(Kevin O’Reilly is the MLA for Frame Lake.)
If you have any interest in the cost of living or the climate crisis, you should pay attention to Bill 61 that is before the Legislative Assembly now.
This bill will increase the carbon tax from $50 per tonne to $170 per tonne by 2030. This is part of the new federal plan to reduce its greenhouse gas emissions and reach net-zero emissions by 2050. GNWT cabinet’s current plan is for a 30 per cent reduction from 2005 emission levels by 2030 and it is failing to meet that target. The latest predictions are for a 10 per cent reduction in emissions by 2025 with little prospect of further reductions by 2030 at this rate.
To be clear, I support a carbon tax as part of a well thought-out plan to address the climate crisis. The minister of Finance recently presented cabinet’s plan for increasing the carbon tax, which is going to be a very hard sell. This approach is nothing less than an abdication of responsibility characterized by unfairness. Here’s why:
-The department revealed that there was “significant” consultation with the large emitters on this revised approach to carbon tax that will continue to provide large (72 per cent) rebates. In truth, they talked to diamond mines and perhaps Imperial Oil as the Norman Wells owner. No one else was consulted. This is nothing less than privileged access and regulatory capture, plain and simple.
-Large emitters will continue to get 72 per cent rebates while small businesses, community governments, and non-governmental organizations will get nothing but vague promises of programs to help them reduce energy use. The justification provided for this approach by the department was that these smaller entities could pass along their increased costs. I’m not sure this really applies to non-governmental organizations. It’s also not clear why the large emitters can’t pass along cost increases in diamonds or oil that they sell.
-An increase to the Cost of Living Offset (COLO) is proposed to help reduce the impact on individuals and families. It provides the same benefit to everyone, regardless of where you live or what kind of housing you are in (home ownership, rentals or public housing). Some people will actually make more money from this benefit than the increase to the cost of living from more carbon taxes. People in remote communities with the highest energy costs will be penalized.
-There is nothing in this bill or the current carbon tax legislation that requires any public reporting, transparency or accountability for the carbon taxes collected and use of that revenue, or to show any proof of the effectiveness of a carbon tax in reducing greenhouse gas emissions. The current discretionary reporting is not a whole-of-government priority and approach to the climate crisis. There is separate accounting and reporting for other things the GNWT does, including beverage containers, Marine Transportation Services, 9-1-1 services, and the Yellowknife Airport, but cabinet will not do this for the carbon tax. So how do we know it’s working?
-Regular MLAs have been asking for months for more information on the analysis, rational, modelling and more that went into cabinet’s approach with little to no response and virtually no public communications. Where is the promised robust public communications from the GNWT? Furthermore, the way the bill has been crafted, regular MLAs are unable to make any meaningful changes to it.
-Cabinet sought and received an exemption of methane emissions from carbon taxation that will only benefit Imperial Oil for flaring and fugitive emissions from their operations at Norman Wells. Methane is 80 times more damaging to our climate than carbon dioxide and will be taxed in other Canadian jurisdictions. How does this exemption help the NWT fight climate change?
Proposed solutions
OK, I’ve been critical of cabinet so far but what are the alternatives or solutions?
-Stop blaming the federal government and seize climate leadership. Start to promote a carbon tax as part of the necessary tools and NWT plan to deal with the climate crisis.
-Be creative and find ways to share carbon tax revenues with those that will be impacted, including Indigenous and community governments (which is what happens in Yukon, even under the federal backstop).
-Stop giving privileged access and treatment to the large emitters (the diamond mines and Norman Wells).
-Develop a more equitable approach to provide assistance and incentives for all businesses, non-governmental organizations, and community governments to encourage energy conservation and fuel switching to reduce greenhouse gas emissions.
-Make public reporting on the climate crisis mandatory, including carbon tax revenues and expenditures and investments in initiatives to reduce greenhouse gas emissions, NWT energy use and actual emissions as part of climate leadership.
-Set up a separate climate leadership or a revolving fund for retained carbon tax revenues that provides assistance for household, community and business energy self-reliance.
-Regionalize COLO (Cost-of-Living Offsets) payments based on the cost of energy and home ownership to make this a more equitable approach to the impacts of increased carbon taxes.
-Withdraw the current bill and work collaboratively on a better approach based on the above points.
I encourage NWT residents to get more information on cabinet’s approach to the carbon tax and the climate crisis. The latest proposed changes are under review by the Standing Committee on Government Operations and there will be opportunities for public input into the committee’s review of Bill 61.