Hold off on carbon tax, Yukon Chamber of Mines pleads to Ottawa

The Yukon Chamber of Mines is imploring federal Environment Minister Catherine McKenna to abandon the carbon tax on the mining industry in the Yukon.

CBC obtained a copy of the letter which was sent last month to McKenna from John Small, the vice president and chair of the chamber's finance, taxation and royalties committee. Copies were also sent to Yukon Premier Sandy Silver, and MP Larry Bagnell.

Small's letter says the tax will hurt placer miners, exploration companies, hard rock mining operations, and prospectors.

It pleads with McKenna to hold off on the carbon tax, saying it will "inflict great harm" to the mineral exploration industry in the North.

The letter says it's not clear how the proposed tax will lessen carbon emissions.

It also quotes a report that was co-commissioned by the Mining Association of Canada, the Prospectors and Developer's Association of Canada, the Association of Consulting Engineering Companies Canada, and the NWT/Nunavut and Yukon Chambers of Mines.

"Capital costs for mines built in Canada's northern territories [are] double for gold mines, 2.5 times higher for base minerals, and operating costs which are 60 percent higher than our southern counterparts," the letter says, referring to the report.

Reducing competitiveness

The letter also warns that increased operating costs for the northern mineral industry will reduce its competitiveness.

Small's letter warns that placer miners in particular will be hit hard by a carbon tax.

"The negative effect of increasing costs on these operators cannot be overstated. This segment of Yukon's mining industry have very little options in the way of energy consumption, aside from usage of diesel fuel, and stand to take a significant financial hit, with an inability to pass on the costs to consumers, like other sectors."

The letter refers to a study of the chamber's membership, which found the private sector is "forecast to contribute $15.8 million out of the Yukon government's projected $26 million annual revenues collected from a carbon tax by 2022."

It says the private sector in the Yukon is "precarious."

The chamber wants McKenna to gradually phase in the carbon tax in the North, tailor a tax that takes into account the economy and the geography, and ensure that any carbon pricing be revenue neutral within each sector.