KEPT IN DARK OVER CAP ’N’ TRADE COSTS

Toronto Sun - - NEWS - LORRIE GOLD­STEIN lgo­ld­stein@post­media.com @sun­lor­rie

KATH­LEEN WYNNE

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 — $1,501,908,017 to be pre­cise — 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 cap and 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 cap and 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% higher, than the gov­ern­ment es­ti­mate of $156 per house­hold in 2017.

While the gov­ern­ment says it’s us­ing some rev­enues from cap and trade 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 is keep­ing that se­cret for two years.

We don’t know whether 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 cap and trade, cov­er­ing us with ma­nure and keep­ing us in the dark.

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