Mining association says Canada needs a carbon price

The organization that represents Canada's mining industry has announced it supports a price on carbon across all sectors of the Canadian economy.

The organization that represents Canada’s mining industry has announced it supports a price on carbon across all sectors of the Canadian economy.

The Mining Association of Canada says revenue from a carbon-pricing scheme should be used in part to support low-carbon technology.

“The current government has been elected on a mandate to put a price on carbon, and we see value in engaging as a constructive partner,” said Brendan Marshall, the association’s senior director of economic affairs.

Marshall pointed out that British Columbia, Alberta and Quebec already have some form of carbon pricing, and Ontario has recently unveiled its own cap-and-trade regime.

“The reality is the majority of metal and non-metal mines in Canada are already operating in a region where there is a price on carbon or where there’s a commitment to establish one,” he said.

Marshall said that carbon pricing is better than other forms of regulation, because it allows companies to decide how and where to cut emissions.

The organization’s announcement raises questions about Yukon Premier Darrell Pasloski’s opposition to a carbon tax in a jurisdiction heavily dependent on mining.

Pasloski has made much in recent weeks about how a carbon tax won’t work for the Yukon.

“A carbon tax would force our families and our businesses to pay more,” he said during last week’s budget speech. “And it would put our economy at a disadvantage.”

But Pasloski hasn’t said what he would do if the federal government insists on a national carbon price. Prime Minister Justin Trudeau and the premiers have agreed to work toward a carbon-pricing mechanism, but there are few details on what exactly that means.

“We are going to oppose it – use what means that we can,” Pasloski told the News last week. But he added that he doesn’t know “what all the levers are that the federal government has.”

Marshall said he understands that the North “is not on an equal footing” when it comes to the cost of doing business and dependence on fossil fuels. Western Copper & Gold (owner of the Casino project) and Victoria Gold are both members of the association.

He said there’s room for special considerations, but didn’t say the North should be exempt from carbon pricing.

Chris Ragan, chair of Canada’s Ecofiscal Commission, also criticized the idea of an exemption for the Yukon. The commission is a think-tank dedicated to carbon-price analysis, whose advisory board includes Reform Party founder Preston Manning, former prime minister Paul Martin and Suncor CEO Steve Williams.

“The only good argument for not doing a carbon price is that you don’t care about the problem,” he said. “I think it’s pretty clear that the most cost-effective way to reduce greenhouse-gas emissions is a carbon price.”

Ragan challenged Pasloski’s claim that a carbon tax would raise the cost of living and have a disproportionate impact on low-income families.

Earlier this month, the commission released a report outlining different options for using revenue from a carbon tax.

If the government’s biggest concern is the financial impact on residents, Ragan said, that can be minimized through income tax cuts or direct cash transfers to households.

“If I now give back the revenue to all households, I’ve increased the prices, but I’ve also increased their income,” he said.

But Ragan acknowledged that a carbon tax would increase the price of goods and services. That’s its purpose, he explained.

“To complain about the policy because it increases prices is to kind of miss the point.”

It’s worth noting that Yukoners pay substantially less tax than residents of any other jurisdiction for transport fuel, though the ground transportation sector was responsible for 64 per cent of Yukon’s greenhouse-gas emissions in 2010.

Yukon’s gas tax is 6.20 cents per litre, far lower than anywhere else in Canada. The other territories pay 10.70 cents per litre, and the provinces all pay more than that. The Canadian average is 14.25 cents per litre.

British Columbia has a gas tax of 21.17 cents per litre, the highest in Canada. Of that total, the province’s carbon tax accounts for 6.67 cents per litre.

If that same rate were applied in the Yukon, the territory’s gas tax would increase to 12.87 cents per litre – still lower than the national average.

Still, Pasloski maintains that a carbon tax doesn’t make sense in the Yukon, since the territory accounts for less than one per cent of Canada’s emissions.

“We’re dealing in reality and not in just strictly ideology,” he said.

Meanwhile, both the NDP and Liberal leaders seem to be favouring a carbon price, though they’re vague on the details.

“I think there’s a real opportunity here to put some pricing on carbon emissions,” NDP Leader Liz Hanson told the News last week. But she said the tax could target industry instead of individuals. She also stressed the importance of reducing subsidies to fossil fuels.

Liberal Leader Sandy Silver said he has “no fear about putting a price on carbon,” but it would have to be revenue-neutral.

That’s a shift from a year ago, when he said the Yukon Liberals didn’t support a carbon tax.

“We need to be responsible,” he recently told the News. “And we need to be on the right side of this issue.”

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