N.W.T. will go into carbon pricing 'with eyes wide open' says Premier Bob McLeod

After signing a historic pan-Canadian climate change framework Friday, N.W.T.'s Premier Bob McLeod, who was once wary of the cost of a carbon tax, says there will be "no negative impacts"on the territory's economy.

However, the impacts of a carbon tax on the average N.W.T. resident, he says, still "remains to be seen."

McLeodrepeatedly said the territorywill be "working together" with the federal government, who he said has done a "tremendous job" on the historic climate deal, to find alternatives to diesel and implement renewable sources of energy in the territory.

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The premier sat with LorenMcGinnis, host of CBC North's The TrailBreaker, on Monday to debrief after signing the deal.

The following interview, including the questions, have been edited and condensed for clarity and length.

Q: What is the N.W.T. being asked to do in this deal?

Basically, we're asked to reduce our greenhouse gas emissions and sign onto a pan-Canadian framework for clean growth and climate change. That involves carbon pricing and also moving to reduce our greenhouse gas emissions and reduce our reliance on fossil fuels.

Q: I mentioned the wariness you've had. What did the federal government adapt or change specifically for the N.W.T. in this deal?

The federal government is recognizing that we are working ondeveloping a 10-year energy strategy and also developing a renewed greenhouse gas strategy. The fact that we're going around and consulting with people, we're holding roundtables across the North, which the federal government is also contributing [to].

We've also outlined our priorities, which includebecoming part of the national solution to helping to develop our hydro potential and also investing in infrastructure.

While at the same time, we will be assessing what the implications of carbon pricing will be on the cost of living, on how it will affect the people, our economy and our communities.

Q: What do we know then, about what the price of carbon will look like here in N.W.T.?

We know that at the national level, the price of carbon will increase by $10 a tonne, every year over fiveyears, to reach a maximum of $50 a tonne. Also that the federal government is requiring a carbon pricing model be implemented by 2018 or it will be forced on us.

We feel, and the federal government agrees, that by working together we will recognize the unique situation of the North and we will go into carbon pricing with our eyes wide open.

Q: So what will carbon pricing look like here in the N.W.T., do you expect?

There's a number of different ways. I expect that we will look at probably individual regions, and communities. We will see whetherthere are alternatives to diesel.

Right now, it appears there are very few alternatives. We know we can reduce our greenhouse gas emissions because as a government, we have already reduced our 2005 levels of emissions by 30 per cent and we've done that using a variety of renewable solutions and the federal government has agreed to use that avenue as well.

Q: So is that to say we will be exempted from the pricing, and the schedule that you outlined as the national plan the increase of $10 a tonne every year?

We tried to get that but the federal government has recognized that if they did it for us, they would have to do it for all of the provinces and territories. So we will be working together for the next two years to find a way to do our share and minimizing the impact on the cost of living.

Q: What impact do you expect this deal to have on N.W.T. residents at the gas station, the way we heat our homes and buildings, flights?

That remains to be seen. We're still going through our rounds of consultation.

I expect that [when] we implement carbon pricing, the revenues that we collect will be reinvested in the NWT.

Also as part of the framework, there will be no negative impact on our territorial formula financing.

Also we're very concerned about how it will affect our economies, but we're very much looking forward to clean growth that will be provided through this framework. And certainly the federal government has committed to investing in opportunities to increase energy efficiency and reduce greenhouse gas emissions.

Q: You've been wary of this in the past, specifically a price on carbon. Do you do this holding your nose or are you worried about the impact this will have on our economy?

No, I mean, actually I think the Prime Minister and [Environment] Minister Mckenna did a tremendous job. I think the fact that only two jurisdictions have not signed on have shown how much of an effort they put into it.

I think the worst case scenario for us is to impose the maximum carbon price without having any viable alternatives to diesel for both electrical generation and for heat. I think that would be the worst case scenario.

Q: Do you have a sense of what's on offer what projects the federal government might support or [is] going to help us fund to get off of diesel and off of other fossil fuels as well?

Right now, what we're looking at first of all of course is renewable solutions for off grid diesel communities. We have a lot of examples like Colville Lake and other places. There, we'll be looking at investing in wind, solar, and any other alternatives, of course hydro.

We'll be working together on finalizing a business plan and technical work on theTaltson Hydro expansion. And also looking at other infrastructure such as roads which will allow us to decrease the cost of living, and also have more options to get off diesel.

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Q: What do you think this means for the diamond mines?

I think with this agreement, as I said, it gives us a lot more options. I think the future for clean growth will also allow us to work with the diamond mines. So we can work, reduce our greenhouse gas emissions while continuing to have a viable economy through clean growth and also investing in climate change.