Back in 1897, the government of the Northwest Territories decided to capitalize on the influx of miners into the gold fields of the Yukon. They decided to impose a liquor licensing system and charge each outlet an annual fee. The battle of booze resulted in the creation of the Yukon Territory.
In 1897, the Yukon was legally part of the Northwest Territories which had its capital city in Regina. Since 1895, the Canadian federal government had been financing a sort of district government which had been administering the Yukon and its growing population of largely American miners.
Clifford Sifton, was the federal minister responsible for the NWT. He took his role seriously and wasn't going to be pushed around by any territorial government under his jurisdiction. In 1897, without informing Sifton, the NWT government sent its agent to Dawson to impose an annual license fee of $2000 on each drinking establishment.
This move so angered Clifford Sifton that he announced the Yukon would be made into a separate district under his authority. The premier of the NWT, Frederick Haultain, was equally angered. He wrote to Sifton accusing him of overruling his authority and invading the self-government rights of the NWT. The protest fell on deaf ears and the power over the liquor trade was transferred to the commissioner in council of the Yukon.
That winter, the Yukon act was drawn up and debated in the House of Commons. It was almost a duplicate of the NWT act which had been passed in 1871. The notable exception was that unlike in the NWT, where the chief executive officer was the Lt Governor, the Yukon's chief officer would be called commissioner and report directly to Clifford Sifton. In addition, the territorial council would be appointed not elected as in the NWT. At the time, Sifton said 90 percent of the people in the Yukon were foreigners so the Canadian federal government was going to run the show.
The Yukon act creating the new Territory was passed by the House of Commons and the Senate on June 13, 1898.
It's difficult to say when the Yukon would have become a territory unto itself had the Northwest Territories not decided to profit from the lucrative booze business during the early days of the gold rush.
A CKRW Yukon Nugget by Les McLaughlin
See also: Clifford Sifton