Carbon Pricing in Ontario Begins August 2019
Over the past month, large moves have been made on the fate of the Federal carbon pricing backstop in Ontario. Companies will be seeing a new line item on their Enbridge bills beginning next month, with a $0.0391/m3 charge being added and back-billed to include all gas consumed from April 1st onward.
The Ontario Court of Appeal ruled on the challenge presented by Premier Doug Ford on Friday, June 28th. The challenge, alleging that the Federal Government’s carbon pricing backstop was an unlawful tax, intruding on provincial jurisdiction was rejected by 4 of the 5 judges, forming a majority decision.
Following the decision of the Court of Appeal judiciary panel, the Ontario Energy Board (OEB) released a memo on Thursday, July 4th. The document stated that it had reached a decision on Enbridge Gas/Union Gas’ proposal to add the carbon price on natural gas to its August 2019 bills. The OEB has ordered Enbridge to add a carbon price of $0.0391/m3 of natural gas as a separate line item on their bills, beginning next month. For the month of August, the line item will be back-billed to April 2019.
The Federal carbon pricing backstop was implemented after Doug Ford’s administration scrapped the Cap & Trade program introduced by the previous Wynne-led Government. As a part of their climate change plan, the Federal Government introduced a backstop measure after Ontario was left with no price on carbon, to begin in April 2019. The backstop pricing is expected to remain in effect until at least the beginning of November. With Federal elections taking place in late October, there is the possibility of a new Government coming in, that will repeal or replace the pricing backstop that the current Government has in place. Another possibility is that the decision made by the Ontario Court of Appeal will be challenged and overruled at the Federal level in the Supreme Court of Canada.
For more information on the carbon pricing, how it will affect your business, and what steps you can take to mitigate the cost increase, reach out to us at lclimenhage@ces-energy.com.
