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Ontario Withdraws Support For Canadian Carbon Taxes

Monday, July 16, 2018

Ontario's new government has scrapped the province's cap-and-trade carbon pricing regime, effective July 3.

In his first order of business as Premier, Doug Ford revoked the regulation which had kept the regime in force. The Government will now begin a wind-down of all programs funded out of cap-and-trade revenues. It said that decisions to continue any specific initiatives currently supported by the fund will need to be paid for out of the tax base, and will be made on a case-by-case basis.

The Government will honor arrangements where contracts have already been signed and orders have already been made, such as energy efficient insulation and window retrofits.

The system capped the amount of greenhouse gas emissions that homes and businesses could emit. Companies needed to have enough allowances to cover their emissions if they exceeded the cap, and could buy or sell allowances.

Ford said: "Cancelling the cap-and-trade carbon tax will result in lower prices at the gas pump, on your home heating bills, and virtually every other product that you buy."

"Cap-and-trade and carbon tax schemes are no more than government cash grabs that do nothing for the environment, while hitting people in the wallet in order to fund big government programs," he added.

Ontario is now one of only two Canadian provinces without a carbon pricing policy either in place or due to be implemented. Under the Pan-Canadian Framework on Clean Growth and Climate Change – to which the previous Ontario government was a signatory – the federal Government intends to apply a federal carbon pricing option in provinces without a provincial pricing system in place from this year.

Federal carbon levy rates will initially be set for the period 2018-2022. Rates for each fuel subject to the levy will be equivalent to CAD10 (USD7.62) per tonne of CO2 in 2018, and increase by CAD10 per tonne to reach CAD50 per tonne in 2022.

A statement to CBC from the office of Environment Minister Catherine McKenna said: "The Ontario Government is making it clear that it is not interested in taking climate action, and is effectively withdrawing from Canada's national climate change plan. Canadians expect us to protect the environment and grow our economy, and we are taking action."