Rio Tinto Alcan’s aluminum smelter at Kitimat competes against producers in the Middle East and Russia that have no carbon tax. (Rio Tinto)

Rio Tinto Alcan’s aluminum smelter at Kitimat competes against producers in the Middle East and Russia that have no carbon tax. (Rio Tinto)

B.C. VOTES 2020

B.C. carbon tax highest in Canada, export industries unprotected

B.C. NDP, B.C. Liberals say they’re looking at exemptions

B.C. currently has the highest carbon tax in North America, and its unique lack of protection for export industries like mining and smelting is making it more likely that new copper and steelmaking coal mines are built elsewhere, the Mining Association of B.C. warns.

B.C. currently has 14 operating mines and two smelters, the Teck smelter at Trail and the recently expanded Rio Tinto Alcan aluminum smelter at Kitimat. In a new report, the mining industry notes that B.C.’s copper mines has lower emissions than Chile’s, its metallurgical coal is produced with half of the greenhouse gas emissions of Australia’s, and its aluminum is seven times less carbon-intensive than Russia’s.

That advantage is largely a result of abundant hydroelectric power, and the B.C. industry has been using it to reduce emissions further. But in a price-sensitive world market, mine investment is likely to go to countries that don’t have carbon tax. The industry calls it “carbon leakage,” where a higher carbon tax costs jobs locally and produces more emissions globally.

If B.C. doesn’t offer exemptions to export industries like metal mining and production, “you’ll reduce emissions in B.C. because you’ll close mines,” Michael Goehring, CEO of the Mining Association of B.C., said in an interview. He emphasized that the industry supports a price on carbon and isn’t asking for the B.C. carbon tax to be eliminated, just modified to match Ottawa’s protections for export industries. The Canadian government and all other provincial governments have such protections, and they’re not alone around the world.

“All of the Northern European nations do it,” Goehring said. “California does it.”

Asked about the issue at a campaign stop in Langley Oct. 21, B.C. NDP leader John Horgan said he’s working on the exemption issue, which was first raised in B.C. as its cement makers started losing business to U.S. and China imports.

“This is an issue that we’ve been working on inside of government, and if we’re re-elected on Saturday we’re going to be focusing on making sure that our traditional industries don’t suffer, in fact they benefit from our leadership on climate action,” Horgan told Black Press.

RELATED: NDP breaks on sales tax, carbon tax make LNG happen

RELATED: Delayed carbon tax, sales tax payments come due in B.C.

The B.C. Liberal election platform calls for industrial carbon tax exemptions, committing the party to “work to ensure that our carbon tax system for job-creating export industries does not increase global greenhouse gas emissions by driving investment to higher-emitting jurisdictions.”

B.C. Liberal leader Andrew Wilkinson said the issue has to be dealt with “very soon” or B.C. will lose industry and jobs.

“This has been done in many jurisdictions around the world, and it’s high time it was dealt with in B.C.,” Wilkinson said in an interview Oct. 21. “We can’t see our exports losing competitiveness against jurisdictions where there is no such tax.”

Most people see the carbon tax when they fuel up vehicles, with the B.C. tax currently at 8.89 cents a litre on gasoline and 10.23 cents on diesel on top of federal and provincial fuel. It also applies to natural gas, currently at 7.6 cents per cubic metre, as well as propane and industrial fuels like coal. The NDP government increased the tax from $35 to $40 per tonne of emissions in April 2019, then delayed the next increase due to the COVID-19 pandemic. It is due to rise to $45 in April 2021, moving to the federal target of $50 after that.

B.C. NDP platform highlights:

• Reduce B.C.’s total greenhouse gas emissions by 40 per cent in 2030

• Fast-track B.C.’s industrial electrification strategy for natural gas and other industries

B.C. Liberal platform highlights:

• Work with Ottawa to review scheduled carbon tax increases in light of the COVID-19 recession

• Encourage retrofitting of B.C. homes and businesses to reduce emissions

B.C. Green Party platform highlights:

• Commit B.C. to be carbon neutral by 2045, matching California

• Implement a moratorium on hydraulic fracturing for natural gas


@tomfletcherbc
tfletcher@blackpress.ca

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