Despite its ‘red alert,’ N.W.T. won’t defy carbon tax plan

OTTAWA • As a growing number of provinces band together to fight the federal carbon tax, Northwest Territories Premier Bob McLeod says that while he doesn’t support a carbon price, he won’t be jumping into the fray.

“Our position is we were against it at the start,” he told the Post in a recent interview from Toronto. McLeod said he was concerned that there were “no sustainable alternatives” to fossil fuels in the North, and that a carbon price would therefore be “strictly a tax” that would not actually modify behaviour. Still, where several provinces have opted to fight the carbon tax in court — including Ontario, Saskatchewan and New Brunswick — McLeod has chosen to go along with the federal plan after lobbying for some exemptions for the North. His government unveiled details of its own carbon tax in July. “We’ve already looked at the situation, so we’re not planning to flip-flop back and forth to say we’re on or off,” McLeod said. “We’ve already made our decision and are moving forward.”

His finance minister, Robert McLeod, has said the territory doesn’t want to risk defying the federal plan only to have Ottawa impose its own tax.

But the premier says the Northwest Territories, with a population of about 45,000 people, needs help to transform an economy that has traditionally depended on resource development. A year ago, McLeod issued a “red alert” regarding the future of the territory, claiming that southern Canadians wanted the North to effectively become a “large park.” The announcement came a year after Prime Minister Justin Trudeau’s decision to place a five-year moratorium on offshore oil-and-gas development in the Arctic, which McLeod called “but one example of our economic self-determination being thwarted by Ottawa.” Since then, McLeod said, he feels the federal government has paid more attention to the territory’s needs, but only to a point. “I think that we still have concerns,” he said. “I think there’s still an attitude that we should be restricting our activities.” The Arctic drilling ban isn’t the only source of McLeod’s resource woes. Last May, the Conference Board of Canada reported that the future of the territory’s economy is “grim,” largely because its three diamond mines have reached peak production and are all slated to close between 2025 and 2034. Other mining projects aren’t expected to fill the gap, and the population will likely keep declining. The Mackenzie Valley pipeline project, first proposed in the 1970s and resurrected in 2004, fell apart last December after Imperial Oil announced that high costs and other sources of cheaper North American gas meant the project was no longer viable. All of that, McLeod said, adds up to “$22 billion worth of potential investment” that hasn’t materialized.