The end of cap and trade will cost Ontarians money

The people of Ontario have yet one more reason to loathe Doug Ford’s ill-conceived decision to kill the province’s cap-and-trade program — and it’s a doozy.

Until a few days ago, we all knew the Progressive Conservatives had scrapped a comprehensive initiative to fight climate change while, as of yet, offering nothing in its place.

Likewise, it was clear that dozens of worthwhile infrastructure initiatives to upgrade public facilities while making them more environment-friendly had been tossed in the dumpster, too.

But as of last week, thanks to a number-crunching report from the province’s Financial Accountability Office, Ontarians have learned to their dismay that the cost of cancelling cap and trade will far exceed any savings that come from the move.

In fact, in doing this, Premier Ford has punched a $3-billion hole in the provincial budget over the next four years, according to budgetary watchdog Peter Weltman.

“The province’s budget balance worsens because the loss of cap-and-trade revenue from ending the auction of emission allowances is greater than the savings achieved from cancelling cap-and-trade-related spending programs,” Weltman explained.

The response from Environment Minister Rod Phillips was as bizarre as it was feeble. He said the $3-billion hit is actually money “back in the pockets of Ontario taxpayers.”

According to the minister’s tortured math, Ontarians need not worry about how all this will increase the province’s deficits because they’ll be spared from helping cover the costs for cap and trade, which forced large companies to buy allowances for their carbon emissions.

But surely Ontario’s deficit, which the Tories like to point out is far greater than the previous Liberal government had indicated, must be dealt with before it becomes a fiscal crisis.

Fattening that deficit by axing cap and trade will only make it harder for the government to make spending cuts — and for the public to absorb them.

In the meantime, the money Phillips insists will be back in taxpayers’ pockets could prove illusory.

However much he huffs and puffs, Ford won’t be able to wriggle out of Prime Minister Justin Trudeau’s carbon-pricing scheme that will be imposed upon any province that lacks a carbon plan of its own. Now that Ford has ended Ontario’s carbon plan, this province falls into that category. And that will eventually cost Ontarians more than the program Ford scrapped.

“Beginning in 2020, the federal carbon-pricing backstop will result in increased costs to Ontario households and businesses, but will also generate more … revenue,” Weltman said.

Under the cancelled cap-and-trade plan, he estimates a typical Ontario household would have paid additional costs of $264 in 2019, rising to $312 in 2022.

But if, as seems likely, the federal carbon tax is imposed, that typical Ontario household would pay $258 in extra costs in 2019, rising to $648 in 2022.

It is, of course, possible that the Trudeau Liberals could refund some of that money directly to Ontario taxpayers. Nor is it clear what the Ontario government’s replacement climate-change plan will look like when it’s unveiled later this year. The environment minister has pledged, however, that new taxes will not be part of any plan.

For now, it looks as if the Ontario treasury is worse off, Ontario taxpayers could soon be worse off and this province’s efforts to keep the planet’s temperature from rising have stalled.

The Tories fiddle on climate change. The planet — as the summer past will attest — burns.