The Ontario government just passed legislation this afternoon to finally repeal Ontario’s cap and trade system. Doug Ford has officially delivered on another promise - to eliminate the climate policy in his fight against the carbon pricing plan, as both were too costly.
This decision comes two weeks after the Financial Accountability Office released a report noting that over the next 4 years, cancelling the cap and trade program will cost Ontario $3 billion in lost revenue.
But, according to an Ontario government news release, this means good news for Ontarians. Repealing the cap and trade carbon tax will lower gas prices, save the average family $260 every year, and will remove additional obstacles for Ontario businesses to prosper. Many critics, however, argue this decision is a huge step back from trying to minimize our harmful impact on climate change.
Cap and trade is essentially a climate policy designed to reduce harmful climate emissions. The cap puts a limit on pollution and the trade aspect lets companies buy and sell rebates as necessary to match their spending.
Companies who spend more, pay more. This encourages corporations to cut down on pollution and emissions in the cheapest ways to conduct their business.
That being said, Ford’s government wanted to cut the program even sooner as they planned to in July. But legal action against them pushed back the final vote. An environmental group asserted the Bill had broken Ontario’s Environmental Bill of Rights by not holding public consultations on the issue.
Trying to move forward, the government began holding public consultations right away. Concluded in mid-October, the results of the consultations still have not been publicly released. Subsequent legal action against the government now alleges it has also failed to hold mandatory consultations on regulations related to repealing cap and trade.
Opposing parties have also raised concerns that Ford’s government may be responsible for billions of lost dollars to compensate permit holders. In response, the PCs said they will spend up to five million dollars in payouts for the affected companies.
Criteria for reimbursement of costs have been laid out in the legislation that just passed. The government has announced that only those companies that purchased more than they used while the program was still ongoing (and were not able to break even with their consumers) will be eligible for reimbursement.
What’s more is the legislation further protects the province in case of any following litigation regarding the decision. Ontario's environmental watchdog has criticized PCs for dismantling the program without proposing an effective climate change program in its place. However, Environment Minister Rod Phillips has said he would present a new climate change plan come this fall.