Highlights from the Canadian Carbon Pricing League

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The Canadian Carbon Pricing League’s new season is off to a roaring start.

At Game 4, in Ottawa last week, the players were all in fine mid-season form. Team Yukon put Darrell Pasloski on the ice for the first three games, in Ottawa and Vancouver for First Ministers meetings and for the home game in July at the Council of Federation in Whitehorse.

Due to a fan revolt, however, Pasloski has been benched for the rest of the season. Subbing in is new Premier Sandy Silver. He wasn’t a factor during his debut at Game 4. He didn’t manage to make the scoresheet with any specific announcements in the communique about special transitional funding arrangements for the North or special treatment for our export-oriented mining sector, which has to compete with countries without a carbon tax.

The latter will merely be studied, and will remain a question mark for mining companies thinking of investing in the Yukon. On the other hand, he didn’t embarrass the team either. He didn’t trip on the blue line and let some federal official rush up the wing and take out the previously existing commitment that carbon tax revenues will stay in the province or territory where they are generated.

The game’s first star was Premier Christie Clark of B.C. She made the highlight reels with a nice late-game deke, delaying the final press conference and photo opportunity until language had been inserted calling for a study of whether Ontario’s and Quebec’s cap-and-trade plan is really equivalent to B.C.’s existing carbon tax. In theory, cap and trade is a carbon pricing mechanism like a tax, but depending on the details, one province’s citizens and businesses could be making very different contributions.

Manitoba Premier Brian Pallister also made the scoresheet, after a confused scramble in front of the net where he kept bringing up health care funding whenever asked about climate change. His goal is being reviewed, and we won’t know for awhile if he successfully squeezed additional health care funding out of the Ottawa team.

Alberta Premier Rachel Notley scored a pair of goals, and actually netted them before the game even started. Two months before the match, she said that Alberta could not support the national plan unless pipelines were approved. Since then, Ottawa has approved the Trans Mountain and Line 3 pipelines. If she keeps her stick on the ice, she might score Keystone and Energy East too.

Silver will want to learn a few scoring tips from his fellow Western premiers.

Saskatchewan Premer Brad Wall was on the losing side. He picked up a five-minute major for refusing to sign the communique with the other premiers.

However, it’s an election year in Saskatchewan and the fans back home like a player who mixes it up with the big and powerful Ottawa team.

As for Silver, he tweeted a pre-game photo showing him practicing with his linemates from Yellowknife and Iqaluit. The McLeod-Taptuna-Silver line will have some nice scoring opportunities in future matches, since the rest of the country knows that the people of the North are heavily dependent on fossil fuels, imports and the resource sector.

They will be shooting for two things in particular. The first is additional funding. There is a long tradition of federal programs layering on extra funding for the territories, despite the fact we already get sizeable transfer payments.

There are several rationales for this in the case of carbon pricing. The first is that we import our food and supplies, and the makers and transporters of these things pay carbon taxes in the provinces. If a B.C. lumber mill ships a 2×4 to Whitehorse, the price paid by the Yukon buyer includes the mill’s carbon tax payments to B.C. on its fuel burned harvesting the wood, milling it and shipping it to the 60th parallel. That mill’s money goes to the B.C. government, not the Yukon government.

This is a good argument for asking the feds for some extra cash on top of returning what Yukoners pay.

Another rationale is financial hardship for citizens and businesses. Northerners, especially ones who live in off-grid communities, have fewer alternatives for things like heating and vehicle fuel. A Torontonian who doesn’t like carbon pricing can switch from oil heat to electric heat and pay 8.7 cents per kilowatt-hour off-peak. People in Tuktoyaktuk don’t have the same flexibility, since their electricity price is 29 cents per kilowatt-hour (and 61 cents after your first 1,000 kilowatt-hours), and there is only one option: diesel.

The second potential goal for the McLeod-Taptuna-Silver line will be an exemption for exported mining products. The communique mentions that the “competitiveness of emissions-intensive, trade-exposed sectors” will be studied. The outcome of this needs to be that Yukon mining companies get a rebate on carbon taxes paid on minerals they export from Canada.

The rationale on this is strong too, which is why Australia included exemptions for such industries in its carbon tax (before a newly elected right-of-centre government scrapped the whole thing). Since mining companies are “price takers,” meaning they can’t raise prices to pass on carbon tax costs to their customers, such taxes directly hit their profits. And since gold produced in Alaska is the same as gold produced in the Yukon, this risks the unwelcome phenomenon where industrial activity migrates from countries with carbon taxes to those without. Essentially, the same amount of gold gets produced as before with the same amount of global emissions harming the planet, but the carbon-taxing country loses the jobs.

The two-page summary on the Yukon that Silver contributed to the Pan-Canadian Framework agreement doesn’t even mention the mining industry, unlike the N.W.T. version. This is probably something Silver’s coach will put on the dressing-room whiteboard for the next match.

There is still plenty of time for our new player to rack up some points in the league. The communique mentions work continuing to 2022. Hopefully Silver and his Northern linemates can get extra federal financial support and a mining-industry exemption past the goalie soon.

Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. He won last year’s Ma Murray award for best columnist.