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The crux of the coming election? Carbon pricing

In case it wasn’t obvious already, the Yukon Party plans to make carbon pricing a big issue this coming territorial election.

In case it wasn’t obvious already, the Yukon Party plans to make carbon pricing a big issue this coming territorial election.

“A carbon tax isn’t common sense, and it doesn’t work for the northern way of life,” the premier declared on Wednesday, during his annual tradition of offering business leaders a sneak-peak at the coming territorial budget before legislators had a chance to hear the official version the following day.

“We will not raise the barriers to getting to and around Yukon. We will not make the cost of heating homes more expensive. And we are not going to punish our resource industries and place them in an uncompetitive position.

The North is not the South. It’s cold up here. And we don’t get on the subway to go to work.”

The premier also offered this warning: “Make no mistake. There will be voices that will come here to insist on a carbon tax. We’re the only party that has a made-in-Yukon solution that puts the focus on results, not ideology. We are not encumbered by being part of a federal political party.”

The budget speech itself hit the same notes, with an entire section dedicated to the evils of carbon taxes. “The NDP and Liberals both support a carbon tax,” the premier asserted. “They follow the line of their federal parties.” And, with what passes for a zinger in the Yukon legislature: “Proposing carbon taxes may make the Liberals and NDP feel warm at night. For the rest of us, it’s our furnace.”

Expect to hear similar comments by the premier throughout this sitting of the legislature and well into the election, which must be called by the autumn.

Putting the focus on carbon pricing could be a clever political strategy. It lets the Yukon Party fall back on its familiar portrayal of itself as defenders of the economy against their job-killing political foes, and it puts the Opposition into the awkward position of defending a policy that may have the virtue of being the right thing to do if you view climate change as a serious threat, but as a pocketbook issue plays to the Yukon Party’s advantage.

Focussing on carbon pricing may also help the governing party turn a weakness into a strength. Traditionally, the Yukon Party has bragged about how its tight relationship with the federal Conservatives has brought more money to the territory. With the new Liberal majority in Ottawa, this obviously no longer holds. So Pasloski has traded coziness for combativeness. Now he says the territory needs a leader willing to stand up for what’s right, rather than simply behave as local franchises of their federal counterparts.

Yukon’s opposition parties haven’t actually promised to introduce carbon pricing, but nor have they ruled it out, leaving themselves vulnerable to this accusation. Still, this is a bit rich, given how it’s not exactly a secret that

Pasloski has long been closely aligned with the federal Conservatives, for whom he once stood as a territorial candidate. And it just so happens that the premier’s trenchant opposition to carbon pricing mirrors the Conservative take on things. At least Pasloski has now taken the courtesy of having his own sound-bites prepared on the subject – in the past, he simply cribbed the same “job-killing carbon tax” epithet used by Stephen Harper.

Pasloski’s campaign against carbon pricing is also clearly trying to tap that rich vein of resentment felt by some Yukoners who fret that the territory is being wrecked by a bunch of out-of-touch busybodies from Outside, as opposed to his “made-in-Yukon” plan to keep doing what we’re already doing.

One strange thing about all this is that it still remains unclear whether the Yukon actually has any choice in the matter of whether to adopt a carbon-pricing scheme. Recall that the federal Liberals won a majority mandate to roll out such a plan across Canada.

Pasloski maintains that the territories have won an exemption, due to our already high costs of living. But all he has to show this is true is some vague wording in the latest agreement signed by the premiers, which may or may not actually serve as an escape hatch.

It would be highly inconvenient for Pasloski if he won re-election only to discover that Ottawa wanted him to introduce some carbon-pricing plan after all. Given how dependent the territory is on federal cash, we don’t exactly have a lot of bargaining power.

This wobbliness may give the Opposition a way of hitting back, by turning carbon pricing into a different sort of pocketbook issue: is our premier still able to bring home the bacon with federal Liberals in power, particularly when he is staging a big, albeit indirect, fight with them over their carbon pricing plans?

Pasloski is right that carbon pricing would make transportation and home heating more costly for many Yukoners. It would also make mining in what is already a remote region a more pricey prospect. But there’s a problem with his contention that the Yukon is such a tiny jurisdiction that we ought to get a free pass on curbing our carbon output. The same excuse, of course, could be made for an entire country like Canada, and many other countries have similarly novel explanations about why they deserve a break. This line of thinking is a big reason why curbing global carbon emissions has proven so difficult.

Just how big a strain a carbon pricing regime would put on Yukoners depends entirely on the details of the plan. British Columbia’s carbon tax comes with a rebate for rural and low-income households, to take the sting off higher fuel bills, for instance. Another feature of B.C.’s system is that it is revenue neutral – any additional money collected through the province’s carbon tax is offset by other tax cuts.

The Yukon could also consider a fee-and-dividend system, in which every penny paid in carbon taxes is returned to the pockets of taxpayers in an annual payment. Those who succeed in burning a lower-than-average amount of carbon effectively receive a cash bonus, creating an incentive for residents to further reduce their carbon footprints. You could even tailor this system so that each Yukon community had its own dividend amount, to help recognize that higher fuel consumption is hard to avoid in further flung areas.

Perhaps a steep carbon price would be crippling to the Yukon, but that needn’t be the case with a modest one. Yukon’s gas tax is currently far below British Columbia’s, and would remain so even if a carbon tax comparable to B.C.’s were tacked on. It’s also worth noting that the best time to put a price on carbon is when gas prices are low, as they are now.

Someone truly interested in “results, not ideology” would at least be willing to study what a carbon pricing system could look like in the Yukon, rather than dismiss the idea out of hand. After all, pretty much every energy economist will tell you that carbon pricing is the smart way to reduce emissions. But Pasloski doesn’t seem interested in doing that. He says Yukon’s emissions are irrelevant in the scheme of things, as a tiny fraction of what Canada produces, which is in turn a drop in the bucket of global carbon output.

In other words, the premier is campaigning on the notion that the Yukon, having long been a financial freeloader in Confederation, should take the same approach to the country’s efforts to curb the carbon emissions that are responsible for climate change.

Call it the northern way.