Remote communities will be most affected by a carbon tax that could cost households $923 per year, according to a GNWT report.
Lisa Nitsiza, chief administrative officer of Whati, a small North Slave community with under 500 residents, said the carbon tax would likely hit the community hardest if the price of flights increases.
“The chief has been saying that the average household cannot afford a trip into Yellowknife for two,” she said, adding that for a family of four the price is close to $1600 round trip.
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 there are 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.
“There has to be some support for low income and remote communities because they have less opportunity to change their behaviour,” said Craig Scott, executive director for Ecology North, who has been an advocate for a carbon tax in the territory for several years.
The tax is expected to generate $12.6 million in its first year, and $63 million per year in 2022, according to the paper.
The discussion paper 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.
Nitsiza said the promotion of energy alternatives in homes, moving to pellet stoves from oil burning furnaces, would be the most beneficial for her community. In Whati she knows of two households with pellet stoves and the local government recently installed a biomass heating system.
More information is what's needed for community members to adopt this technology, she said. “For the pellet stove you do need electricity, would that affect your electricity bill?” Nitsiza asked.
Scott said the right mix would be putting 50 per cent of the tax revenue into programs that reduce greenhouse gases, such as household energy retrofits, pellet heating systems or renewable energy, and 50 per cent into tax rebates to help remote communities and low income households adjust to the tax. In the long run, the innovations will reduce energy costs.
“It seems like a lot of money,” he said of the initial reaction residents may have. “In the long run, if people take advantage of those programs and invest that money they get back into those energy programs, everyone who does that is going to be further ahead. Because you're not going to be paying into the carbon tax anymore and you're not going to have the high energy costs that we currently do.”
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. At the time he said 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. Letters have also been sent out to all indigenous governments in the territory asking for their input, communications coordinator at the Department of Finance Todd Sasaki said. He added residents who do not have access to the internet can ask government service officers for assistance if they want to provide feedback on the tax.
The Minister of Finance was not available for an interview with with News/North as of press time.