On the eve of a provincial premiers summit on climate change,
the Ontario Government has announced it is joining with Quebec and
California in a greenhouse gas ("GHG") cap-and-trade
system. Ontario, Quebec and California are members of the Western
Climate Initiative and represent a carbon market of 61 million
North Americans. Ontario joining Quebec to form a linked carbon
market will cover over 60% of Canada's population.
Earlier this year, Ontario initiated a 45-day comment period on
its prospective climate change policy direction.
The principle policy divide facing any market is whether to adopt a
carbon tax mechanism or a cap-and-trade mechanism. British Columbia
has adopted a carbon tax that taxes every tonne of GHG released as
a result of fossil fuel combustion. Ontario has now decided to
proceed down the same path as Quebec. Ontario set the table for
this announcement by passing Ontario Regulation 452/09
under the Environmental Protection Act.
Ontario Regulation 452/09 requires certain Ontario-based
facilities to report their GHG emissions and has done so since
The agreement with Quebec only features general principles at
this point. Highlights include:
A hard ceiling on the GHG emissions
allowed by each sector of the economy.
The proceeds raised from the Ontario
system will be reinvested in projects that reduce GHG emissions.
The Ontario government is promising transparency in this
Like virtually all cap-and-trade
systems, the Ontario version will reward companies that reduce
their own GHG emissions.
The next step is to finalize the
details regarding joining an integrated Quebec/California
Critics have complained that Canada is lagging behind other
nations in taking real, material steps to reduce GHG emissions.
Ontario's Environment Minister, Glen Murray, has been critical
of Ottawa's approach to the issue and this step (along with
other provincial initiatives) is seen as filling the policy gap.
Minister Murray stated that further public consultation will be
conducted and the final systems details will be completed by
The Bennett Jones Climate Change & Emissions Trading Group
is Canada's leading group of skilled, experienced lawyers in
this sector. Our lawyers are actively advising participants in
British Columbia, Alberta and Quebec – Canada's current
"live" GHG compliance markets.
As details emerge regarding Ontario's proposed cap-and-trade
system, Bennett Jones will be holding client seminars to present
best-practice approaches to compliance options and monetizing
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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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.
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