At a joint cabinet meeting held in Quebec City in early
June, Ontario Premier Dalton McGuinty and Quebec Premier Jean
Charest signed a Memorandum of Understanding with respect to a
provincial and territorial cap and trade initiative. The accord
sets out the two provinces' plans to create an
interprovincial cap and trade system for the trading of
emissions credits, which could be implemented as early as
The accord explicitly rejects the use of the intensity-based
targets (i.e., per unit of production) such as those used in
the federal government's green plan called Turning
the Corner. Instead, like the Kyoto Protocol, the system
proposed by the two Premiers would set caps based on absolute
greenhouse gas reductions using a 1990 baseline. The federal
framework uses 2006 as its baseline year and, as noted, rejects
hard caps on emissions in favour of intensity-based reduction
The accord invites other provinces and territories to sign
on and "work together collaboratively on the cap and trade
initiative". Further, the Ontario and Quebec Premiers have
stated that they hope their system, once implemented, could
become the foundation for a national cap and trade system.
However, news of the Premiers' plans drew immediate
criticism from federal Environment Minister John Baird, as well
as Prime Minister Stephen Harper, who accused the Premiers of
"political posturing" and suggested that the federal
plan would be more aggressive and get underway sooner.
In addition, the accord contemplates forming linkages with
other North American and international trading schemes, as well
as working with "broader regional trading initiatives
already under development". This could presumably include
linking with the cap and trade scheme currently under
development by the Western Climate Initiative (WCI), an
alliance of seven American states and three Canadian provinces
(Quebec, Manitoba, and British Columbia) that is jointly
developing regional strategies to address climate change.
Ontario has observer status with the WCI.
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