Cap-and-trade scheme keeps Ontarians in dark

Did you know Ontario Premier Kathleen Wynne’s government has taken $1.5 billion extra out of our pockets since the start of this year?

By “extra,” I mean money her government wasn’t taking from us in 2016, from all sources of government revenue.

This $1.5 billion extra comes from Ontario’s new cap-and-trade carbon pricing scheme.

It’s money Ontario businesses have paid the Wynne government to date in 2017 for carbon allowances in three government-run auctions held March 22, June 6 and Sept. 6.

These allowances, with a fluctuating market price per allowance of $18.03 to $18.72 per tonne of emissions, permit businesses to emit greenhouse gases linked to climate change.

Since they pass along their increased costs to us, Wynne’s government has essentially charged us a $1.5 billion carbon tax so far this year.

It’s hidden in increasing retail prices for most goods and services, since most consume fossil fuel energy.

But since retail prices rise for many reasons, it’s impossible to know how much cap-and-trade is costing each of us, personally.

The government’s take from capand-trade this year will be about $2 billion — its initial estimate — after Ontario holds its fourth and final auction of carbon allowances for 2017 in December.

The government tells us that in 2017, cap-and-trade will cost the average Ontario household 4.3 cents more per litre of gasoline, or $8 per month, and $5 a month more for home heating fuel (natural gas).

That’s an added total cost of $13 per month, or $156 in 2017, for the average household for these two items.

But natural gas companies have already told their customers the average cost of cap-and-trade per household in 2017 will be up to $6.70 per month, not $5.

More significantly, cap-and-trade doesn’t just raise the cost of gasoline and natural gas, but of almost everything.

Based on government information supplied to date, Auditor General Bonnie Lysyk estimates the average cost of cap-and-trade per household will rise to $210 in 2019 in direct costs, plus another $75 in indirect costs.

But the government’s own numbers suggest the costs may be even higher.

According to the 2016 census, Ontario has 5,598,391 households.

Using the government’s figure of a $156 average cost per household for cap and trade in 2017, that totals $873,348,996 (156 times 5,598,391).

That’s $1,126,651,004 short of the $2 billion the government expects to make from cap-and-trade this year.

So, unless the government has convinced businesses not to pass along their increased costs for capand-trade to us in higher prices, the cost per average Ontario household this year is an estimated $357 ($2 billion divided by 5,598,391 households).

That’s $201 more, or 129 per cent higher, than the government estimate of $156 per household in 2017.

While the government says it’s using some revenues from cap-andtrade to defray costs to us, we don’t know how many free allowances it’s giving to more than 100 companies, which will receive them annually from 2017 to 2020.

The government says that’s necessary to keep them from moving to jurisdictions without a national carbon price, like the U.S., but has provided no evidence all these companies need all these free allowances.

We don’t know how many free allowances the government gave out to these companies or others in what it says is recognition they reduced emissions before cap-and-trade.

We don’t have the complete list of companies receiving free allowances, or how many allowances they received. The government’s keeping that secret for two years.

We don’t know if companies receiving free allowances are adding the costs to their retail prices as if they had paid for them, as has happened elsewhere.

A skeptic might say the government is treating us like mushrooms on capand-trade, covering us with manure and keeping us in the dark.