Tories move to scrap cap-and-trade
Minister says legislation will lower gasoline prices by 10 cents per litre
Cap-and-trade will soon be scrapped and paid.
The Progressive Conservative government tabled legislation Wednesday to scrap Ontario’s market-driven environmental alliance with Quebec and California.
And the province expects to be paying out $5 million in compensation as it leaves the joint carbon-pricing auction — a sum critics warn is unrealistically low.
Environment Minister Rod Phillips said the moves should help the Progressive Conservatives fulfill their campaign promise to reduce gasoline prices by 10 cents a litre and could save the average family $260 a year.
“We’re sending a clear message: Ontario’s carbon-tax era is over,” said Phillips, whose government will spend $30 million to fight Prime Minister Justin Trudeau’s national carbonpricing system.
“It’s a punishing, regressive tax that forces low- and middleincome families to pay more,” he said.
Under cap-and-trade, businesses had greenhouse-gasemission limits — or caps — and those who polluted less could sell — or trade — credits for these to those who emit pollution contributing to climate change. Over time, an industry’s cap is lowered to cut pollution, creating an economic incentive to curb emissions.
But Premier Doug Ford was elected on June 7 on a promise to eliminate cap-and-trade, which was introduced two years ago by former premier Kathleen Wynne’s Liberals.
It brought in $1.9 billion annually to the provincial treasury with all proceeds going toward environmental programs such as retrofitting schools and homes and subsidizing electric cars. Those initiatives have already been cancelled.
Phillips said even though 272 companies, such as oil and gas giants, have purchased $2.87 billion in emission credits, he believes the most that will have to be paid out in compensation is $5 million, as the new legislation is designed to inoculate the government against litigation.
As well, only those who were required to participate in the cap-and-trade program and did not pass those costs onto consumers will be eligible for compensation.
“We’re very confident in our position,” the minister said, noting market “speculators” will not be compensated for playing in the carbon market.
Green Leader Mike Schreiner said “it doesn’t sound realistic to me at all” that the government’s exposure could be limited to $5 million.
“This bill is disrespecting the taxpayers because it’s subjecting Ontarians to legal risks that we shouldn’t be subjected to,” Schreiner said.
“By entering into the frivolous lawsuit (against Trudeau’s carbon pricing) that is doomed to fail, they’re going to be wasting more taxpayers’ dollars fighting this at the federal level,” he said.
Schreiner noted companies that bought emission allowances “that have now been cancelled … are going to want to be made whole.”
“My guess is they’re going to engage in legal action against this government.” NDP MPP Peter Tabuns said the government’s claims are “not realistic.”
“We’re going to see higher carbon prices in the coming year, because the federal government’s program is going to cut in,” said Tabuns, pointing out Ontario was exempt from Otta- wa’s plan, because it had capand-trade.
“That’s going to be a problem for a lot of people,” he said.
While the Tories promised to release a plan to reduce carbon emissions later this fall, environmentalists are skeptical.
“If and when this government gets around to making a plan to combat climate change, its hands will be tied by Ford’s opposition to carbon pricing in any form,” said Ecojustice lawyer Charles Hatt. “Neither outcome is good.” Environmental Defence’s Keith Brooks expressed concern that Ontario now has “no plan to fight climate change, no carbon pollution reduction targets, and no carbon pricing system.”
“We are encouraged that the bill introduced today requires the government to develop its own climate plan and carbon emissions reduction targets. Ontario needs to develop and launch this plan as soon as possible,” Brooks said.