Ontario has just passed legislation. This new legislation will create a cap-and-trade system. It is anticipated to add 5 bucks a month to your home heating bill and about 4.3 cents to the price that you pay for a litre of gasoline, or $8 a month on average.
Under cap and trade, industries are given specific pollution limits, but can sell their emission allowances to other companies if they come in below their annual limit, or buy credits if they exceed it. The province plans to hold its first auction of pollution credits in early 2017, and expects to raise $1.9 billion a year from the plan, promising to use the money to help people and companies transition to a low carbon economy.
The Chamber of Commerce told the Liberals they should delay implementation of cap and trade for one year, saying key questions remain unanswered.
“We need to think about striking a balance between leading, driving and shaping, and not getting so far ahead of our competitors that we just get too far ahead,” Chamber president Allan O’Dette said in an interview Wednesday. “If we get so far out and we lose our competitive advantage, we need to be mindful of that.”
The Progressive Conservatives support the idea of putting a price on carbon to reduce greenhouse gas emissions, but say it should be neutral, and claim the Liberals will use the money generated to balance the books.
Ontario will join existing cap-and-trade markets in Quebec and California starting next January. Manitoba has also signed on to join in the cap-and-trade plan with Ontario and Quebec, but will limit it to 20 large polluters in the province.
The carbon pricing scheme is a big part of the Liberal’s climate strategy, but their official plan won’t be released for a couple of weeks.
Emission allowances will be capped at roughly 142 metric tonnes per year in 2017, which is expected to do down 4.17 per cent each year to 2020, when the Liberals hope to have reach a goal of a 15-per-cent reduction in greenhouse gas emissions over 1990 levels.
But some major Ontario industries will be given a four-year exemption from cap-and-trade, which the government says is necessary to protect Ontario jobs in sectors that compete with jurisdictions without a carbon pricing system.
The Liberals deny a published report claiming their climate change plan would include phasing out the use of natural gas for home heating, and point out they are expanding the gas grid to more rural areas of the province.
BOTTOM LINE: Change is coming….