Nunavut miner wants carbon taxes to fund clean power projects

Agnico Eagle pitches plan to power mines and nearby communities with wind farms

This map shows how Agnico Eagle wants to build a series of wind farms to help power its Nunavut mines and nearby communities in the Kivalliq. It’s from a presentation the company gave to the Senate’s Arctic committee in September.

By John Thompson

Agnico Eagle Mines Ltd. wants to build a series of wind turbines to power its Nunavut mines and several nearby Kivalliq communities.

And it wants these projects to be paid for with its contributions to the federal carbon tax, along with an additional contribution from Ottawa.

The company made this pitch to Canada’s environment minister, Catherine McKenna, in a letter sent this past September.

The letter was tabled in the Nunavut legislature on Tuesday, May 28, by Cathy Towtongie, MLA for Rankin Inlet North-Chesterfield Inlet.

She homed in on the company’s concerns about the financial burden of paying a carbon tax, when operating a mine in Nunavut is already much more expensive than elsewhere in Canada.

Agnico Eagle expects to pay $48 million in carbon taxes over the life of its Nunavut mines and says that these additional costs “will significantly limit our ability to invest in the region.”

Towtongie asked Finance Minister George Hickes what the Government of Nunavut is doing “to ensure that the federal carbon tax does not unfairly disadvantage this vital sector of our economy.”

Hickes replied that Nunavut’s mining companies will get a break under the federal carbon tax’s output-based standards.

“They take a reduction, which is approximately 40 per cent off the top for mining companies,” he said.

“The federal government has listened to us on realizing how important of an industry that is to Nunavut and has made some further exemptions within the carbon pricing model.”

Agnico Eagle’s letter doesn’t object to paying the federal carbon tax. But it wants to see its tax contributions flow into an “individualized trust account” that would help pay for its envisioned clean energy project.

As things stand, all carbon tax funds collected in Nunavut are expected to flow into the territorial government’s coffers.

Agnico Eagle bills its project as “the world’s largest renewable energy micro-grid.” It would, according to the company, provide green energy to 7,500 Inuit, or nearly one-quarter of Nunavut’s population.

It also would lower annual greenhouse gas emissions by over 1.5 million tonnes, and reduce the cost of electricity in three Nunavut communities by more than half, according to the letter.

“This proposal will accelerate the decarbonization of Nunavut and usher in a new era of cleaner energy in Canada’s North,” the letter states.

Agnico Eagle is proposing that the wind farms would be fully Inuit owned.

The company doesn’t see these interconnected wind projects as a substitute for building a power line to connect the Kivalliq to Manitoba’s electrical grid. Instead, it says “the micro-grid would form the starting point for a distribution network within Kivalliq and be complementary to a future power line.”

But “to be economically viable this project would require the financial support of your government—through direct or indirect project financing,” the letter states.

It’s not clear how much the envisioned energy project would cost, or how much money the federal government is being asked to contribute.

The company did offer some additional details in a presentation to the Senate’s Arctic committee in September.

A map included in that presentation shows wind turbines built outside Baker Lake, Chesterfield Inlet, Rankin Inlet and Arviat.

It is said in the presentation that the wind farms could be built in three to four years, and that the same technology is currently being used in similar northern environments.

It is also asserted in the presentation that the project “pays for itself” through lower electricity costs “and would deliver jobs and revenue to the community.”

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(6) Comments:

  1. Posted by Northern Guy on

    If the feds bite on this proposal and agree to partner with Agnico Eagle to fund this energy proposal, the Kivalliq can kiss the Manitoba hydro-fibre link goodbye!

  2. Posted by Qavvigarjjuk on

    Sounds really exiting but I worry what those huge moving blades will do. Will they frighten our caribou? Will they kill numerous migrating birds? Will the infrasound disturb people and wildlife?

  3. Posted by Why u dum on

    Who the hell does Anico Eagle think they are. Theat is my money, I want that money in my pocket , not your greedy, gold digging hands, NO WAY Eagle,them are fighting words

    • Posted by Northern Guy on

      Re-read the article, this proposal would be funded using carbon tax money paid by AEM to the FEDERAL GOVERNMENT, it doesn’t belong to individual taxpayers and would have never ended up in your pocket in any event. It is a clever proposal that would revenue neutral from a territorial and federal perspective and would eliminate a big infrastructure related to the completion of the Manitoba-Kivalliq Hydro-Fibre link. The Feds would be crazy not to say yes.

      • Posted by Northern Walker on

        Lol you nailed it on the head, it sure is clever of Agnico. But they aren’t thinking of Kivilliaq or the people. By doing this they get to instead of paying Carbon Taxes and that money going to fund other projects that Carbon Tax they would pay is used to fund their wind farm that they will greatly benefit from by reducing their overall electrical costs. So not only will in the end they save a crazy amount of money far surpassing that $48,000,000 carbon tax amount that they say they will pay over the course of its mine life. The federal gov will also have to fork over millions to build it yes the communities will benefit and I am all for clean energy and wind farms in the north it can be done and has been in other northern regions but Gov, charge them the taxes full amount no they shouldn’t get any tax breaks 1000 ounces of gold a day is their quota just at Meadowbank thats 365,000 ounces a year at about $1600 an ounce thats over half of a billion dollars just at Meadowbank. In the first quarter Jan-Mar 2019 398,217 ounces pulled from all mines. So thats half a billion dollars in revenue right there in just 3 months. Of course the costs are height the overhead is high but their total cash costs per ounce was only $623 per ounce so they are profiting close to $1,000 per ounce. They have reported this year that they have 307 million in cash in the account, they have ZERO debt and have access to 1.2 billion in credit. How many of you and how many businesses can say they have Zero debt? They shouldn’t get any exceptions Canada wake up stop giving money to people and companies that simply dont need it. Build the wind farm yourself and charge them the Carbon Tax and then charge them what you would any company for the electrical consumption.

        • Posted by 1 cent on

          Maybe its time for Inuit to learn to be miners and to build, own and work in their own mine, rather than to get 1 cent of royalties on a $1000 of their own gold.

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