Yukon government insists territory can still win exemption from carbon pricing

The Yukon government insists the hammer hasn’t dropped on a carbon price for the North, despite Prime Minister Justin Trudeau’s announcement on Monday that all Canadian jurisdictions will have a carbon price of at least $10 per tonne by 2018, rising to $50 per tonne in 2022.


The Yukon government insists the hammer hasn’t dropped on a carbon price for the North, despite Prime Minister Justin Trudeau’s announcement on Monday that all Canadian jurisdictions will have a carbon price of at least $10 per tonne by 2018, rising to $50 per tonne in 2022.

Community Services Minister Currie Dixon was meeting in Montreal with provincial and territorial environment ministers and with federal Environment Minister Catherine McKenna as Trudeau made the announcement in the House of Commons on Monday morning.

“Nobody saw it coming,” he said. “It was a total surprise to all the provinces and territories.”

But Dixon said there’s still a chance the Yukon could be exempted from a carbon tax. The purpose of the Montreal meeting was to work out a recommendation on carbon pricing for the next first ministers’ meeting, which will likely be held in December.

Dixon said he and the other territorial representatives got the provincial ministers to agree to language that recognizes “the unique circumstances of the North.”

That part of the recommendation reads “while carbon pricing can be an effective tool for reducing emissions, unique territorial circumstances … mean that a range of different policy options for reducing emissions must be available for the territories.”

Dixon insists that language, which McKenna agreed to, is tantamount to a request for an exemption.

“I’m interpreting it that there will be a different range of policy options for the territories, rather than a carbon price,” he said.

The News asked the federal government whether a full exemption is possible for the Yukon. In response, a spokesperson for Environment and Climate Change Canada said only that “First ministers committed to consider the specific circumstances of the North. We are working with the territorial governments to address these important issues.”

But the uncertainty allows the Yukon Party to continue to claim that it’s the only party willing to “stand up for Yukoners” against a carbon tax, as Dixon put it on Tuesday. He wouldn’t say whether the Yukon could actually fight the federal government if it decides not to grant an exemption.

“We see the North as being different and we think that the federal government acknowledges that as well,” he said.

Still, Trudeau’s announcement on Monday clearly included the North.

“Provinces and territories will have a choice in how they implement this pricing,” he said. “They can put a direct price on carbon pollution or they can adopt a cap-and-trade system.”

He said the carbon price will be revenue-neutral, with the money collected staying in each jurisdiction. Ottawa will implement a price in any jurisdiction that does not have one of its own by 2018.

Trudeau said the carbon price “will assist Canada in achieving its goals for greenhouse-gas emission reductions.”

In Paris last December, Canada committed to cutting emissions by at least 30 per cent below 2005 levels by 2030, a target set by the former Harper government.

The territory’s opposition leaders were all but saying “I told you so” after the announcement on Monday morning. Both NDP Leader Liz Hanson and Liberal Leader Sandy Silver have been insisting that the federal government will impose a carbon price across the country.

“Our premier was at a meeting where this was signalled in the spring, so it should not be a surprise,” Hanson said, referring to the Vancouver Declaration on climate change signed by all Canadian premiers in March.

“It’s time for the Yukon Party to reconsider its ideological stance on this and to try to be using this as an opportunity.”

She said the NDP would like to see half the revenue from a carbon price used to create a new refundable tax credit, so that low- and middle-income families would receive more on average than they pay in carbon tax.

She said the other half should be used to fund renewable energy projects, with additional support from the federal government.

Hanson wouldn’t say whether the NDP would consider implementing a carbon price that is higher than the minimum announced by Trudeau.

“It sounds to me like he’s chosen a base that makes it relatively easy for everyone to buy in,” she said. “Whether or not Yukon needs to do more than that, I think that’s up to a) the analysis and b) the conversation with Yukon citizens.”

For his part, Silver was adamant that the Yukon Liberals would not impose a carbon tax of their own if elected.

“This is not our tax,” he said. “We’re not implementing a carbon tax, nor would we.”

A Liberal government would wait for Ottawa to impose the price in 2018 and would not increase the tax above the federal minimum, he said.

He said he would make sure that the money collected “goes directly into Yukoners’ pockets,” but wouldn’t say exactly what form that refund would take.

Liberal candidate John Streicker said his party would take other steps to cut emissions in the territory, including retrofitting buildings to make them more energy-efficient and developing local agriculture.

“One of the best ways to (reduce emissions from transportation) is to develop a local economy which isn’t so dependent on bringing goods and services in,” he said.

Interim Green Party Leader Frank de Jong said he would set Yukon’s carbon tax at $30 per tonne in 2017, and would increase it by $10 a year up to $100 per tonne. He said it would be made revenue-neutral through income tax cuts or monthly direct deposits to all Yukoners.

However, any Yukon government that wants to implement its own carbon tax will first have to contend with the Taxpayer Protection Act, which dictates that any new tax must be put to a referendum.

That legislation was passed by the Yukon Party under John Ostashek, premier from 1992 to 1996.

But Hanson suggested it may not be reasonable to allow a former government to tie the hands of all future legislators with that kind of requirement.

“They passed it with the view that they could bind all governments from raising taxes in the future,” she said. “I think that 22 years later, is it time for a conversation? I don’t know.”

Contact Maura Forrest at maura.forrest@yukon-news.com

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