know that some there are some critics of that. There are critics of the rebate system. But I think we can work on that as an Assembly together to fine tune it. But this bill represents a reset point where, again, we can put we can cut out the middleman, we can put the authority back in the hands of the federal government, of the Prime Minister, and he can defend this pricing system and work with our government to make it work for Northerners. I don't think if there's a change at the national level and this tax is repealed, I don't think there's anyone in this Chamber who is going to insist that we maintain our own. And to me, that doesn't speak as something that was created by Northerners for Northerners to meet northern priorities. That sounds like something that's been imposed on us. And if that's the way we feel about it, let's give it let's make the person responsible for it while we continue to direct the flow of revenue back into the rebate into the rebate programs that we've worked carefully to develop over the years. I believe this is possible. I don't believe we have such a poor relationship with the federal government that they will close the door on that initiative, and we won't be able to have those discussions.
I want to be clear, though, for those looking for an end to carbon pricing in the Northwest Territories, this bill will not achieve that. There's no because as soon as our tax goes, we'll be noncompliant with the federal legislation and the backstop will apply. There's no escaping carbon pricing, nor should there be. There should be a price on pollution. We live in a world that is irreconcilably affected by a changing climate. We just twothirds of the Northwest Territories became climate refugees last summer. Our ice roads are unreliable. Like the mighty Mackenzie River is no longer reliable.
Our forest fire seasons are have become catastrophic. It's not just here. It's in other places as well. But this is evidence of a changing climate, a climate that demands action. So I want to be clear in my support for this legislation and bringing it forward it is not a rebuke of putting a price on pollution. But we have to put a price on pollution where it's not just a tax on people living in the Northwest Territories, where there's alternatives for low carbon options, low carbon fuels, low carbon technologies, that can allow Northerners to escape the tax and invest in something that can help that can help fight climate change. That's what we want. The technology's not just not there yet. And what this will have the effect is making sure people don't live here. And I don't think that's the goal. I don't think that's the goal of carbon tax. I know it's not the goal of carbon tax. It's to innovate. It's to create an environment where we can we can protect our climate and and, you know, do our part as individuals, as consumers.
So I would like to see us build something that works better, but I don't think we can continue on by continuing to demand exemptions as a government by having finance Ministers who consistently who insist that they'll repeal it if it's struck down at the federal level. That's not clear policy. It's confusing. It's muddled. We're not sure if we're supporting climate change. We're not sure if we're anticarbon tax. We're just in this mushy middle. But we're one of only three jurisdictions that has their own system. Everyone else uses the federal backstop with either a the federal rebate program or their own rebate program. So, again, this bill is to provide policy clarity to the public, to our national partners, to our international partners, about who is responsible for carbon pricing and how we're going to administer it locally in the Northwest Territories.
And I want to be clear that I do I respect the work that my honourable colleague has done, the Minister of Finance, and I want her to be able to continue that work in partnership with Ottawa. But we need to give them the responsibility. We need to pass this legislation, hand the reins back to Ottawa so if there are changes in the future to the tax, whether it's repealed at the national level, whether there's a change to home heating fuel rebates, we're not waiting months for these things to happen, or we're not bringing back, you know, emergency debates to immediately strike it down. We can do this in a way that if there's changes at the national level, we're not mirroring them anymore. They just happen, and we just control the flow of the rebates. I think that's a much more neatly tied together system, and it clearly puts the responsibility back where it belongs with the federal government. And I call on this House to support this bill. Thank you very much
Thank you, Member from Range Lake. To the motion. Member from Yellowknife Centre.
Thank you, Mr. Speaker. In this process of technology, my laptop died just before so I'm going to go with the roughest of notes with the most genuine of hearts. It's true; I always speak from my heart.
So, Mr. Speaker, regardless of the issue, I wish to speak to one theme I hope is true is the fact that when I do speak for an issue, I do care about it and in the sense of that the impact this has on Northerners is and the choices we make. Now, keep in mind the last Assembly barely passed its own mechanism to manage its own carbon tax processes and, frankly, I don't think they did enough time and enough soul searching to examine what's the best method for Northerners.
