A vehicle fuels up at Integra Tire gas station in Whitehorse on Jan. 24. Carbon tax came into effect July 1. (Crystal Schick/Yukon News file)

Carbon is now taxed in the Yukon

This means higher prices at the pumps, rebates and more

The Yukon now joins the rest of a Canada in a bid to cut down greenhouse gas emissions.

A federally designed carbon levy — spurred by reduction targets established during the Paris summit in 2015 — became effective on July 1. The “backstop” was a measure intended to ensure a base tax for carbon.

The federal government projects a decrease of 6.8 kilotonnes of emissions in the Yukon within the first year, Premier Sandy Silver said in January.

The study he was referencing says emissions are anticipated to drop by roughly 20 kilotonnes in 2020 and 32 kilotonnes in 2022.

Starting this week, each tonne of carbon will be taxed by $20. This number will climb annually by $10 until it hits $50 by 2022. The levy will plateau afterwards.

Critics of the system across the country have been wary of higher prices at the pump. Yukoners will pay 4.42 cents more per litre for gasoline, 5.37 cents for diesel and 3.10 cents for propane.

In 2022, residents are projected to pay an additional 11.05 cents per litre for gasoline, 13.41 cents for diesel and 7.74 cents for propane.

In the first year, it’s projected that the federal government will gather $7.8 million from the Yukon. This figure will have grown to $26 million by 2023, according to the Yukon government.

Residents

Every Yukoner who fills out a tax return will get a $43 cheque this October. A second cheque for the same amount will be sent out in April 2020.

The $86 rebate between October and April is $2 more than what the average Yukoner will spend on the carbon tax, according to the government.

Rebates would be issued four times per year starting in July 2020.

The total annual rebate for individuals living in Whitehorse will climb to $284 by 2023.

Residents outside of Whitehorse will receive a 10 per cent supplement, but that won’t start until the first full year of the program.

A family of four living in the communities would get a $1,249 rebate in 2023, according to the government. That’s $312.40 per person, including the supplement.

For comparison, the government estimates residents will pay an average of $187 in carbon tax that year.

Rebates would be issued by the Canada Revenue Agency and wired electronically or come in the mail as a cheque.

While individuals will be taxed the most, this will be offset by the rebate they receive, which is larger than other categories.

In total, by 2023, Yukoners would have paid roughly $7.6 million but get back $11.7 million, according to the government.

Businesses

Instead of receiving rebates four times annually like individuals, businesses will receive theirs as a refundable income tax credit at the end of the year.

In 2019, businesses would be taxed about $1.6 million; the rebate in this instance is roughly $1.9 million.

By 2023, when carbon pricing is at $50 per tonne of emissions, businesses would be taxed roughly $5.4 million. About $6.4 million would be rebated.

There are incentives from transitioning away from fossil fuels. For instance, $57.46 per $1,000 in assets will be tacked onto the rebate in 2023 (roughly $6.4 million) by way of a “Super Green Credit,” a program that awards businesses for investing in renewable energy sources – electric vehicles or solar panels, for example.

Federal exemptions for the Yukon include the aviation fuel and diesel-powered electricity in rural zones. National exemptions include commercial fishing and agriculture.

Quartz and placer mining

To ensure these industries remain competitive internationally, they will get 100 per cent of their carbon tax back.

Industry owners of these types are to submit receipts for purchases where the tax was applied.

Municipalities and First Nations

In 2019, First Nations would spend $40,000 on the tax, receiving double that as a rebate.

The rebates will be distributed to First Nations on Mar. 31, 2020, covering the preceding year.

Municipalities would be taxed $200,000 in 2019 and rebated $230,000.

Like First Nations, municipalities would receive their rebate, on April 1, 2020.

Subsequent payments will occur annually.

Contact Julien Gignac at julien.gignac@yukon-news.com

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