Ontario Cap & Trade

Sep 12 2018

Next month, Ontarians will see a change on their utility bills: no more Cap & Trade. The 3.3 ¢/m3 fee that has been applied to utility bills since January 2018 will be removed as of October 1st. The removal of the Cap & Trade program is good news for Canadian businesses. A medium sized company, using 1 million cubic meters a year of natural gas, will see a $33,000 decrease on their yearly costs.

The Auditor General, after conducting an audit of the program, indicated that the cap-and-trade system would have cost Ontario consumers and businesses $8 billion. She went on to say that the carbon pricing program would likely show reductions in emissions by the province of only 3% by 2020. This compared to the emissions reduction target of 15% below 1990 levels that has been set for 2 years from now.

The Federal government has indicated that if the province does not have its own carbon tax in place by September 1st, a date that has now passed by, it will implement its own carbon tax of $20/tonne CO2, effective January 1st, 2019. Premier Ford has indicated that he will fight Ottawa in court over the federally implemented tax. Manitoba, a province hoping to go the same route, has been told by independent legal counsel that the Supreme Court would likely side with the Feds on the ruling.

So what does this mean for Ontario businesses come 2019? Will a mandatory federal carbon tax be implemented, or will it have to pass through the court system first? For more information regarding how the ending of the Cap & Trade program will affect your business, please feel free to contact us.

 

Articles referenced in this post:

Ontario Newsroom 1 2  Global News CBC

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