North

N.W.T. releases first carbon tax estimates, asks public for input

With carbon pricing coming to the territory in 2018, the government has released a discussion paper laying out what a tax could cost N.W.T. residents.

Carbon tax could cost average household nearly $950 annually in 5 years, with 85% returned by gov't

A solar array in Colville Lake. Community projects such as this will become critical to reduce reliance on diesel fuel as a carbon tax is implemented, though former territorial minister Michael Miltenberger is disappointed at the lack of a plan in the GNWT's latest dicussion paper. (Kate Kyle/CBC)

Northwest Territories residents are going to pay to protect the environment. But the question is, how much?

The territorial government has released a discussion paper and survey, seeking input from residents on carbon pricing. The territory committed to putting a price on carbon after agreeing to the federal government's Pan-Canadian Framework on Clean Growth and Climate Change in December 2016.

The territorial government can decide to follow the federal government's pricing — $10 per tonne of greenhouse emissions in 2018, increasing $10 per tonne each year until it reaches $50 per tonne, in 2022, or implement its own system.

Former finance minister Michael Miltenberger said it's important not to use the federal pricing.

"We can make the right decisions — good decisions — for a well-run territory, and we can handle this issue far better than it will ever be dealt with by officials in Ottawa on our behalf," he said.

There are multiple options for a carbon pricing system, but the territorial government is suggesting a carbon tax.

"What a carbon tax can do, if it's created properly, is it's going to change the economics of energy policy," said Craig Scott, executive director of Ecology North. 

"It's going to make communities more resilient and able to spend that money that they spend on diesel fuel on other things."

Average household could pay $923 per year in 2022

Using the federal government's pricing model, the discussion paper estimates that in five years, the average household will pay $923 in total carbon tax, based on current consumption levels.

At present levels, that would equate to $12.6 million in tax revenues in 2018, and $63 million in 2022.

According to the discussion paper, the government intends to return most of the tax collected — about 85 per cent — to the economy through rebates and other programs, in order to attempt to minimize the impact on the cost of living.

The paper also points out potential issues with a carbon tax. Lower-income residents and those in small, remote communities are likely to feel the most impact, and though some of the burden may be lifted by recycling the revenues back into the communities, the paper says it is "impossible" to design a system that perfectly matches the burden.

The paper also notes that communities that rely on diesel fuel will be disproportionately impacted, something Scott says needs to be addressed by the government.

"There's a group of people in remote communities who don't have the same options to get off diesel fuel," he said. "You have to provide them with some kind of support to offset the impact."

Miltenberger said the discussion paper is too focused on avoiding the carbon tax, instead of looking at ways to reduce consumption.

"There's no real clear talk of how do you get people off of fossil fuels," he said. "The talk is all about how do you minimize the tax that you have to pay."

The survey is currently open to the public.

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