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

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."