Ford promises to kill Ontario’s carbon market in the most damaging fashion
Ford pledges to ditch tax as first priority
As soon as the new Progressive Conservative government is sworn in at the end of the month, it’ll tell Quebec and California that Ontario is bailing out of the carbon-emissions market it joined this year to help fight climate change, Premier-designate Doug Ford said Friday.
“I made a promise to the people that we would take immediate action to scrap the cap-andtrade carbon tax and bring their gas prices down,” Ford said in a Toronto news conference, where the only purpose was to draw attention to the pledge. “Today, I want to confirm that as a first step to lowering taxes in Ontario, the carbon tax’s days are numbered.”
He’ll be calling the legislature for a summer session to get some immediate bills passed and this will be the first of them, he said. This will mean living up to a marquee Tory promise in the election Ford just won.
“The government will provide clear rules for the orderly wind down of the cap-and-trade program,” Ford promised.
This is trickier than it sounds. Leave aside the questions of whether climate change is happening (Ford says it is) and whether humans are responsible (Ford says we are) and whether we should do anything about it (what Ford thinks isn’t clear) and whether the market for carbon emissions the Liberals set up is the thing we should do (Ford definitely thinks it isn’t). The Tories promised to quit the market, and they won the election, and they’re going to do it.
Let’s talk only about how to do this well versus how to do it poorly. Major greenhouse-gas emitters, like greenhouses and fuel companies, have had to buy emissions permits since the beginning of 2017, at a price set at competitive auctions. Under the scheme, fewer and fewer permits would be released each year, and companies would either have to pay more for them or cut emissions and reduce their demand. The idea is that the emissions permits end up in the hands of the companies that make the most from their emissions.
The bigger the market, the better it is at getting efficient results, so Ontario hooked up with the other two major North American jurisdictions with carbon markets. The deal with Quebec and California says we can pull out and will “endeavour to give 12 months notice of intent to withdraw” first, but doesn’t require it. Otherwise, there’s nothing in the agreement about what happens when one partner wants to go.
The Ontario government has been auctioning permits since the beginning of 2017 and has brought in about $2.8 billion. It’s budgeted to spend that money mainly on other green programs, like transit construction and subsidies for people who reinsulate their houses. The Tories said they’d stop selling permits and balance the lost revenue “by eliminating (the) corresponding slush fund,” as their list of promises put it. There’s some technical stuff under the hood but essentially current permits are sold to match current emissions. Stop taking in money, stop spending it. OK as far as that goes.
But then there are the permits companies have paid for but haven’t used. Hundreds of millions of dollars’ worth.
The auctions over the past year and a half, including the joint ones with Quebec and California, have sold both current permits and “advance” permits (so companies can lock in prices for permits meant to be used as far out as 2021). In the most recent auction last month, Ontario sold $56 million worth of those.
There’s nothing special about Ontario carbon permits in the joint market. They don’t have little trilliums on them or anything. Since January, ours have gone into a big pile with Quebec’s and California’s, and they all get sold, and we get our share of the proceeds based on how many we put in. Some ended up here and some ended up in the other two jurisdictions, all sold at prices set by buyers who counted on all three governments staying in the program.
Ford dodged a question about whether we’d buy back the permits we’ve already put out, saying companies will be happy they won’t have to buy any new ones. Maybe there’s a plan and Ford doesn’t know what it is. Or maybe we forced the companies to buy the permits, took their money and are about to make the permits worthless and that’s just tough. At the same news conference, Ford mused about regulating gasoline prices because it’s not fair that they go up before long weekends, when demand is high. This is lifted straight from the New Democratic Party’s platform, where it was one of the dumber ideas. Governments do this in a couple of provinces, where the evidence is it leads to more predictable gas prices ... that are higher than they would be without price-fixing.
This is all short-term thinking, slapping at immediate annoyances without considering consequences. None of it makes Ontario look good.
OTTAWA • After a 12-hour filibuster that lasted through the night, the Conservatives ended their voting marathon on Friday morning, announcing they’d used “every tool” they have to force the Liberals to reveal the cost of their federal carbon tax.
But the procedural tactic seems to have brought the Liberals no closer to releasing the documents the Conservatives are demanding. In fact, its only tangible effect has been to delay House of Commons debate on several pieces of legislation, including the Liberals’ cannabis legalization bill, which the Conservatives oppose.
On Thursday, Environment Minister Catherine McKenna said all the provinces must come up with their own carbon-pricing schemes, and it’s difficult to analyze household costs without knowing details of the provincial plans.
The federal government has given the provinces until September to provide those details. Any province that doesn’t come up with its own carbon tax or cap-and-trade scheme will be subject to the federal carbon tax, which will start at $20 per tonne in 2019, rising to $50 per tonne in 2022.
Quebec, Ontario, Alberta and British Columbia already have carbon pricing schemes in place, though Ontario premier-designate Doug Ford announced Friday that he plans to scrap his province’s cap-and-trade scheme and challenge the federal plan as soon as he takes office.
“Today, I want to confirm that in Ontario the carbon tax’s days are numbered,” he said. “In fact, upon the swearing in of my new cabinet at the top of our agenda, the very first item will be to pass an order to cancel the Liberal cap-and-trade carbon tax.”
Eliminating cap and trade will help deliver on a campaign promise to cut gasoline prices by 10 cents per litre, Ford said.
Shortly after exhausted MPs streamed out of the House of Commons around 10 a.m. on Friday, Conservative finance critic Pierre Poilievre said he felt he’d made his point, despite the fact that the government hasn’t coughed up any new documents.
“Sometimes a non-answer is an answer,” he said. “And I think we were able to communicate loudly and clearly that the government has got something to hide.”
On Thursday, Poilievre tabled a motion demanding that the Liberals release all documents calculating the cost to households of the federal carbon pricing plan by June 22. When the Liberals defeated the motion, the Conservatives triggered a string of votes, starting at about 10:30 p.m., that forced the House to sit through the night as punishment. Though the voting could have continued for upwards of 25 hours, the Tories cut short their filibuster after 12 hours — just long enough so that no other business could be conducted in the House of Commons on Friday.
In April, the Liberals released a report estimating that a national carbon price could cut emissions by 80 to 90 million tonnes in 2022 without a significant impact on GDP, but the document doesn’t say how much households stand to be affected.
Poilievre’s motion was based in part on a government memo he obtained using access-to-information laws, which shows the finance department has analyzed the economic impacts of carbon pricing. The department’s findings were redacted. But that memo is dated Oct. 20, 2015, just one day after the Liberals were elected and long before they’d released the details of their carbon pricing plan. It’s unclear what cost analyses have been done since then. The government has calculated that a $50-per-tonne carbon tax will add about 11 cents to every litre of gasoline.