Dippers wrong in royalty row

The NDP's case for raising hardrock royalties is based on two claims. One is misleading. The other is incorrect. Claim one: The territory has never collected hardrock royalties since taking on the power to do so in 2003.

The NDP’s case for raising hardrock royalties is based on two claims.

One is misleading. The other is incorrect.

Claim one: The territory has never collected hardrock royalties since taking on the power to do so in 2003.

That’s misleading because it ignores the fact no hardrock mines have operated on public land up until last year, and these new mines haven’t begun to pay royalties.

Claim two: Selkirk First Nation cashed a $5.9-million royalty cheque last year, thanks to a more advantageous royalty agreement struck with Capstone Mining, which operates the Minto mine on the First Nation’s land.

RELATED:Read all of our election coverage.

It’s true that miners paid the First Nation that sum. But it’s incorrect to suggest this means Selkirk’s deal for Minto is better than what the territory has established with mines on Crown land.

In fact, that cheque was cut using the same profit-based formula that will be applied to Yukon’s mines on Crown land.

(Strictly speaking, the first claim is also incorrect, because the territory acted as a bagman in collecting these royalties on behalf of the First Nation. But that’s a bit of a quibble.)

In fairness to the New Democrats, Minto’s royalty rates were far from clear. Last week, conservationists, the chamber of mines and the territorial government all offered conflicting accounts of how the mine pays royalties.

That’s because Minto actually pays two royalty rates.

One is based on Yukon’s Quartz Mining Act, which uses a profit-based royalty formula. That led to the $5.9-million payout.

As a side deal, the Selkirk First Nation struck another royalty deal with the mine. This one is a variable rate, based on copper prices and the amount of metal smelted.

The size of these payouts has never been disclosed. But Claire Derome, president of the Yukon Chamber of Mines, reckons the last payment would have slightly exceeded $500,000.

The NDP has also criticized the territory’s practice of collecting just pennies for every ounce of placer gold. As a result, the government receives more revenue from campground fees than placer royalties.

But increased placer royalties would only result in another $1 million, or so, to be collected by the territory. That’s not a lot to fund some of the big spending commitments the NDP is making.

The real money is in hardrock royalties. Those rates are middling, compared to other Canadian jurisdictions. But, when you lump in corporate taxes, the government’s total take in the Yukon is already higher than elsewhere in Canada.

Yet conservationists contend Yukon’s profit-based royalties are easy to dodge, thanks to numerous tax breaks that allow mines to write-off capital costs, at least for the first few years of operation.

That’s why Yukon Zinc’s Wolverine and Alexco’s Bellekeno mines, which both opened last year, aren’t expected to pay royalties until 2013.

Miners contend that if you close these loopholes, some operations may never open at all.

Contact John Thompson at


Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Team Togo member Katie Moen sits in a sled behind a snowmobile for the ride from the airport to Chief Zzeh Gittlit School. (Haley Ritchie/Yukon News)
Coming together: How Old Crow became one of the first communities in the world to be fully vaccinated

Team Togo and Team Balto assembled with a mission to not waste a single dose of vaccine

Main Street in Whitehorse on May 4. If council moves forward with bylaw changes, eating and drinking establishments could set up pop-up patios in on-street parking spaces. (Stephanie Waddell/Yukon News)
Patios may be popping up in Whitehorse this summer

City considers program for downtown restaurants and bars

The Yukon Coroner's Service has confirmed the death of a skateboarder found injured on Hamilton Boulevard on May 2. Gabrielle Plonka/Yukon News
Whitehorse man dies in skateboarding accident

Coroner urges the use of helmets, protective gear, while skateboarding.

The new Yukon Liberal caucus poses for a photo during the swearing-in ceremony held on May 3. (Yukon Government/Submitted)
Liberal cabinet sworn in at legislature before house resumes on May 11

Newly elected MLA Jeremy Harper has been nominated as speaker.

The Yukon Wildlife Preserve’s baby bison, born April 22, mingles with the herd on April 29. (John Tonin/Yukon News)
Yukon Wildlife Preserves welcomes two bison calves

A bison calf was the first 2021 baby born at the Yukon Wildlife Preserve

A map provided by the Yukon government shows the location of unpermitted logging leading to a $2,500 fine. (Courtesy/Yukon government)
Man fined $2,500 for felling trees near Beaver Creek

The incident was investigated by natural resource officers and brought to court.

The site of the Old Crow solar project photographed on Feb. 20. The Vuntut Gwitchin solar project was planned for completion last summer, but delays related to the COVID-19 pandemic pushed it back. (Haley Ritchie/Yukon News)
Old Crow is switching to solar

The first phase of the community’s solar array is already generating power.

Chief Medical Officer of Health Dr. Brendan Hanley. (Crystal Schick/Yukon News file)
One new case of COVID-19 in the Yukon

Case number 82 is the territory’s only active case

Flood and fire risk and potential were discussed April 29. Yukoners were told to be prepared in the event of either a flood or a fire. Submitted Photo/B.C. Wildfire Service
Yukoners told to be prepared for floods and wildland fire season

Floods and fire personelle spoke to the current risks of both weather events in the coming months.

From left to right, Pascale Marceau and Eva Capozzola departed for Kluane National Park on April 12. The duo is the first all-woman expedition to summit Mt. Lucania. (Michael Schmidt/Icefield Discovery)
First all-woman team summits Mt. Lucania

“You have gifted us with a magical journey that we will forever treasure.”

Whitehorse City Hall (Yukon News file)
City news, briefly

Whitehorse goings-on for the week of April 26

The Yukon Department of Education in Whitehorse on Dec. 22, 2020. The department has announced new dates for the 2021/2022 school year. (John Hopkins-Hill/Yukon News file)
Yukon school dates set for 2021/22

The schedule shows classes starting on Aug. 23, 2021 for all Whitehorse schools and in some communities.

Most Read