Ontario's cap and trade carbon tax is now at death's door with the announcement that the provincial government has introduced legislation to end the program.
Minister of the Environment, Conservation and Parks Rod Phillips announced the legislation on Wednesday and said the elimination of carbon taxes will save the average Ontario family $260 per year. He said it will also help to reduce gas prices by 10 cents per litre.
"Ontario’s carbon tax era is over. Cancelling the cap-and-trade carbon tax is the right thing to do, a good thing to do and one more example of a promise made and a promise kept," Phillips said in a statement.
As a result of the move by the Tory government, all programs currently funded through the cap-and-trade carbon tax have been cancelled, which includes immediately winding down the Green Ontario Fund.
Premier Doug Ford campaigned during the spring election to end the cap-and-trade program that was introduced by the former Liberal government.
Back in June, Opposition Leader Andrea Horwath asked the province's financial accountability officer to look into how much it will cost the province to cancel the cap-and-trade program.
With Ontario leaving the cap-and-trade market, it is unclear if the province will be on the hook to reimburse $3-billion in emissions credits that were auctioned and bought by businesses. It is also unknown what the costs or penalties will be for ripping up contracts and agreements Ontario has entered into with Quebec, California and other industries currently in the cap-and-trade market.
The Environment Ministry said the new legislation will include a plan to compensate eligible participants of the program and will detail measures to help replace the program with "a better plan for achieving real environmental goals." However, those details have yet to be disclosed by the province.
"The elimination of the cap-and-trade carbon tax will remove a cost burden from Ontario businesses, allowing them to grow, create jobs and compete around the world," the ministry said in a news release.
Despite the newly introduced legislation, the federal Liberal government under Prime Minister Justin Trudeau has previously stated that any province that does not have a carbon pricing scheme will have the tax imposed on them.
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