The recent debate…

The recent debate surrounding the announced cancellation of the Cap-and-Trade program is alarming, with decision made in blatant disregard to the enormous cost of ending such a program.

The great cost of cancelling the program will be felt worst by the Ontario taxpayer.

As catastrophic weather events drive up insurance claims, premiums must rise and Ontario taxpayers will be the ones paying the cost. Worse still are those who will no longer be able to afford insurance and suffer enormous uninsured losses . Will the Ontario government cover those losses or will your taxpayers pay?

As increased drought and crop failure cause political conflict and mass migrations like the recent Sudanese refugee crisis, political stability everywhere is tested. If the Government of Ontario chooses to continue propogating climate change, the Government undertakes a responsibility to all those displaced because of its inaction. Where is Ontario's dramatic increase to refugee support, necessary to satisfy this obligation? Small action is no action. These are not separate issues, they are cause and effect.

Nobel prize-winning economist Paul Romer has stated that carbon taxes are the most economic solution to climate change. What evidence does the Ontario government have that is more credible than the years of thought that went into the decision, and one of the globe's most recognized economists reinforcing that decision?

Ontario committed to the Cap and Trade program with California and Quebec until 2020. Reneging on that agreement will have significant consequences that will be economically and environmentally harmful to Ontarians, and damaging to Ontario’s reputation as a reliable business partner.

Ontario also signed on to the Pan-Canadian Framework on Clean Growth and Climate Change with 9 other provinces. By pulling out of our agreement with the other provinces and the federal government, we leave Canada significantly less likely to meet the commitments we made in Paris, and we also risk losing the $420 million the federal government gave Ontario to help us meet those commitments.

In addition, carbon pricing is now federally mandated and will shortly be paid by Ontarians regardless – So, we will still pay the tax at the pump, but if we don’t have an Ontario-based tax, the Federal Government will collect the tax and determine how the funds are spent! Is that really what we want?

The consequences of an abrupt withdrawal include:

The cost to Ontario taxpayers will be billions of dollars in both hard costs and the loss of projected investments. There’s significant risk of lawsuits from all the affected parties who paid nearly $3 billion into the program and may sue, as well as others who relied upon support from the program to make major investments. Plus the $420 million from the Federal Government. That’s an average of at least $468 per Ontario taxpayer! And likely a lot more.

Even more compelling, millions of dollars’ worth of carbon offset projects slated for development across Canada that were only viable as a result of Ontario’s cap and trade program will no longer occur – projects that would have absorbed or eliminated millions of tonnes of greenhouse gas emissions while creating thousands of jobs.

There’s only a very short term savings at the pump now: The price of gas will be the same by 2019, and rise by a further seven cents per litre by 2020 – out of our control.

Real or planned jobs will be lost – or moved to other jurisdictions, taking Ontario’s jobs with them. Larger clean project investments and research initiatives, supported through cap and trade auction revenue, will no longer materialize. Some regions directly hit include Brampton ($10.3 million), Durham ($40.6 million) Bowmanville ($11.3 million), Haldimand-Norfolk ($10.5 million) Hamilton ($21.0 million), Perth-Wellington ($15.5 million) St. Catherine’s ($46.8 million) and Thunder Bay ($10.4 million).

Proceeds of the money raised through cap and trade were to be used to partially pay for, and incent greater investments, in energy-efficiency improvements to our homes and businesses. Those incentives are already providing countless Ontarians with significant monthly energy savings while supporting thousands of good-paying jobs, such as solar energy installers and roles with clean tech manufacturers. All of those benefits will be lost.

With no incentives to reduce pollution, harmful levels of greenhouse gases will continue to be pumped into our air, further accelerating climate change and associated annual natural disaster losses. These emissions harm everyone who lives in Ontario.
Increased carbon pollution increases health care costs: it means increased asthma and health impacts that result in higher health care system costs.

Withdrawal will inevitably lead to lawsuits and refunds costing Ontario taxpayers billions of dollars in payments to injured parties and legal fees – costs that could be avoided by remaining in the California and Québec cap-and-trade partnership until 2020. It may also lead to trade repercussions with two of Ontario’s largest trading partners.
Withdrawal reduces the confidence that businesses need to invest in Ontario: When Governments break contracts, businesses invest elsewhere.

Cancelling Cap and Trade is a dishonest action, falsely claiming to be in the best interest of the taxpayer. It is not. Cancelling Cap and Trade is a failure of government, a failure of economics, and a failure to look out for the taxpayer. Now is the time to help all Ontarians by keeping Cap and Trade or a similar carbon tax scheme in place. Nothing less will do.