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  • News
  • January 31, 2017

Cap and Trade: Ontario’s Program to Fight Climate Change

How it will affect you, businesses, and our environment

There has been much discussion in the media and no doubt in casual conversation as well regarding climate change and our government’s leadership in reducing carbon emissions. With last year being the hottest year on record, scientists have identified climate change as one of the biggest threats facing our world today. Ontario has already felt the cost impacts of climate change from extreme weather events that have devastated communities (like the drought of last summer which has impacted our local farmers) it has damaged homes and infrastructure, businesses, crops, and increased insurance rates.

Carbon pricing is now required across Canada following the federal government’s announcement last fall. Our province is moving forward with the Climate Change Action Plan, which includes a cap and trade program that follows the Federal Framework.

Since cap and trade came into effect January 1, 2017 and has been frequently discussed in the media, I wanted to share some information on this program and how it will affect consumers and businesses.

Frequently Asked Questions

What is cap and trade?

Cap and trade, illustrated in this video, sets a limit on the amount of greenhouse gas emissions businesses can release into the atmosphere. This program will also reward innovative companies, and create opportunities for investment in Ontario.

Unlike a carbon tax, cap and trade is an effective way to reduce emissions while building up the economy. This is because cap and trade allows the market to decide where emissions can be reduced with the least cost, while guaranteeing the environmental outcome needed – to cut the pollution that is causing climate change.

How will revenues from the cap and trade be spent?

Currently, cap and trade is estimated to generate approximately $8.3 billion over the next five years. By law, every dollar generated through cap and trade will be deposited in a dedicated account and reinvested into green projects like transit, electric vehicle incentives and housing retrofits that fight climate change. This means every dollar goes back into helping families and businesses successfully make the transition to a low-carbon economy.

To ensure transparency, an annual public report will detail all funds moving in and out of the Greenhouse Gas Reduction Account, and a description of funded initiatives and their alignment with climate change action plans. These requirements ensure proceeds generated from cap and trade are accounted for and used to fight climate change.

How will this affect consumers?

Our province has been upfront with how cap and trade will benefit and cost consumers including how it will affect gasoline and natural gas prices.

Natural gas is expected to see an estimated average monthly increase of $5 in 2017. However, to ease that cost, we’re investing cap and trade proceeds to fund retrofit programs to help homeowners use less energy and save more money. Current natural gas conservation programs can help save households $7 to $11 per month.

With regards to the retail price of gasoline - it is estimated to increase about 4.3 cents a litre. 

What programs and incentives are available to help Ontarians reduce energy costs and conserve energy?

How are businesses being supported?

A strong business sector is important to supporting the province’s economic growth.  Already, we are a global leader in clean technology sector with $8billion in annual revenues, 3,000 companies, and 65,000 employees. Cap and trade will support research, development and commercialization to continue to grow Ontario’s role as a clean technology leader. It will also create conditions for new sectors to emerge and new businesses to thrive.

For existing businesses, we are supporting their adoption of low-carbon technology in a number of ways. These includes supporting the switch to alternative fuel delivery trucks, expanding the Industrial Conservation Initiative, rebating energy-efficient retrofits, and assisting businesses invest in high-efficiency process and equipment upgrades.    

What actions can I take to fight climate change?

Everyone in Ontario has the ability to fight climate change and take advantage of the great opportunities that come with creating a more sustainable, climate-friendly society. Here’s what you can do:

  • Walk, bike or take public transit to get to work, school or to pick up groceries

  • Use reusable containers and water bottles

  • Buy local food where possible - it doesn’t have to travel as far, which reduces greenhouse gas emissions from transportation

  • Compost food scraps, use your organic food recycling bin or ask your condo or apartment building property manager to provide organic food recycling

  • Unplug electronics when you’re not using them

  • Reduce, reuse and recycle - recycling just 1 aluminum can save enough energy to run a TV for 3 hours

If you have any further questions or concerns, please do not hesitate to contact my office at skiwala.mpp.co@liberal.ola.org or 613-547-2385.

Keep in Mind...

This website is provided for your convenience. If you'd prefer to call or email, my staff and I would be happy to hear from you.

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