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Feds to study options for carbon tax in the North

Premier Sandy Silver said this week Ottawa will be looking at the impact of a carbon tax on the North and consider “sector-specific” concerns for the territories.

A carbon tax in the Yukon could look different than what is being proposed for provinces down south.

Premier Sandy Silver said this week Ottawa will be looking at the impact of a carbon tax on the North and consider “sector-specific” concerns for the territories.

However a spokesperson for federal environment minister Catherine McKenna has stated unequivocally that the federal government is not considering a full exemption.

“A complete exemption is not on the table,” press secretary Marie-Pascale Des Rosiers said May 25.

That appears to contradict unnamed sources quoted in other media outlets suggesting a full range of options are on the table, including no carbon tax at all.

Des Rosiers blamed misinterpretation or miscommunication in those stories for the contradiction.

In a statement McKenna said a study to “address the unique circumstances of the North” should be completed in the fall.

“In particular, we will discuss how a price on pollution will apply given the unique circumstances of the North; not whether a price on pollution will apply,” she said.

The statement mentions unique differences like the high costs of living and energy in the North.

“That work is ongoing and a decision on how a price on pollution will be applied in the North will be made following those discussions before a price on pollution comes into effect across Canada in 2018.”

Last week McKenna unveiled a technical paper outlining the federal government’s plans for a carbon tax. Ottawa will force it on provinces that haven’t come up with their own model by 2018.

The carbon tax will be collected partly through levies on fuel, the document says. The federal levy on gasoline starts at 2.33 cents per litre in 2018 and increases to 11.63 cents per litre in 2022. Dirtier fuels like heavy fuel oil will be taxed at a higher rate. Levies will also apply to other fuels like diesel, aviation gas and jet fuel.

Governments and Canadians have until the end of June to comment on the technical paper via the federal government’s website.

While there may be a better sense now of what’s not being offered to the territories, the picture of what carbon pricing in the Yukon could look like in 2018 is still murky.

Details of the federal government’s study are unclear.

“We have not received details yet as to how this study will be conducted but we will share information about the study when the federal government makes it available,” Yukon government spokesperson Sunny Patch said. “We don’t expect more from them until after June 30.”

Silver said it is important that a carbon tax be implemented in industries where carbon can actually be reduced.

“If you take a look at the placer (mining) industry, they can put solar arrays on their cabin if they’re running a diesel generator. That’s somewhere where you can change. If you’re a commuter in the communities you can buy a more energy efficient car. So those are areas where you could put a mechanism on. But if you’re running a D9 Cat what is your option? That’s what you need to run that industry,” he said.

He also hinted at potential consideration for the airline industry.

The official Opposition has accused Silver of changing his tune on the carbon tax. The premier has repeatedly insisted there would be no exemption for the North.

Silver told the legislative assembly May 24 that he’s always been referring to the lack of a blanket exemption.

“We fully expect to explore how flexibility and sector-specific solutions will apply to the north. However, no decisions have been made to this point. At no point was there an option for the Yukon to opt out of carbon pricing,” he said.

The Yukon Party has been vocally opposed to the idea of the Yukon paying a carbon tax at all.

Interim leader Stacey Hassard appears to have not given up hope that the territory may be excluded despite the comments from McKenna and her press secretary.

“I think there are options and I think that the premier needs to explore all options,” he said. “Just because someone tells you that the door is closed doesn’t necessarily mean you should just give up and go home.”

When asked whether he would be happy with anything short of a complete exemption, Hassard said he’ll “be happy with any exemptions that we get.”

“But the point is, we were elected to fight for Yukoners and the day that we stop fighting is the day that we should just go home.”

With files from Chris Windeyer

Contact Ashley Joannou at