Bill 4, Cap and Trade Cancellation Act, 2018

ERO number
013-3738
Notice type
Act
Posted by
Ministry of the Environment and Climate Change
Transferred to
Ministry of the Environment, Conservation and Parks
Notice stage
Decision
Decision posted
Comment period
September 11, 2018 - October 11, 2018 (30 days) Closed

This consultation was open from:
September 11, 2018
to October 11, 2018

Decision summary

Bill 4, The Cap and Trade Cancellation Act, 2018, received Royal Assent on October 31, 2018. This act repeals the Climate Change Mitigation and Low-carbon Economy Act, 2016, and provides for various matters related to the wind down of the cap and trade program.

Decision details

Bill 4 was introduced on July 25, 2018 and received Royal Assent on October 31, 2018.

The Cap and Trade Cancellation Act, 2018 (CTCA), repeals the Climate Change Mitigation and Low-carbon Economy Act, 2016, and sets out the legal framework for an orderly wind-down of the greenhouse gas cap and trade program including the compensation framework.

Under the CTCA, the government is required to:

  • establish targets for reducing the amount of greenhouse gas emissions in Ontario
  • prepare a climate change plan and progress reports about the plan

The following amendments were made to Bill 4 during the legislative process and are included in the CTCA:

  • allowing the minister for the purpose of taking any steps with respect to the climate change plan, appoint an advisory panel to perform such advisory functions as the minister considers advisable  (for example, providing advice on implementing or revising the plan)
  • ensuring that free allowances were deducted once (rather than twice) when calculating the amount of compensation
  • removing duplication in regulation making authority
  • clarifying the regulation-making authority for prescribing amounts of compensation
  • clarifying the scope of regulation-making authority to limit the compensation for participants that could be made eligible for compensation by regulation
  • technical amendments to ensure accurate reference to participants such as natural gas distributors as well as electricity transmission and distribution providers
  • making electricity generators ineligible for compensation as they had the ability to recover their costs under the program
  • authorizing the reimbursement of expenditures in relation to wind down that were incurred by the Crown prior to the enactment of CTCA in order to ensure that all expenditures related to the wind down of the program and initiatives funded by the cap and trade proceeds prior to enactment of this bill are eligible for funding to be charged against the balance in the Cap and Trade Wind Down Account

Comments received

Through the registry

5,030

By email

6,187

By mail

5
View comments submitted through the registry

Effects of consultation

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.  

Supporting materials

View materials in person

Some supporting materials may not be available online. If this is the case, you can request to view the materials in person.

Get in touch with the office listed below to find out if materials are available.

Cap and Trade Program
Address

40 St Clair Ave West
4th Floor
Toronto ON M4V 1M2
Canada

Office phone number

Connect with us

Contact

Cap and Trade - Help Desk

Phone number
Email address
Office
Cap and Trade Branch
Address

77 Wellesley Street West
10th Floor, Ferguson Block
Toronto ON M7A 2T5
Canada

Office phone number

Sign up for notifications

We will send you email notifications with any updates related to this consultation. You can change your notification preferences anytime by visiting settings in your profile page.

Follow this notice

Original proposal

ERO number
013-3738
Notice type
Act
Posted by
Ministry of the Environment and Climate Change
Proposal posted

Comment period

September 11, 2018 - October 11, 2018 (30 days)

Proposal details

On July 25th, the government introduced the Cap and Trade Cancellation Act, 2018, which, if passed, would repeal the Climate Change Mitigation and Low-carbon Economy Act, 2016 (CCMLEA) and set out the legal framework for an orderly wind-down of the greenhouse gas cap and trade program including the compensation framework.

Under the Cap and Trade Cancellation Act, 2018, the Government is required to establish targets for reducing the amount of greenhouse gas emissions in Ontario. The Minister of Environment, Conservation and Parks is required to prepare a climate change plan and to prepare progress reports in respect of the plan.

With respect to the wind down of the cap and trade program, the matters addressed by the act include the following:

  • The retirement and cancellation of cap and trade instruments.
  • The payment by the Crown of compensation in respect of cap and trade instruments, the amount of which is to be determined in accordance with the regulations. The obligation to pay compensation is subject to various limitations set out in the Act.
  • Preventing any cause of action from arising against the Crown and specified related persons as a result of various specified matters, including the enactment of the Act and the repeal of the Climate Change Mitigation and Low-carbon Economy Act, 2016.
  • The extinguishment of any existing proceedings, and the prevention of any future proceedings, against the Crown and other specified related persons, in relation to specified matters.

Purpose of Act

This proposed act would repeal the Climate Change Mitigation and Low-carbon Economy Act, 2016 and would provide for various matters related to the wind down of the cap and trade program.

Supporting materials

View materials in person

Some supporting materials may not be available online. If this is the case, you can request to view the materials in person.

Get in touch with the office listed below to find out if materials are available.

Cap and Trade Branch
Address

77 Wellesley Street West
10th Floor, Ferguson Block
Toronto ON M7A 2T5
Canada

Office phone number

Comment

Commenting is now closed.

This consultation was open from September 11, 2018
to October 11, 2018

Connect with us

Contact

Cap and Trade - Help Desk

Phone number
Email address
Office
Cap and Trade Branch
Address

77 Wellesley Street West
10th Floor, Ferguson Block
Toronto ON M7A 2T5
Canada

Office phone number