Now, it's not easy for me to say let's give it back to the feds to manage. I mean, I was here during devolution when all we talked about is making sure those people in Ottawa stop making choices for us; let us make our own choices. But, I mean, it's true on this particular one why would we carry the burden of the federal government system on this particular one?
I think, as my honourable colleague, who I appreciate initiating this the bill, the process, and conversation at the very least, has it right. I mean, if we cannot manage these things by knowing what they're doing, why are we doing them? And I mean, it's significantly stressful and I struggle with trying to figure out that if we don't know if it's having any positive impact, then I mean we have to question why are we doing these things? And then furthermore why are we shifting the burden on our citizens.
Now, I also agree the fact that there you know, there may be the slightest or thinnest or modest of veils that we don't know what's going to happen next. And that's not a defence of doing nothing. As a matter of fact, that's almost the worst defence of status quo, just because we do it this way we should continue with this way. But as the hallmark of asking what's relevant, why are so many jurisdictions choosing to use the federal system versus go with your own ways, the Northwest Territories is doing it.
I'm not convinced we're doing it better. I'm not convinced we can be as nimble with these types of responses and problems that we see across Canada. I'm convinced that the federal government still doesn't recognize our unique challenges. Yes, they've come part way in all fairness. I should tip my hat to that. But we must keep the advantage of working with them, and I think that they will find a way to work with us if we choose. So, Mr. Speaker, without the broadness of my finer detailed notes as my computer is just barely on now, I'll just leave it at that. But what's key to this, ultimately it's second reading, Mr. Speaker, is this gives the chance for this bill to go to committee to have the forthright and honest discussion. We will all have constituents that come to our door and say we think this is a good idea, then we'll walk out the next door and somebody will say no, this is the worst idea. But getting it to committee allows the committee to do the detailed analysis, the time, talk to people, talk to Northerners, talk to the mining industry, the construction industry, talk to all people to find out the impacts on how they feel on this one and what we can do. But most importantly, in that context, is what can we do better for them.
So in that service to the people of the North, I'll be supporting this bill, and I encourage all my colleagues to give it the opportunity for a full and a robust discussion with Northerners by giving it to committee so that we can have that honest consideration. Thank you, Mr. Speaker.
Thank you, Member from Yellowknife Centre. To the motion. Member from Yellowknife North.
Thank you, Mr. Speaker. Mr. Speaker, I'm afraid I cannot support sending this bill to committee because I believe this bill could not accomplish the goals or solve any of the concerns that Members in this House and members of the public have been raising about the carbon tax. I fear that by sending it to committee, far from creating policy clarity we will be causing even greater confusion and chaos amongst the general public, community governments, and industry stakeholders about what is happening with the carbon tax, and that this could cause more harm than good.
The first problem is that the title of the bill is the Carbon Tax Repeal Act, so people could be forgiven for thinking that the carbon tax will be repealed and therefore they won't have to pay the carbon tax anymore. But this is not true. The carbon tax will continue to exist until the federal government cancels it. The GNWT cannot change how much people in the NWT are charged for the carbon tax. So let me just repeat that for clarity. This bill cannot change anything around how much carbon tax people in our communities have to pay. All that this bill can change is who collects the tax. It will mean that Ottawa collects our money instead of the GNWT.
I have not heard any of my constituents asking for this change. And for the life of me, I cannot understand why we would go to all this trouble, spend the resources and the time of Members and staff, so that we could have less control over the same carbon tax.
Now if committee wants to examine aspects of our system around rebates or offsets that need to be changed, they are free to do that without this bill, without handing the power over tax collection to Ottawa. If committee wants to examine how we might ensure that our carbon tax would disappear in the event that the federal government eliminated the carbon tax requirement, they are free to do that without this bill. I myself would certainly support stopping any net carbon tax revenues from going into the general revenues of this government. I would want to ensure that they are spent rather on renewable energy projects to mitigate climate change. But this bill takes us in the opposite direction from that. We would not have any net revenues left to go toward renewable energy alternatives in the NWT.
