Placer mining, aviation fuel exempt from carbon tax in Yukon, says gov't

The Yukon government says it's made an agreement with Ottawa to exempt aviation fuel and placer mining operations in the territory from acarbon tax tobe introduced across Canadanext year.

"Because of where we live, air transportation within the territory is a vital service," said Premier Sandy Silver.

"What we're doing in the Yukon is making sure that the carbon pricing mechanism is working as it's supposed to work, and doesn't penalize districts like the North, that have higher costs of living."

The territorial government has already promised that localbusinesses, municipalities, First Nations, and individual Yukoners would see rebates, to offset the new tax.

Silver says it makes sense to also offer rebates to placer minerswho cannot operate on renewable energy and also cannot raise the price of their product.

"They require large amounts of fossil fuel to produce a good in this case gold that they can sell only at a given price," he said, adding the government is still looking at the quartz mining industry, to determine how carbon pricing would apply there.

Rebates 'vital,' says airline

The aviation fuel exemption would apply for any airline flying within Yukon, or to and from the territory.

In a statement,Alkan Air president Wendy Taylor called the exemption "vital to our industry."

Air North president JosephSparling agrees.

"No matter how well-intentioned the carbon tax is, it's going to be very costly for all consumers. And I think steps like this will mitigate the impact," he said.

"I think the fact that there's been a recognition that the North, in particular, will be impacted is good."

But Sparling still questionsOttawa's plan for carbon pricing, saying it shouldn't be introduced when fuel prices are already on an upward trend. He says Yukonerswho pay more tax will have less money to spend on travel.

The carbon tax is expected to be introduced on Jan. 1.

Silverinsists he's still working to ensure "we reach the best possible deal for Yukoners."

He did confirm that any carbon tax rebates will come to Yukonersin the form of cheques.

"It's just working out details of how many times ayear, what times of yearwe do that, and how those cheques get cut," he said.