Despite its ‘red alert,’ N.W.T. won’t defy carbon tax plan
• 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.”
IF WE CAN’T GO EAST, SOUTH OR WEST, WHY CAN’T WE GO NORTH?
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.