The cap and trade program…

The cap and trade program created incentives for industry and consumers to reduce their carbon footprint by making the polluters pay. The money was paid for the purchase of credits, which in turn were returned to consumers in energy-efficiency programs, which helped offset the cost of things like home improvements to improve a home's energy efficiency. The credits were also used to fund school improvements and offset the taxes that would have been needed to pay for them. Some of the schools that were to take advantage of this funding were in serious need of repair. One, for example, was to take advantage of the program to replace lead pipes. In that school, without the funding, the staff will have to continue to run the water for half an hour every morning before the children are able to use it for washing. Children in that school are not allowed to drink the tap water.

These energy-efficiency programs created jobs in the clean economy, and their cancellation has hurt many businesses, in window replacement and insulation businesses for example.

Ottawa had already approved funding for seven Ontario programs under the Low Carbon Economy Leadership Fund, but all of that money is now on hold. The cancellation of the Green Ontario Fund, means the province has forfeited $100-million in federal money, and $420-million earmarked for Ontario under the Low Carbon Economy Leadership Fund is under review.

There is broad consensus that putting a price on carbon is the best way to reduce greenhouse gas emissions. Ottawa intends to impose a minimum price on pollution through a carbon tax on any province that hasn’t got its own system in place, beginning in January. It is the opinion of many legal analysts that the province will lose its tax-payer funded legal challenge of Ottawa's tax.

The Ontario government can also expect legal challenges from holders of the 758 renewable-energy contracts it cancelled, and from companies that purchased $2.9-billion in emission allowances under the cap and trade plan. Win or lose, these legal challenges will become a burden for tax payer.

Will any business want to invest in Ontario, knowing that the government will cancel contracts or change policy without notice or a wind-down period?