ONTARIO TO SPEND $5M REIMBURSING COMPANIES HIT BY CARBON PRICE REPEAL.

TORONTO • Ontario’s new Progressive Conservative government expects to spend up to $5 million to compensate companies that bought into the province’s cap-and-trade system, the provincial environment minister said Wednesday before moving to repeal the carbon pricing program.

Rod Phillips introduced a bill that, if passed, will lay out the legal framework to wind down cap and trade, as well as the criteria for companies seeking to be reimbursed for costs incurred through the program.

While the program’s 272 participants bought close to $3 billion in allowances, Phillips said only those that purchased more than they used while the program was still active, and were not able to recover those costs from consumers, will be eligible for compensation.

The proposed legislation would also protect the province from any potential litigation over the decision, the government said.

Critics were quick to call the move disruptive for business, saying it will likely be challenged in court despite the immunity built into the bill. But Phillips said he believes it will be well received.

“The feedback I’ve been getting from the business community is quite positive about this government and so I don’t have worries about that,” he said.

The cap-and-trade system aims to lower greenhouse gas emissions by putting caps on the amount of pollution companies in certain industries can emit. If they exceed those limits, they must buy allowances at quarterly auctions or from other companies that come in under their limits.

Scrapping the system was one of Premier Doug Ford’s key promises during the province’s spring election campaign, and one of the priorities he vowed to address in this month’s rare summer sitting of the legislature.

The Tory government has already taken steps to unravel the program, including revoking the regulation that lays out its operation. That has led to the cancellation of a number of green initiatives that were funded through cap-and-trade revenues, such as rebates for energyefficient renovations and a fund for school repairs.

Opposition parties had expressed concerns that the government could be on the hook for billions of dollars to compensate permit holders, and that the Tories have yet to explain how they will make up for the lost revenue.

Others, including the federal environment minister, had also raised the alarm about what they perceived as Ontario’s lack of a plan to tackle climate change.

The New Democrats and the Green party said the bill introduced Wednesday did not assuage their fears, even though it requires the government to set targets for reducing greenhouse gas emissions and to publish a climate change plan. Phillips said the specifics of both would be determined at a later date.