Joel Krahn/Yukon News People take in the sunset on the clay cliffs in Whitehorse the evening of Aug. 29.

The carbon tax is supposed to incentivize low carbon alternatives

Almost everything government does involves the choosing of so-called “winners” and “losers”

As the feds were in town last week sorting out some of the details of the upcoming carbon tax with the Yukon Government, we have further indications that no “exemption” for the North is in the cards.

Seemingly resigned (finally) to the notion that this is coming one way or another, the opposition has embraced a new line of attack. A refusal by the government to promise that the tax it collected once in place would be “revenue neutral”, not for government, but for individual Yukoners paying it led to criticism that it would be picking winners and losers

If I might move slightly off track for a moment, let us add the expression “pick winners and losers” to our list of meaningless political talking points that ought to be excised from the political discourse. Almost everything government does, whether overtly or more subtly, involves the choosing of so-called “winners” and “losers.”

Yes, since they need to win elections politicians will often go out of their ways to only highlight who stands to gain from a particular move while downplaying the hit suffered by those who lose. But the losers are still there even if they don’t recognize themselves as such. Every dollar spent on a program or policy that doesn’t benefit you in some direct or indirect way makes you a “loser” in some sense. It means less money to spend on those that do benefit you or to return to you in the form of tax cuts.

Ultimately picking winners and losers is what government does. It is not that anyone wants there to be “losers” in the world, but zero sum situations exist and governments have to contend with them.

Returning specifically to carbon pricing, I certainly always understood the expression “revenue neutral” to mean revenue neutral for government (as in it didn’t result in a net increase in revenue), and not revenue neutral among individual payers.

The latter would defeat the purpose of the tax. If you literally returned every dollar and cent to the exact person who paid that tax to begin with it would accomplish nothing. A carbon tax creates winners and losers by design. The point is to create a structure so that the losers want to and can become winners by reducing their emissions.

The tax is supposed to be about incentivizing low carbon alternatives wherever they are available. So yes if you are one who purposely chooses a high carbon lifestyle which provides little in the way of broader economic benefit in the face of reasonably cost effective alternatives you have to “lose” in order for the policy to be effective.

So what principles ought to govern the rebating of carbon tax revenue to Yukoners? This was the subject of one of those online consultations the Yukon Government has been doing recently.

As I’ve argued before, I don’t think carbon pricing should be a “tax grab” or a means to accomplishing some other social policy change. This is why I supported the Liberal promise of revenue neutrality over the NDP promise of splitting the money between rebates for low income households and a green energy fund.

If we are modelling for other jurisdictions around the world that might be considering carbon pricing as an economically efficient mechanism to reduce emission, it behooves us not to prove the critics right by using it to increase the size of government or redistribute wealth from rich to poor.

My view, as it has always been, is that the manner in which the money collected through carbon pricing is rebated should be structured in a way that recognizes that a certain quantity of carbon emissions are unavoidable or cost prohibitive to eliminate. Carbon taxes collected on those emissions ought to be refunded to the payer.

But that doesn’t mean returning every dollar to the person who paid it.

For example, as the former premier constantly felt the need to remind us, home heating is unavoidable in the Yukon. That is absolutely true and it isn’t just low income households that must cope with the increased cost of home heating. It is middle and high income ones as well.

But how much you spend on heating your home is the result of certain choices regarding size, temperature and efficiency. I think there needs to be some sort of flat rebate structured around the number of people living in a household. But that rebate ought to create winners and losers.

Transportation is another one. Most of us have to get to work. Some of us need vehicles – often bigger vehicles – to do our jobs and that ought to be recognized. But if you drive your one ton to your desk job then you may be one of those “losers” under whatever carbon rebate scheme is devised. Drive a fuel efficient car? Maybe you can break even and receive back what you paid. Ride a bike, catch public transit, or carpool? Perhaps the net result of the rebating will make you a “winner.”

There are also certain industries – the placer industry being one commonly cited by my colleague Keith Halliday as a cause for concern – which has to pay big fuel bills that ought to be specifically targeted. But there are going to be differences in level of efficiency between operations as well and we ought to be creative in how we return the money. Perhaps rebates could be a function of the amount of minerals produced rather than the quantity of fuel consumed.

Yes, implementing carbon pricing is going to create some winners and losers. And some of the details are going to be complicated. Let us get those uncomfortable truths out of the way and recognize that not all carbon emissions were created equal. Some are the practically unavoidable consequence of living and working in 2017. Others are the result of our own excess. The key to devising an effective policy will be recognizing he difference.

Kyle Carruthers is a born-and-raised Yukoner who lives and practises law in Whitehorse.

carbon taxYukon

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

Just Posted

Dawson the dog sits next to the Chariot Patrick Jackson has loaded and rigged up to walk the Dempster Highway from where it begins, off the North Klondike Highway, to the Arctic Circle. (Submitted)
Walking the Dempster

Patrick Jackson gets set for 405-kilometre journey

Liberal leader Sandy Silver speaks outside his campaign headquarters in Dawson City following early poll results on April 12. (Robin Sharp/Yukon News)
BREAKING: Minority government results will wait on tie vote in Vuntut Gwitchin

The Yukon Party and the Liberal Party currently have secured the same amount of seats

Yukonomist Keith Halliday
YUKONOMIST: The Neapolitan election

Do you remember those old bricks of Neapolitan ice cream from birthday… Continue reading

Chief Medical Officer of Health Dr. Brendan Hanley. (Crystal Schick/Yukon News)
Exposure notice issued for April 3 Air North flight

Yukon Chief Medical Officer of Health Dr. Brendan Hanley has issued another… Continue reading

Crystal Schick/Yukon News file
Runners in the Yukon Arctic Ultra marathon race down the Yukon River near the Marwell industrial area in Whitehorse on Feb. 3, 2019.
Cold-weather exercise hard on the lungs

Amy Kenny Special to the Yukon News It might make you feel… Continue reading

Today’s Mailbox: Rent freezes and the youth vote

Dear Editor, I read the article regarding the recommendations by the Yukon… Continue reading

Point-in-Time homeless count planned this month

Volunteers will count those in shelters, short-term housing and without shelter in a 24-hour period.

The Yukon’s new ATIPP Act came into effect on April 1. Yukoners can submit ATIPP requests online or at the Legislative Assembly building. (Gabrielle Plonka/Yukon News file)
New ATIPP Act in effect as of April 1

The changes promise increased government transparency

A new conservancy in northern B.C. is adjacent to Mount Edziza Provincial Park. (Courtesy BC Parks)
Ice Mountain Lands near Telegraph Creek, B.C., granted conservancy protection

The conservancy is the first step in a multi-year Tahltan Stewardship Initiative

Yukon RCMP reported a child pornography-related arrest on April 1. (Phil McLachlan/Black Press file)
Whitehorse man arrested on child pornography charges

The 43-year-old was charged with possession of child pornography and making child pornography

Team Yukon athletes wave flags at the 2012 Arctic Winter Games opening ceremony in Whitehorse. The postponed 2022 event in Wood Buffalo, Alta., has been rescheduled for Jan. 29 to Feb. 4, 2023. (Justin Kennedy/Yukon News file)
New dates set for Arctic Winter Games

Wood Buffalo, Alta. will host event Jan. 29 to Feb. 4, 2023

Victoria Gold Corp. has contributed $1 million to the First Nation of Na-cho Nyak Dun after six months of production at the Eagle Gold Mine. (Submitted/Victoria Gold Corp.)
Victoria Gold contributes $1 million to First Nation of Na-cho Nyak Dun

Victoria Gold signed a Comprehensive Cooperation and Benefits Agreement in 2011

Most Read