Yukon gov’t considers subsidies for mining companies to reduce emissions

The now-abandoned Minto mine in central Yukon, in 2015. A submission from the territory’s energy department to legislators states the territory could subsidize companies in a bid to help those companies reduce emissions. (Capstone Mining)

Internal gov’t documents suggest move is to ensure investments in industry don’t wither

The Yukon government may subsidize mining companies to help them reduce emissions, according to documents obtained through an access to information request.

A submission from the territory’s energy department to the government’s cabinet committee on legislation last summer says such subsidies could be “necessary” for the industry.

“Establishment of the legislated target may have a negative impact on the investment climate of the industry,” the submission reads. “Individual companies will bear costs associated with implementing measures to reduce emissions at mine sites.

“Government subsidies and financial incentives to assist companies in meeting the target may be necessary mitigative measures to balance a competitive, low-barrier market with greenhouse gas reduction efforts.”

The territorial government is in the process of establishing what it calls intensity-based targets, which are set to the amount of emissions produced per unit of production. The targets — called “aspirational” in the documents — stem from the territory’s 2020 climate change strategy that seeks to cut the Yukon’s carbon footprint by 45 per cent this decade.

The government pledged to establish the mining targets by late 2022, but missed that deadline.

Now, the government wants to slash emissions from active mines by 45 per cent by 2035. The plan is to legislate the target by amending the territory’s Clean Energy Act. Officials said that is set to happen in the fall. Emissions from abandoned mines will be subject to a separate target.

But the internal government documents appear to cast doubt on those plans.

“Implementing the proposed target without a specific plan for programs and investments that could support industry with the reduction of greenhouse gases may contribute to an inability to meet targets and negatively impact the government’s relationship with industry,” reads the submission to the cabinet committee.

Shane Andre, the director of the government’s energy branch, said the government provides incentives to other sectors, for instance, to businesses that want to make their buildings more energy efficient.

“It’s really to this point something we haven’t offered, while that’s been available to other areas of the economy,” he said.

Asked how much funding the territory could give to the industry, Andre said some funding could come from Ottawa’s carbon pricing system for large emitters. Called the Output-Based Pricing System, Andre said money collected from this program could be reinvested into companies working to decarbonize, in the form of a rebate.

“It may be that that resource makes up a big part of what we do in the space to try and support the industry to reduce emissions,” he said.

The documents also suggest the proposed mining targets don’t have teeth, saying “the lack of enforcement measures make this proposed legislation less effective than alternative regulatory mechanisms in the industry.”

Andre said those already exist at the federal level.

“We’re setting the goalpost, and then we kind of tack on the options that get us there. We’ll start with, you know, some incentives and support to get the industry there,” he said.

While highly variable year-to-year, between 2009 and 2020, upward of 15 per cent of territorial emissions came from mining.

‘Definitely will increase the financial burden on taxpayers’ 

CBC News shared the internal documents with Kayla Brehon, the mining coordinator with the Yukon Conservation Society. She’s worried the subsidy would only benefit the industry.

“It will definitely increase the financial burden on taxpayers,” Brehon said. “The mining industry should be treated the same as everybody else.”

Jaime Kneen, the national program co-lead of Mining Watch Canada, also reviewed some of the documents and said the “giveaways” are intended to appease industry ired by what it considers further restrictions on operations.

He also said the targets could increase efficiency and thereby boost output, negating efforts to reduce emissions — a concept often referred to in energy economics as the Jevons paradox. Kneen said that applies in this instance.

“I mean, it’s an important tool, but the actual objective is actually to reduce overall emissions, not to improve efficiency,” he said. “People then think the issue has been dealt with and it hasn’t.”

Related stories from around the North: 

Canada: Geologists defend mining within Whitehorse city limits, CBC News

Norway : No foreign companions as Gazprom prepares well drilling in Arctic waters, The Independent Barents Observer

Sweden: Reducing emissions could create up to 3,000 new jobs in Arctic Sweden says mining group, Radio Sweden

United States: US to reject access road to northern Alaska mining district, Politico reports, Reuters

Julien Gignac, CBC News

Julien Gignac is a reporter for CBC Yukon. He can be reached at julien.gignac@cbc.ca.

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