Ford set on scrap­ping cap-and-trade

In­com­ing pre­mier’s pledge caus­ing con­cern in Que­bec


TORONTO — A spokesman for Doug Ford says On­tario’s in­com­ing pre­mier is de­ter­mined to de­liver on his cam­paign prom­ise to scrap the “dis­as­trous” cap-and-trade sys­tem and fight a fed­eral car­bon tax.

Ford’s pledge is caus­ing con­cern in Que­bec, a prov­ince that in­tro­duced a cap-and-trade sys­tem in 2013 and shares a car­bon mar­ket with On­tario and Cal­i­for­nia.

Ford, whose Pro­gres­sive Con­ser­va­tives won a ma­jor­ity of seats in the On­tario leg­is­la­ture, is cur­rently meet­ing with his tran­si­tion team to se­lect his cab­i­net and pre­pare for his of­fi­cial swear­ing-in on June 29.

Que­bec’s en­vi­ron­ment min­is­ter, Is­abelle Me­lan­con, says she is watch­ing closely to see who Ford will ap­point as her coun­ter­part and plans to stress the ben­e­fits of the cap-and-trade sys­tem.

She says Que­bec Pre­mier Philippe Couil­lard did not raise the is­sue when he met with Ford a few days ago, but the two are set to meet again in July dur­ing the Coun­cil of the Fed­er­a­tion, an an­nual meet­ing of pro­vin­cial and ter­ri­to­rial lead­ers.

A spokesman for Ford says the Tory leader is also com­mit­ted to fight­ing fed­eral rules set to kick in next year that re­quire prov­inces to have car­bon pric­ing in place — rules al­ready be­ing chal­lenged by the gov­ern­ments of Saskatchewan and Man­i­toba.

“Doug Ford is com­mit­ted to stop­ping Justin Trudeau’s car­bon tax and pulling On­tario out of the dis­as­trous cap-and-trade scheme,” said Jeff Sil­ver­stein. “Doug Ford cam­paigned on this prom­ise and he will de­liver for the peo­ple of On­tario.”

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.

The cap de­clines about four per cent each year to 2020, and as it de­creases, the gov­ern­ment hopes com­pa­nies have more in­cen­tive to cut their emis­sions.

On­tario has made close to $3 bil­lion in a se­ries of auc­tions since the sys­tem was in­tro­duced last year.

Asked what it would mean for Que­bec if On­tario pulled out of the car­bon mar­ket, Me­lan­con said it was too early to com­ment on that pos­si­bil­ity.

“I want to have those dis­cus­sions be­fore talk­ing about a pos­si­ble withdrawal,” she told The Cana­dian Press in French. “There are in­ter­na­tional treaties, we have sig­na­tures with the Western Cli­mate Ini­tia­tive, that are im­por­tant,” she said.

“Que­bec has al­ways been a leader when it comes to fight­ing cli­mate change. We would like to con­tinue to do so ... with On­tario by our side in this car­bon mar­ket,” she said.

States such as Oregon and Vermont, as well as ju­ris­dic­tions such as Mex­ico, are cur­rently in­ter­ested in the car­bon mar­ket, she said, adding that cap and trade is ex­pected to raise bil­lions for green en­ergy projects in Que­bec over time.

Ford has con­sis­tently op­posed car­bon pric­ing and has come un­der fire for fail­ing to ex­plain how he would make up for the lost rev­enue.

If Ford gets rid of cap and trade, the fed­eral mea­sures will kick in, said Univer­sity of Cal­gary eco­nomics pro­fes­sor Trevor Tombe.

Those in­clude a car­bon tax that af­fects peo­ple’s heat­ing bills and what they pay at the gas pumps, and a sep­a­rate one for large emit­ters who are es­sen­tially the same en­ti­ties cov­ered by On­tario’s ca­pand-trade sys­tem, he said.

Firms that hold com­pli­ance per­mits in On­tario un­der the ca­pand-trade sys­tem would be able to use them un­der the fed­eral sys­tem, he said.

“In terms of tim­ing, there’s more grad­ual ways of do­ing it that might be less of an ad­min­is­tra­tive bur­den and that is to time the tran­si­tion for when the cur­rent batch of per­mits ex­pires,” which would be af­ter 2020, he said.

Ford could, how­ever, take a mid­dle-ground ap­proach and sim­ply elim­i­nate the por­tion of cap and trade that ap­plies to fuel dis­trib­u­tors, which would lower the price of ga­so­line — a key com­mit­ment the Tory leader made dur­ing his cam­paign, Tombe said.

“I would go that half­way route, I would carve out fuel dis­trib­u­tors — that would be in­cred­i­bly easy to do and could be done in­stantly — but I would keep the cap and trade for all other large emit­ters,” Tombe said. That would al­low Ford to show he is tak­ing ac­tion on cli­mate change.

“That would make it very easy for the feds to snap in their back­stop be­cause they wouldn’t need to ap­ply the large-emit­ter sys­tem in On­tario,” he said.

Mean­while, an eco­nomic paper is­sued Wed­nes­day by the Mon­treal Eco­nomic In­sti­tute, a non-profit think-tank, says the cap-and-trade sys­tem won’t help re­duce green­house gas emis­sions un­less the price of car­bon in­creases dra­mat­i­cally.

Car­bon cur­rently costs roughly $20 per tonne, with the price ex­pected to rise to $30 to $100 per tonne by 2030, but even that won’t be enough to bring down emis­sions, the or­ga­ni­za­tion says, pre­dict­ing that peo­ple will sim­ply pay more and con­tinue to pro­duce as much gas.

A sig­nif­i­cant in­crease in cost may suc­ceed in dis­cour­ag­ing emis­sions, the paper sug­gests, but would likely lead busi­ness to up­root for ju­ris­dic­tions with more le­nient rules.

In or­der to cut green­house gas emis­sions, gov­ern­ments must take a global ap­proach, said Mark Milke, a pol­icy an­a­lyst and the paper’s co-au­thor.

“You have to look around the world and say, ‘OK how can we, in con­junc­tion with other ju­ris­dic­tions, get (emis­sions) down,’ which would man­date a re­think of cur­rent pol­icy,” he said. “Or you wait for tech­nol­ogy to solve the prob­lem.”


On­tario pre­mier-elect Doug Ford walks out onto the front lawn of the On­tario Leg­is­la­ture at Queen’s Park in Toronto on Fri­day. A spokesman for Ford says he is de­ter­mined to de­liver on his cam­paign prom­ise to scrap the “dis­as­trous” cap-and-trade sys­tem and fight a fed­eral car­bon tax.

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