This could also cause particular financial uncertainty for the mining industry because the NWT has taken a significantly different approach in how we apply the carbon tax and rebates to industry versus the federal government's backstop. Mining operations in the NWT have made their financial decisions and plans based on the existing NWT approach, and I don't see the point in pulling the rug out from under them at this point, or even speculating about changing things at this point. I haven't actually heard anyone calling for our system of carbon tax on large industrial emitters to be studied again or overhauled. I have heard Members saying that they want to provide an environmental certainty for industry, and this does the opposite of that.
So what I've heard from movers of this bill is that for the most part they want to keep the status quo system of offset payments in our system for large emitters. They just want the federal government to administer the same system that we already have instead of the GNWT. The problem is that as soon as we repeal our carbon tax, the federal government is in control. And they don't have to agree to administer the system we already have. We would have to plead with them. We would have to spend significant time and resources and political capital to try and convince them to bring us back to where we already are now. And there's a real risk that they would say no. And that's not about poor relationship between our government and the federal Ministers or our Ministers and the federal Ministers. It's about the fact that the federal government officials have finite time for us. And of all the things that we need to be talking to them about, negotiating with them about, I don't think this should be high up on the list.
So due to the risk of confusion and uncertainty and wasting of our political capital, I do not support us going any further down this path that this bill would lead us. Thank you, Mr. Speaker.
Thank you, Member for Yellowknife North. Colleagues, by the authority given to me as Speaker under Rule 2.2(4), I hereby authorize the House to sit beyond the daily hours of adjournment to consider the business of the House.
To the motion. Member from Inuvik Boot Lake.
Thank you, Mr. Speaker. Mr. Speaker, it's important to note that this is going to second reading. It's important to note that, you know, we have committees that do important work. I think, you know, in this case I think there's enough information required, no matter what your opinion is or what how if you think that, you know, the bill is appropriate, if you think that the existing system is working better, I know there are concerns. I have concerns whether or not how it's going to affect the mineral industry. The mineral industry right now, as my colleague has said, has based their operations on the existing large emitter program. Is the fed's system better than that; will that make a difference? I know there are pieces of the new bill that are addressing that but are they enough? So I think, in my opinion, given this is going to second reading, I support it going to second reading, I support it going to committee, I support getting more information on this, to hearing it out, and to allow the committee to do its work so when it comes to third reading I can make a decision that I feel is an informed decision and a right decision.
To the motion. Member from Frame Lake.
Thank you, Mr. Speaker. Mr. Speaker, certainly I appreciate the concerns raised by the Member for Yellowknife North. She spoke well to them and I think summarized well the concerns associated with moving forward with the bill as it is. Certainly the biggest one that I have is the uncertainty it could create. We certainly don't have certainty as to what would happen after the bill moves forward, and that is a concern that I share.
I also think the Member for Yellowknife North made it clear that we are not in a position to be repealing the carbon tax in the sense that citizens will not be paying carbon tax even if this bill moved forward. So we do need to be clear about that. And I think citizens need to understand that clearly, that we are not in the position to do that. This is a federal tax whether if the if the NWT repeals our tax, the federal tax will remain, and they will be taxed the same.
However, I do note that many issues with the existing act were raised the last time it was reviewed and not addressed when it was passed. So an opportunity for further investigation could lead to ideas for improvement that could either be applied to this act or to a subsequent one if this act were to be defeated. Furthermore, review of the bill by committee will allow for a fulsome investigation into its merits or the lack thereof.
So I want to be clear I am similar to the Member for Boot Lake. I am supportive of sending the bill to second reading for further investigation. I want to be clear that that is not necessarily an expression of support for the bill itself at this time. My hope is through investigation we can address uncertainties, possibly develop ideas as to how we can address the existing shortcomings of the current program and come forward with conclusive recommendations. So I am supportive of moving the bill to committee, investigating it. I think that we can come forward I hope that we can come forward with conclusive recommendations about it. And depending on the conclusions of the committee and my own personal conclusions which would stem from the investigation of the committee, I will make a decision on the bill at a later time. Thank you, Mr. Speaker.
Frame Lake. To the motion. Member from Yellowknife South.
Thank you, Mr. Speaker. Mr. Speaker, I want to start out I don't want any suspense in this, Mr. Speaker. On behalf of the Premier and Cabinet, we'll be abstaining on this motion, but I want to speak to some reasons for why or on this bill rather.
