Miners in British Columbia – a large steelmaking coal producer – have called for changes to the province’s carbon tax, arguing that the playing field has to be levelled to aid final investment decisions and help the provincial economy recover and grow.
The Mining Association of British Columbia (MABC) argues that the province’s carbon tax should provide mines and smelters in British Columbia the same support as those in other Canadian provinces and territories.
“We need a carbon tax that protects both the environment and jobs. The reality is we can have both,” said British Columbia’s president and CEO Michael Goehring.
“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.”
In 2019, the BC Mining Jobs Task Force delivered a report to government containing 25 recommendations to support mining and to create and sustain mining jobs for workers across the province. The report identified the carbon tax as the single greatest barrier to helping the industry succeed and compete in the global market.
Currently, 46 national and 32 subnational jurisdictions have a price on carbon and British Columbia’s carbon tax is among the highest in the world. MABC states that all jurisdictions with carbon pricing, except British Columbia, provide meaningful support for their mining industries.
The association says that Covid’s impact has left the province struggling. Nine British Columbia mines are expected to reach the end of their productive life and close, leaving only five operating mines in 2040, if no new projects advance. While there are a number of mine expansions and new mines under consideration, they are not guaranteed.
“BC mining can help our province’s economic recovery and help fight global climate change. BC has among the lowest greenhouse gas (GHG) emissions minerals and metals in the world, which are the essential building blocks of clean and renewable energy technologies, like low emission vehicles and solar panels,” added Goehring.
MABC engaged Ed Mansfield, of Mansfield Consulting, to analyse carbon taxation on mining in British Columbia and competing jurisdictions. Mansfield found that British Columbia mining is at a significant competitive disadvantage, relative to all competitors because they either do not price carbon, or they protect their mining industries and workers from increased costs owing to carbon pricing and policies.
Mansfield reviewed British Columbia’s aluminium, copper and steelmaking coal against competition in the US, Australia, Chile, Russia and the Middle East.
Mansfield’s report concluded that a jurisdiction with a high carbon tax, with no protection for a trade-exposed industry like mining, may lead to a shift in economic activity to a jurisdiction with lower carbon costs, but higher GHG emissions, which is referred to as carbon leakage.
Along with the change to the carbon tax, MABC is seeking improvements to the regulatory framework for mining. While British Columbia has some of the highest regulatory standards in the world, the Mining Jobs Task Force identified the need to improve its clarity and predictability. In doing so, British Columbia can have a world-leading regulatory regime that fosters innovation and environmental protection and supports jobs and economic growth.
As the World Bank concluded on October 13, in order to meet the Paris Agreement targets, ambitious climate action will require a large-scale transition to clean energy which will drive significant demand for minerals. This, MABC says, presents British Columbia with a significant opportunity to be a leading supplier of responsibly produced, low-carbon minerals and metals to help the world transition to a low carbon economy.
“Adjusting the carbon tax does not put at risk our ability to meet our provincial GHG targets. Nor will it necessarily lead to higher GHG from the mining sector,” added Goehring.
“It will create a level playing field for British Columbia mines with our competitors in Ontario, Quebec and the territories, while also continuing to incentivise emissions reductions.”