Yk MLAs and environmentalists are debating what to do with money collected from a carbon tax. 

By the start of 2018, the territorial government needs to have a carbon price mechanism in place, otherwise the federal government will step in to administer it. As part of an effort to gather feedback from residents, the GNWT has opened an online survey and released a discussion paper outlining what a carbon tax could look like in the territory.

The paper outlines different ways to use the estimated $12.6 million the carbon tax is expected to generate in its first year. The first option is straightforward SA国际影视传媒� use the tax to fund regular government programs and services. The second is to recycle the money back into the territory, either through tax credits and rebates, projects to reduce greenhouse gases, or by exempting fuels.

Tax credits and rebates

The paper proposes several tax credit and rebate options including a direct rebate on heating fuel, an individual tax credit or an increase to existing tax credits such as the Cost of Living Tax Credit or the NWT Child Benefit rate.

Kam Lake MLA Kieron Testart said he wants to see what comes out of public consultations, but said tax credits could be a good way to put money back into the pockets of people, especially those with low incomes and those whose traditional activities would be impacted by a carbon tax.

The paper proposes a rebate based on location to support remote communities that will be heavily impacted by the tax, and are also heavily dependent on fossil fuels.

Craig Scott, executive director of Ecology North, said remote communities need to be looked at as a separate issue, as 16 per cent of NWT residents are in social housing and have their energy costs paid for.

SA国际影视传媒淭he groups that are going to need help are going to be private businesses in small communities,SA国际影视传媒� he said. SA国际影视传媒淭hey are going burdened by this cost and they're going to need some support. And people who aren't living in subsidized housing in remote communities.SA国际影视传媒�

According to the paper, personal income tax rates could be reduced. Yet the discussion paper states this could be complicated as tax rates need to be changed through legislation. The GNWT could also come up short if carbon tax revenues are less than the revenue they receive from reduced income taxes.

Projects to reduce greenhouse gases

The money could also be recycled into projects to reduce industrial carbon emissions, household emissions or create renewable energy infrastructure.

Frame Lake MLA Kevin O'Reilly said expanding programs run by the Arctic Energy Alliance would help households transition away from fossil fuels.

SA国际影视传媒淭he best way to get homes off of carbon intensive energy is to help design programs for energy conservation retrofits, and those are the sort of programs that Arctic Energy Alliance already delivers and we need to enhance those programs to make them more accessible to people on lower incomes,SA国际影视传媒� he said.

Louie Azzolini, executive director of the Arctic Energy Alliance, said the money could go toward financing existing programs that help households fine-tune their energy use or transition from diesel to wood home heating.

One of the main barriers Azzolini sees is the lack of a business sector able to support the changes households or community governments want to make.

SA国际影视传媒淗aving an active business sector, whose self-interest is serving the public, so that the public can adopt these renewables and energy efficiency incentives, helps to make it happen,SA国际影视传媒� he said.

Exempting Fuels

Another option on the table is to exempt aviation, railway or marine fuel from the tax.

The federal government has imposed a carbon tax, but individual provinces and territories can decide how comprehensive the tax should be. In order to keep costs down, the government could choose to exempt certain fuels, which would bring in less money and have less of an effect on carbon emissions, but it would also be less of a burden to households and businesses.

Craig Scott with Ecology North said his organization is against this option.

SA国际影视传媒淭he whole point of this is to reduce greenhouse gases so when you make exceptions those fuels, they still burn greenhouse gases and they cause a lot of negative impacts that we're seeing in NWT,SA国际影视传媒� he said.

A mixed bag?

Stephen Verhaeghe, manager of fiscal policy and intergovernmental relations at the Department of Finance, said the NWT could end up with a mix of revenue recycling alternatives.

SA国际影视传媒淲e just wanted to inform the public what our thinking is and weSA国际影视传媒檙e trying to gather the publicSA国际影视传媒檚 feedback through our consultation,SA国际影视传媒� he said.

Experts have already weighed in on what the preferred mix would be for the territory.

A 2011 study done by M K Jaccard and Associates for the GNWT proposed the model B.C. currently uses, where one-third of the revenue goes to corporate tax reductions and two-thirds to personal income tax reductions. Ecology North would like to see 50 per cent go to tax cuts and rebates, just under 50 per cent to investments in energy efficiency and green energy and a small percentage to administer the tax.

Yellowknife North MLA Cory Vanthuyne said a portion of the revenue needs to go to a government fund to deal with the harms of climate change. He added another portion could go to neutralizing the burden of the tax, for example through income tax reductions, and a third portion could support industry, government and homeowners to get off of fossil fuels.

O'Reilly said he expects to see a mix of increases to tax credits and programs for households and industry to transition away from fossil fuels.

Residents can have their say on how they want the revenue returned by filling out an online survey on the Department of Infrastructure website. After the survey closes Sept. 15, the GWNT will present a proposal for consideration and discussion in the fall legislative assembly.