On Monday April 13th, 2015, Ontario Premier Kathleen Wynne
announced that the province is introducing a cap and trade system
for greenhouse gas emissions ("GHG"). The system will
have a hard ceiling on the total GHG emissions allowed in each
sector of the economy. It will be designed to reduce the amount of
GHG's emitted in Ontario by setting a limit on emissions, while
at the same time providing incentives for energy efficient and
innovative companies to make further investments in GHG
The Premier signaled that Ontario will join the cap and trade
system under the Western Climate Initiative, a group of (originally
western) North American states and provinces focused on climate
change reduction measures. She also indicated that the government
will reinvest the money raised through the cap and trade system
back into projects that reduce GHG's. Such projects may include
energy-efficient appliances or housing, public transit, and energy
efficiency initiatives for industry.
Next Steps: The Design of the Cap and Trade System for
The government background documents that accompanied the
Premier's announcement indicate that the "province will
work with communities and consult with industry on the design of
the cap and trade system over the next six months". In
addition, the Ontario government will align its cap and trade
system with those in Québec and California which are more
The basic design features of the Ontario cap and trade system
will follow that of the Western Climate Initiative where a cap sets
a maximum amount of GHG's measured in tonnes that industry will
be allowed to produce. Over time, the cap or ceiling will be
lowered which will result in lowering overall GHG emissions.
Trading of GHG's will be allowed in a market established for
companies to buy and sell GHG credits depending on their GHG
emissions. If their GHG emissions exceed their cap then companies
can purchase credits from more efficient companies that sell their
credits into the GHG market.
Coming Events: Climate Summit of the Americas
With this recent news as the backdrop, Ontario is hosting a
"Climate Summit of the Americas" between July 7th
and 9th, 2015 in Toronto with Pan-American jurisdictions. The
Ontario Government has stated that the purposes of the summit
include working "towards common approaches to reducing
greenhouse gas emissions... and highlight[ing] opportunities for
investing in a global low-carbon economy."
Implications: Stay Tuned
The implications of the introduction of a cap and trade system
in Ontario are as yet unknown. Different business activities will
be subject to varying impacts, some positive and some less so. As
more details become available, and potential impacts of the system
are able to be predicted, it will be important for industry and
other stakeholders to keep on top of developments in this area and
to provide comments to the Government of Ontario.
Ontario's Ministry of the Environment and Climate Change continues to roll out its Climate Change Action Plan with its proposed GHG guide for projects that are subject to the province's Environmental Assessment Act.
The Imperial Oil refinery pled guilty to one offence for discharging a contaminant, coker stabilizer, thermocracked gas, into the natural environment causing an adverse effect and was fined $650,000...
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