Mr. Speaker, committee reviewed the approach to carbon tax that was being proposed by the Government of the Northwest Territories back in the previous Assembly and the Assembly before that, so 2018, 2019, 2022, 2023, 2024. Three times this matter has gone to committee for review. It's gone out to the public. It's gone to stakeholders. It's gone to other levels of government. Mr. Speaker, if committee wants to do that again, we're not going to stand in their way. That is the purview of committee. And I do want to say very clearly that that's certainly we want to respect and demonstrate a respect for that choice but just keeping in mind that folks have had a chance to speak to the issues around carbon taxing, carbon pricing, and here we are yet again. And, Mr. Speaker, I would implore colleagues that we not lose time, energy, staff resources, and miss an opportunity to talk truly and meaningfully about energy alternatives, and to talk about how we're going to get the Northwest Territories off diesel, how we're going to turn ourselves into a place where there's green mining opportunities, where there was an opportunity to be part of a green economy value chain, and that we ensure that we're putting our time and efforts into those conversations which will make a difference in terms of GHG reductions which will make a difference in terms of cost of living and which will make a difference in what the future of the Northwest Territories might look like. But, Mr. Speaker, again I anticipate, and certainly based on some of the comments that we're hearing, this is likely to go back for review yet again. As such, I do want to set up some of what the concerns might be from the part of the Government of the Northwest Territories given that it is, of course, a system that does now sit with the GNWT to administer how this federal carbon tax is applied here. And, really, Mr. Speaker, it comes down to one of creating uncertainty and that with this current act, it is certain to create uncertainty.
Right now revenue that is paid tax revenue that is paid by residents and by businesses in the Northwest Territories comes to this House for its approval in terms of what happens to it. What those revenues what happens to those revenues, how they are expended by the Government of the Northwest Territories, gets approved here by way of the appropriations that are approved on the floor of the House. If revenues that are generated in the Northwest Territories go to Ottawa, they are approved through Ottawa. It might be, it might be, that after many years the federal government will come back and say don't worry that you were a little late to the party, Yukon and Nunavut signed up back in 20182019 to be part of having their own systems, others did not. And so when the last round of changes came out of Ottawa, other jurisdictions wound up under the federal backstop. Now, it might be that we're allowed to come in and create our own system. But at that point, Mr. Speaker, if we're going to create our own system and have our own manner of organizing what we do with these revenues and these funds, that's exactly what we do right now. So that's the best case but of course the worst case is that we have this backstop applied. And if the backstop does get applied, Mr. Speaker, our concern then of course becomes that we are subject to the political impacts that influence Ottawa which may not, and certainly in my experience are not, the same as the political impacts and desires of the people of the Northwest Territories. That focus comes here.
So, Mr. Speaker, we would certainly wind up in a situation where the large emitters program may be at risk. That's already been spoken to. It's a system that we've set up to reflect the realities of the mining industry here. It impacts the diamond mines, and it's going to certainly impact diamond mines that are heading towards reclamation and closure. They likely would no longer be able to get into the federal system. Those that remain, that go into the federal the base system, that changes where those revenues go because they're no longer going to be paying taxes. They're in a carbon pricing and trade system. Without that, the amount of revenue that's generated that goes into the fuel charge portion of carbon tax doesn't go back to residents. So the total amount they're withdrawing to pay back residents with carbon offset payments goes down.
Mr. Speaker, and what other gains then would there be? Well, again, this concern that residents aren't getting enough back. Residents on our expectation are getting enough back to ensure that they are getting, in general and on average, more than they're paying in carbon tax. This doesn't fix the cost of living in the Northwest Territories. We know the cost of living is high but, again, that's a different conversation, and it's one that we should spend time having.
And as for Mr. Speaker, so with that, I don't want to belabour the point any further again. I've made the point many, many times in this House. If it's revenue generated in the North, it should be revenue that stays in this House and we should be given the opportunity to deal with it. It gives us that opportunity it gives us that opportunity if we maintain the tax here. We give it back to Ottawa, whether they let us negotiate with them, whatever those negotiations might be or whether they simply oppose their backstop, we're handing back control over something.
