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

Calgary Herald - - CANADA - Maura For­rest mfor­[email protected]­

• 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 on the hori­zon 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.

He said he’s sym­pa­thetic to the con­cerns of provin­cial govern­ments in Al­berta and Saskatchewan, which have been press­ing the fed­eral govern­ment to sup­port the oil and gas in­dus­try in the face of a pun­ish­ing oil price dif­fer­en­tial. “I think that, fi­nally, the rest of Canada is rec­og­niz­ing that the oil and gas in­dus­try is im­por­tant to Canada,” he said.

The pre­mier plugged the idea of an oil pipe­line from Al­berta through the Macken­zie Val­ley to the Arc­tic Ocean, given the prob­lems fac­ing the Trans Moun­tain and Key­stone XL pipe­lines and the death of the En­ergy East project last year. “We feel that we should be look­ing at other mar­kets and other trans­porta­tion cor­ri­dors,” he said. “If we can’t go east, south or west, why can’t we go north?”

For now, though, the ter­ri­tory is ready­ing it­self for a car­bon price that will come into ef­fect in July 2019. Un­like the Yukon and Nu­navut, which have ac­cepted the fed­eral car­bon tax back­stop, the North­west Ter­ri­to­ries has de­cided to cre­ate its own car- bon tax, which McLeod said will be bet­ter for north­ern­ers than the fed­eral plan. The ter­ri­to­ries have been given some ex­emp­tions, in recog­ni­tion of the high cost of liv­ing in the North, in­clud­ing a full ex­emp­tion for avi­a­tion fuel and diesel-fired elec­tric­ity gen­er­a­tion.

But McLeod said if the fed­eral govern­ment wants to fo­cus on clean growth, it needs to work with the North­west Ter­ri­to­ries on a strat­egy. “Per­haps we could get the fed­eral govern­ment to in­vest so that ev­ery com­mu­nity can put in so­lar pan­els, wind farms, what have you. And retro­fit peo­ple’s houses and so on,” he said. “I think any­thing’s pos­si­ble.”



North­west Ter­ri­to­ries Pre­mier Bob McLeod spoke with the Post of his hopes for a re­vival of the Macken­zie Val­ley pipe­line project that would bring oil from Al­berta to the Arc­tic Ocean, a plan first pro­posed in the 1970s but no longer seen as vi­able.


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