October 11, 2018 Cap and…

October 11, 2018

Cap and Trade Branch
77 Wellesley Street West
10th Floor, Ferguson Block
Toronto, Ontario M7A 2T5

Re: Bill 5, Cap and Trade Cancellation Act

To Whom It May Concern:

Thank you for the opportunity to review and comment on Bill 4, Cap and Trade Cancellation Act (EBR# 013-3738). The Ontario Mining Association (OMA) works to support and improve the competitiveness of the mining sector in the province, while representing companies engaged in the environmentally responsible exploration, production and processing of minerals in Ontario. Our members strive for a balance between serving local communities and the economic needs of the province by remaining competitive in global markets, and protecting the natural environment to ensure a sustainable future. The OMA has a long history of working in concert with the government and other partners to achieve these vital and often challenging goals.

We stand ready to work in partnership with the Ontario government on achieving your environmental objectives and respect the decision to wind down the province’s cap and trade program. The OMA shares the government’s interest in addressing climate change in a way that is fair, transparent, and accountable. Our members support a tactical means to address climate change through proven scientific initiatives, while continuing to foster a competitive business climate to grow the economy.

The OMA supports the government’s commitment to prepare a climate change plan and progress reports in respect to that plan, and we would be pleased to contribute to this effort. In the meantime, we ask that the wind down of the cap and trade program be conducted in a transparent and orderly fashion, with clear rules and objectives, enabling regulatory certainty and clarity for the mining sector. Unfortunately, our sector is facing considerable uncertainty and risk of increased costs of doing business in the immediate future. This is because, as part of the Pan-Canadian Framework on Clean Growth and Climate Change, the federal government set a carbon pricing “benchmark” that all Canadian jurisdictions must meet. If Ontario’s wind down of cap and trade system leaves it without a carbon pricing system that meets the benchmark, the province will be required to adopt the federal carbon pricing system, or backstop, starting on January 1, 2019.

Since OMA members will thus have a legal obligation to pay carbon tax under the federal regime, we will face significantly higher rates than we did previously, under Ontario’s cap and trade program. In addition, mines that participated in the cap and trade program will be out of pocket for the allowances they purchased. Since the mining sector is a price taker on the commodities markets, we were unable to pass along the cost of these allowances to our consumers. We ask that you take this into consideration, providing the required support to Ontario mining companies, as you move ahead with implementing your commendable “Open for Business” agenda in Ontario. We trust that a reduced administrative burden and lower operating costs for industry, as well as outcome-oriented environmental action, will factor into policy decisions aimed at making our industry globally competitive.

The OMA vision is to make Ontario mining the cleanest, most productive, technologically-advanced and socially responsible in the world. Innovation is widely considered to be a very important determinant of global competiveness and future success. Our members are focused on continual improvement and have contributed to the growth of the green economy in Ontario by making significant investments in products and processes that decrease pollution and GHGs. These investments resulted in tangible reductions in yearly C02 emissions. Thus, we applaud the government’s plans to replace the GreenON fund with another emissions-reduction fund to “invest in new technologies to reduce emissions right here in Ontario.” Our sector has been at the forefront of adopting green technologies that simultaneously reduce GHGs, improve health outcomes for workers, and increase productivity. The implementation of these projects is critical to advancing the potential of the Ontario mining sector, as they have helped facilitate environment-protecting innovations like mine electrification, while increasing productivity in our mines.

The use of advanced technologies has not only made Ontario cleaner, but it has also made our jurisdiction a world leader in mining. One of our members, Goldcorp, made headlines all over the world with its Borden mine, seen by many as a ‘mine of the future.’ Goldcorp views digitization, low carbon energy technologies, renewable energy, and a focus on inclusion and consultation with local communities as the underpinnings of this new mine’s viability, sustainability and profitability. Moving away from diesel equipment in the underground mine greatly improves working conditions and reduces GHG emissions by more than 70%, which also increases the productivity of the mine. Borden is poised to become the first all-electric mining operation in Canada, and is already a model for others to follow.

We strongly encourage the government to invest in innovation and to consider emerging technologies when modernizing government regulations. We view this as a means to help our mining companies drive cost reductions, mitigate and manage risks, build on success stories like Borden, and attract investment – positioning Ontario for future growth.

Thank you again for the opportunity to comment on the Cap and Trade Cancellation Act. In addition to our written submission, we welcome the continuation of a mining industry and company-specific consultation process.

Sincerely,

Aynsley Foss
Membership and Government Relations Coordinator