Again, Mr. Speaker, I'm going to set up that conversation. We're going to be abstaining on behalf of Cabinet. If committee wants to go back and do this, certainly that is in their purview and they have that opportunity, and the department and the government will certainly participate in whatever way is available to us. Thank you
Thank you, Member for Yellowknife South. To the principle of the bill.
Question.
Question has been called. All those in oh, Member from Range Lake.
Thank you, Mr. Speaker. Mr. Speaker, my friend from Yellowknife Centre was just saying it's a shame the government is so pessimistic about our ability to successfully navigate the national fabric of relationships that allow us to be successful at leveraging funding to realize a future for the Northwest Territories. But I digress.
Mr. Speaker, this is a new government. This will be this is a new committee. These are new Members. And one thing I heard loud and clear on the campaign trail is that carbon tax, not just high cost of living, not high cost of groceries, not high cost of fuel of course, everyone feels the pinch but this specific policy was something that my constituents wanted reviewed. So when Members suggest that this is a waste of time and resources, I say anything we do for our constituents is never a waste of time. If our constituents want us to look at something and when we gave priority speeches in this Chamber, more people spoke of the need to deal with the carbon tax, many of them on that side of the House now, Mr. Speaker, than they did about the public inquiry or thirdparty review into a wildfire. That sounds like an important issue for this Assembly to tackle.
Mr. Speaker, I don't believe in zero risk. I've been very clear on the public record about that. Maybe we don't get our rebate system honoured. Maybe we have to deal with the federal backstop or maybe the Prime Minister will listen to the Premier's eloquent words about the need for an exemption and we won't pay carbon tax anymore. Maybe. But we don't know until we do something. And I got elected to do things.
Mr. Speaker, if we are stuck with a backstop, the concern that the revenues will be lost, well, 90 percent of those revenues will come back under the backstop. 10 percent will go to renewable energy programs. Right now zero percent of them go to renewable energy programs. The government funds AEA, the Arctic Energy Alliance. They fund these programs. But they don't specifically use the revenues to do that. It's not a revenue neutral system.
Mr. Speaker, I am sympathetic, of course, to the mining industry. We need to support them. But that industry continues to work in Nunavut and in Yukon even though they pay the full federal backstop and they use the OBPS system. So it doesn't it hasn't slowed down investment there. In fact, they have more exploration going on in both of those jurisdictions than we do in the Northwest Territories. So it can't be that bad. But we don't know if we don't take a risk.
Mr. Speaker, from now until 20272028, the carbon tax will raise $71 million in net revenue for the GNWT. $71 million. And that's not money that's going to go back to people in rebates. That's $71 million of general revenue for the GNWT. The federal system will not do that. All the money goes back to people or it goes back to hospitals, communities, businesses. So we have to ask yourself, how are we going to deal is that the right way to use that money? Should it be just going into general revenues, or should it be earmarked for projects? Should there be a commitment that every dollar raised not in a revolving fund I don't think we need to be that prescriptive but just say if we raise $71 million in net revenue, we're giving it all to the Arctic Energy Alliance for energy efficient programs or to the power corporation which currently spends 1 percent of its total infrastructure investments in renewables. One percent of our power corporation. So maybe the $71 million we are getting from carbon tax should go to the power corporation to invest in renewables and decarbonize our power system. These are important questions that we need to ask, and this bill is a vehicle to ask those questions.
I agree with my colleagues, it should be studied. It should be studied not just for the sake of good public policy decisions but because our constituents have asked us to look at it. They've asked us to study it, and we're here for them, Mr. Speaker. Mr. Speaker, why can't we do both? The minister has eloquently put that she has her reservations about this, and I respect what she's been through. The trauma of a carbon tax debate is not fun. I've been through it myself. And I don't I don't want to do it again but it must be had.
Now, we can do both though. We can study this bill. We can study the best system for the Northwest Territories, and we can invest in renewables. We can get our communities off diesel. We can do both. We can chew gum and walk at the same time, Mr. Speaker. I firmly believe that. And with that, Mr. Speaker, I will conclude the debate on this, but I will also call for a recorded vote and I look forward to my colleagues supporting this bill. Thank you.
