Top mining body in BC adds changes to carbon tax to wishlist

The Mining Association of BC (MABC) has called for changes to the provincial carbon tax to “level the playing field” for mining operators in British Columbia to compete with operators globally and kick-start the economy post-pandemic.

The MABC, of which local operators Teck and North Coal are members, has released a paper that it said found BC operators to be at a “significant competitive disadvantage” to international competitors that operate in jurisdictions without carbon taxes or emissions-trading schemes, saying that as a result, higher prices for BC commodities meant there was a risk of “carbon leakage” - being where buyers source materials from cheaper locations with less robust environmental policies.

“BC is the only jurisdiction in the world with a robust carbon pricing regime that provides essentially no support to its energy intensive trade exposed industries, such as mining. As a result, the risk of carbon leakage from BC is real,” said the MABC release.

MABC president and CEO, Michael Goehring said that BC needed a carbon tax that protected the environment and jobs at the same time.

“While BC is a leader in climate action, all our competitors either have no carbon tax or protect their mining sectors from the impacts of carbon pricing. This adversely impacts our ability to compete and succeed globally, hurting workers and mining communities,” he said.

The MABC said in its report that it was asking for more support for mining companies while retaining the carbon tax by modifying how the existing Clean BC Industrial Incentive Program (CIIP) was applied to carbon taxes paid. The CIIP provides refunds to operators based on their emissions intensity.

In the report, the MABC acknowledges that when the carbon tax was introduced in 2008, “it was assumed many other nations and sub-national jurisdictions would follow with their own. Most have not.”

Instead the association argues that those competitor jurisdictions have moved to protect their operators, leaning on what it admitted was anecdotal evidence that “the carbon tax is already contributing to a shift in capital investment and carbon leakage.”

Coal represented over $6.7 billion in exports for BC in 2019 - over 15 per cent of total exports that year. While the MABC report said that commodity exports were a large part of BC’s economy, the buyers were less enamored, hence the risk of losing customers and “carbon leakage.”

“While mining products constitute a major part of BC’s exports, they account for only a relatively small amount of mining products purchased by BC’s customers through the global marketplace.”

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