A cyclist and vehicles approach the bridge in Riverdale in March 2014. (Ian Stewart/Yukon News)

Yukon government weighs in on Ottawa’s carbon tax plan

Territorial environment minister argues YG needs full control over revenue

The Yukon government wants to make sure it has control over how revenue from a federal carbon tax is given back to Yukoners.

In a letter to her federal counterpart, Yukon’s Environment Minister Pauline Frost says the territory should have control over money Ottawa collects from the new carbon tax. (See document embedded below.)

“Yukon expects that 100 per cent of the revenues collected will be returned directly to the Government of Yukon, so that the Government of Yukon can rebate those revenues to Yukoners,” Frost wrote.

June 30 was the final day for Canadians to provide comment on the federal government’s outline for its new carbon pricing system.

Any jurisdiction that does not have a carbon tax in place next year will have one implemented by Ottawa though what’s known as the “backstop.”

A federal technical paper doesn’t go into detail about how the tax would be implemented but outlines some basics of what the federal government is planning.

Frost notes that while “the technical paper indicates that Canada will return revenues collected through the backstop mechanism to the jurisdiction where the revenues were collected, but no further details are provided.”

She said she wants carbon pricing revenues returned to the Yukon government “in a timely manner.”

Ottawa has promised to study the way a carbon tax would impact the North. Yukon Premier Sandy Silver has said some “sector specific” exemptions may be on the table.

In her letter, Frost warns carbon pricing could hurt the competitiveness of industry in the North.

“Yukon therefore expects that carbon pricing will not place Yukon’s economic sectors, including the mining industry, at a competitive disadvantage within Canada or internationally.”

She also specifically mentions the aviation industry.

Frost tells federal Environment Minister Catherine McKenna that Ottawa’s plan should not include a tax on aviation fuel, at least not yet.

Ottawa has promised to look at how aviation fuel will be addressed as part of the federal carbon tax, she said.

“However it appears the paper suggests that a carbon levy would be applied to aviation fuel in backstop jurisdictions like Yukon before consultation is completed.”

Until the federal government comes up with a cross-Canada plan to deal with taxing aviation fuel, the Yukon should not be forced to implement one, Frost said.

“Yukon aviation industries should not be placed at a competitive disadvantage while discussions are still ongoing across Canada and industries in other jurisdictions are not paying a carbon levy on aviation fuel.”

Air North president Joe Sparling said B.C.’s existing carbon tax on fuel only applies on flights that take off and land within B.C.

If a flight takes off from B.C. but lands in Whitehorse there is no carbon tax on that fuel, he said.

Airlines are always going to want to buy fuel where it is cheapest and having different carbon tax rates could be a “logistical nightmare,” he said.

Sparling suggested Canada would be doing itself a disservice putting a carbon price on aviation fuel when that’s not consistent across the globe.

“Our concern is competitiveness. As a country we’re already frustrated when we see people driving across the border to catch airplanes and that’s obviously going to happen more if fuel is more expensive in Canada because of carbon tax.”

The Yukon’s official Opposition also submitted a comment to Ottawa.

The Yukon Party said in its submission to Ottawa that a carbon tax is not the best way to reduce the territory’s greenhouse gas emissions.

Instead of a tax, the focus should be on the development and expansion of renewable energy projects in Yukon, the party says.

“We recognize that the argument we’re making is not the one that the federal government wants to hear,” said MLA Brad Cathers. “But we’re attempting to concisely provide a reasoned argument in favour of an incentives-based approach to tackling greenhouse gas.”

Environment and Climate Change Canada says it received more than 200 submission on the technical paper from governments, businesses, organizations and members of the public.

Commenters weren’t required to provide their location so there’s no way to know how many submissions came from the Yukon.

It appears many Yukon groups have decided to provide their opinion to the territorial government instead of Ottawa.

The Klondike Placer Miners’ Association decided to focus its efforts on talking to the territorial government since “under the current regime they will be responsible for developing its (carbon tax implementation) details,” said executive director Jonas Smith in an email.

“As far as those discussions are concerned, our position has long been that one would be hard pressed to find an industry that is more interested in innovation, efficiency and reduction of consumption than the placer sector, as we already aggressively pursue any development or new technology to those ends,” he said. “However we fail to see how a carbon tax will achieve any of those goals, it will only increase our costs and reduce the amount we can reinvest in our communities.”

The Yukon Conservation Society also prepared comments for the territorial government.

In its position paper the society calculates that the average Yukoner stands to get back about $150 from a carbon tax rebate.

It suggests the Yukon government not return all of the carbon tax to Yukoners, the way the Liberals promised during the election, and instead direct some of the money “towards encouraging greater efficiency in carbon-emitting sectors.”

The paper includes suggestions like encouraging a shift towards plug-in electric vehicles.

Contact Ashley Joannou at ashleyj@yukon-news.com

Letter From Minister – Feedback on Technical Paper – Signed by Yukon News on Scribd

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