Carbon tax could cost $900 per household
'People deserve a broader discussion,' says MLA on implementation plans
Emelie Peacock
Northern News Services
Friday, August 4, 2017
SOMBA K'E/YELLOWKNIFE
Yellowknife North MLA Cory Vanthuyne says the government has jumped the gun on public consultations for a territorial carbon tax that could cost households $923 per year.
Premier Bob McLeod, left, at attends the July 2016 premier's meeting in Whitehorse. Beside McLeod is Alberta Premier Rachel Notley and PEI Premier Wade MacLauchlan. Just before that conference, McLeod joined Nunavut Premier Peter Taptuna and former Yukon Premier Darrell Pasloski to issue a united stance against a carbon tax. - photo courtesy of the Council of the Federation
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On July 26, the GNWT opened a survey and released a discussion paper about the implementation of carbon pricing in the NWT. The paper, Implementing Pan-Canadian Carbon Pricing in the Northwest Territories, outlines how a carbon tax would be administered, how much it would cost and what options are there for putting revenues from the tax back into the territory.
According to the document, the average household could pay $168 to $185 in direct taxes on carbon producing fuels and indirect taxes included in the prices of goods and services in 2018. By 2022, this cost could rise to $923 per household per year as the price of carbon rises. The paper states the tax will affect people in remote communities and low income people the most.
The tax is expected to generate $12.6 million in its first year, and $63 million per year in 2022, according to the paper.
It outlines two main options for using this tax - fund regular government programs and services or recycle revenue to make the tax revenue neutral. A number of options to 'recycle' revenue from the tax are outlined in the discussion paper, some of which could help households. These include removing transportation fuels from the tax, giving tax breaks to consumers such as a rebate on heating fuel, or funding infrastructure projects aimed at reducing fossil fuel use.
MLAs react
Vanthuyne said talking about the details of a carbon tax is premature as there has yet to be a discussion on the options for carbon pricing in the legislative assembly.
He pointed to the possibility of a cap-and-trade system - a marketplace for carbon where industry trades in carbon credits - and the option of having the federal government administer carbon pricing rather than the GNWT.
Options to return revenues from a territorial carbon tax
- Exempt certain fuels i.e. aviation, railway diesel or marine transport
- Provide income tax credits or rebates
- Revise existing tax rates
- Create direct rebates for tax paid on fuel used for specific purposes i.e. heating
- Direct support for emissions reduction for households and industry
- Fund infrastructure projects to reduce use of fossil fuels
Source: Implementing Pan-Canadian Carbon Pricing in the Northwest Territories
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Vanthuyne added two guiding documents currently in draft form - an energy plan and a climate-change strategic framework - are needed to start a broader conversation around the topic.
"It's like trying to have a conversation, but only half of the information is there," he said. "We haven't had a really good, open, public discussion about climate change, at least not in the 18th assembly, so people don't know what to make of a carbon tax."
Todd Sasaki, communication officer with the department, said the carbon tax is the simplest way to implement carbon pricing in the territory.
"By contrast, a cap-and-trade would be much more complicated, particularly given the size of our economy," he said, adding the discussion paper provides more informatino about the cap-and-trade system.
He said the government encourages people to give feedback on the possibility of using a cap-and-trade system in the survey.
Kam Lake MLA Kieron Testart said he understands why people might be taken aback by the tax but sees it as a way to raise money for energy infrastructure improvements.
"The highest costs we pay in the North are largely attributed to fuel and energy costs so it's no surprise that adding an extra tax on top of that, on the face value, comes with a great deal of sticker shock," he said.
In July of last year, Premier Bob McLeod united with Nunavut Premier Peter Taptuna and former Yukon Premier Darrell Pasloski in publicly opposing a carbon tax because cost of living in the North is already so high. He told Yellowknifer at the time there were ways to reduce greenhouse gas emissions other than a tax and any revenue would need to be used to help Northerners adapt to the burden.
In December, the GNWT signed an agreement with the federal government committing to implementing a carbon pricing system. To fulfill this commitment, territorial leaders need to create legislation by February 2018.
A public survey on the Department of Finance website about the carbon tax had 251 responses as of press time. It will be open until Sept. 15.
The Minister of Finance was not available for an interview with Yellowknifer as of press time.
