Bill 4, Cap and Trade Cancellation Act, 2018

Feedback summary 

We received comments from a wide range of interested stakeholders including:

• members of the public
• businesses
• industry organizations
• environmental organizations
• municipalities

Comments can be grouped into the following themes:

• transparency and accountability
• need for an alternative program
• environmental and health impacts
• economic impact
• financial impacts of compensation approach
• provincial leadership
• climate change plan

Of the 11,222 comments received, 6,142 were form letters.

Transparency and accountability

Commenters expressed concerns over the ministry’s consultation approach as well as the amount of information provided in the proposed bill. There were concerns with the ministry not providing details on greenhouse gas emission reduction targets or the number and frequency of progress reports the minister shall prepare in respect of the climate change plan.

Response

The government is committed to transparency and considering the views of the people of Ontario. Our government received a strong mandate from the people of Ontario to cancel the cap and trade program.

Later this fall, we will release a comprehensive, made-in-Ontario environment plan to help protect and conserve our air, land and water, address litter and waste, increase our resilience to climate change and help all of us do our part to reduce greenhouse gas emissions.

Need for an alternative program

Commenters requested an alternative program to be in place or information provided regarding an alternative program prior to the cancelation of the cap and trade program. Commenters also requested that they be provided an opportunity to consult on any future program

Response

Later this fall, we will release a comprehensive, made-in-Ontario environment plan to help protect and conserve our air, land and water, address litter and waste, increase our resilience to climate change and help all of us do our part to reduce greenhouse gas emissions.

Environmental and health impacts

Commenters expressed concerns that cancelling the cap and trade program will have a significant environmental and health impact on present and future generations. Later this fall, we will release a comprehensive, made-in-Ontario environment plan to help protect and conserve our air, land and water, address litter and waste, increase our resilience to climate change and help all of us do our part to reduce greenhouse gas emissions.

Response

Fighting climate change provides openings for us – as a society – to innovate, transform and strengthen environmental safeguards while creating jobs, respecting hardworking taxpayers and growing our economy. The underlying principle of our new plan to fight climate change will be fairness – to taxpayers and businesses.

The government’s vision for Ontario includes the development of a better, more balanced plan to fight climate change and keep our air, land and waters clean for future generations. Later this fall, we will release a comprehensive, made-in-Ontario environment plan to help protect and conserve our air, land and water, address litter and waste, increase our resilience to climate change and help all of us do our part to reduce greenhouse gas emissions.

Economic impact

By scrapping the cap and trade program, households will save approximately $260 per year on average. This includes $190 in savings directly from lower fuel costs at the pump and lower natural gas in homes, and another $70 per year in savings on lower prices on all goods and services. Cancelling the program will result in 8,300 more jobs across the province by 2021.

Commenters expressed concerns about the potential negative economic impacts caused by cancelling the cap and trade program including lost opportunities in the green/clean technology sector and future infrastructure projects and the provincial government’s decision to challenge the federal government’s carbon tax.

Response

As part of our made-in-Ontario plan, there will be an emissions reduction fund to invest in new technologies. This approach will also focus on actions that improve the business climate and facilitate private investment in these new technologies, especially in the energy sector. That means finding new, more affordable ways to cut emissions, reduce pollution and contamination in our air, water and communities.

The province is challenging the federal government’s plan to impose a carbon tax on Ontario families. Instead of creating and protecting jobs – the federal government’s plan will burden Ontario’s economy and chase jobs out of the province.

Ontario is developing a responsible and transparent plan to wind down the cap and trade program that would have a minimal impact on taxpayer dollars while offering some support for eligible regulated participants of Ontario’s cap and trade carbon tax program. The Cap and Trade Cancellation Act includes a compensation formula, and a separate compensation regulation will be developed.

Financial impacts of compensation approach

Commenters expressed concerns that market participants are ineligible to receive compensation. Commenters also expressed concerns about the compensation formula with respect to allowances distributed free of charge being deducted twice.

Response

The compensation approach recognizes that regulated participants may have purchased allowances to comply with the regulation whereas market participants without a compliance obligation chose to take risks as market traders and speculators.

Ontario amended Bill 4 to address the concern regarding free allowances in the compensation formula to remove the double deduction.

Provincial leadership

Commenters expressed concerns about Ontario no longer being a leader in sustainability and green economy. Concerns were also expressed about not being able to meet international greenhouse gas emission reduction commitments.

Response

Ontario will continue to do our part in reducing greenhouse gas emissions and preventing the worst potential effects of climate change from becoming a reality. We will continue championing for the environment by balancing responsible, modern environmental stewardship with efficiency and respect for taxpayer dollars.

Ontario’s total greenhouse gas emissions have dropped by 22 per cent since 2005 – even while the rest of Canada saw emissions increase by 3 per cent during that same time. In fact, most of Canada’s progress towards its 2030 Paris targets has occurred in Ontario.

Ontario’s new actions to fight climate change will include an emissions reduction fund to invest in new technologies. The government will focus on actions that improve the business climate and facilitate private investment in these new technologies.

Climate change plan

Commenters acknowledged the government’s commitment to creating a climate change plan with greenhouse gas emission reduction targets.

Response

Climate change is a global problem driven by greenhouse gas emissions from human activities. It presents challenges for our air, water, land, homes and businesses, local grown food and crops, not to mention the wear and tear it puts on outdated infrastructure and technologies.

We must create resiliency against the effects climate change is already having on households, businesses, communities and public infrastructure. We must also curb our greenhouse gas emissions as part of the long-term, global solution to prevent the worst potential effects of climate change from becoming reality. Later this fall, we will release a comprehensive, made-in-Ontario environment plan to help protect and conserve our air, land and water, address litter and waste, increase our resilience to climate change and help all of us do our part to reduce greenhouse gas emissions.