Carbon tax rebate coming to Yukon municipalities, says premier

A promised carbon tax rebate to Yukon municipalities has many of the territory's mayors happy, butsome say their budget planning is being hurt by a lack of detailon how the mechanism would work and remain skeptical the rebate will even happen.

Last week, Premier Sandy Silver sent letters to the mayors informing them municipalities willreceive a 100 per cent rebate. Up until then, the territorial government had only committed to returning money collected by the federal carbon tax to Yukoners and Yukon businesses.

Silver said First Nations governments can also expect carbon tax revenue to be returned to them.

The federal carbon tax is expected to come into effect on January 1, 2019. At that time, carbon will be taxed at $20 per tonne and by 2022, at $50 per tonne.

The biggest direct costs for municipalities will be fuel for municipal vehicles and heating municipal buildings.

Last month, the City of Whitehorse estimated it would pay $126,000 in 2019 and $324,000 by 2022.

• Carbon tax could cost City of Whitehorse $126K in first year

Dawson City Mayor Wayne Potoroka saidit's a "major step forward" to have the commitment to include municipalities in a rebate mechanism.

Potoroka saidhe wasn't expecting to heardetails onhow the mechanism would work by this weekend's Association of Yukon Communities' conference.

He saidwhile those details are still unclear, he does not think the carbon tax is "going to break the bank or anything."

"We have to understand what the impact will be on our budgets, how we can reduce our costs associated with carbon and budget accordingly," said Potoroka.

Haines Junction Mayor Michael Riseborough agrees the important part is knowing the rebate is coming.

"Municipalities use the money that we raise through taxes to provide for municipal services. To have the money that we raise go in taxes, to my way of thinking, is counterproductive," he said.

"The actual details of the mechanism of how it comes and so on is one of those things that we can probably afford to wait for," he said, but added hopefully not for too long.

Faro Mayor Jack Bowers saidhe's skeptical.

"We've seen in the past taxes such as the GST where rebates were promised that didn't really transpire," he said.

Bowers sponsored a resolution at the meetingthat the Yukon government extend a rebate to municipalities.

It claims the federal carbon tax "will place an undue financial burden on municipalities that is counter-productive to investing in energy efficiencies."

Although the carbon tax could start next year, municipalities may not see a rebate until 2021, saidAssociation of Yukon Communities past president Diana Rogerson.

Slow response from Ottawa

Premier Sandy Silver thanked mayors for their patience during his speech at Friday night's Association of Yukon Communities dinner.

That's where he announced that an exemption was coming to the aviation industry: flights between Yukon communities would be exempt from the carbon tax.

Silver said the government has been waiting on Ottawa for answers to some specific questions. He said answers have been slow coming and the territorial government is very frustrated.

Silver said he's had many discussions with Environment and Climate Change Minister Catherine McKenna and Yukon Environment Minister Pauline Frost.

"We're very close and I can't see anything other than what we were asking for, so that's good. It's just a matter of getting those final details finalized," he said.

Silver met with McKenna in Ottawa almost two weeks ago, saying he told herthe Yukon can't wait past the summer for answers with one legislative session left before the tax could be in place.

Plus, he said,budget planning is starting in August this year.

Interim Yukon Party Leader Stacey Hassard saidthere are still not enough details about a carbon tax rebate for municipalities.

He saidit's unfair to the municipalities if they don't have information about the rebate to share with their communities.