Canada's Ontario government scraps cap-and-trade program

Doug Ford

Doug Ford

Premier Doug Ford made it official Tuesday with his announcement that his government is scrapping Ontario's cap and trade program.

However, it leaves businesses that bought C$2.8 billion ($2.1 billion) worth of allowances in limbo.

"Every cent from the cap-and-trade slush fund is money that has been taken out of the pockets of Ontario families and businesses", Ford said in a written statement, adding he was fulfilling his election promise to scrap the Liberals' "cash grab" created to fund "big government programs" that "do nothing for the environment".

The government says it aims to reduce gasoline prices by 10 cents per litre and lower energy bills, scrapping the plan that forced large companies to buy allowances for their carbon emissions.

Ford's news release also said there will be an "orderly wind-down" of programs funded by cap-and-trade, including incentives for homeowners to make their homes more energy efficient and for motorists to switch to electric vehicles.

"We are getting Ontario out of the carbon tax business", concluded Ford.

"Doug Ford has taken the side of scalper-bots, helping them to rip off and gouge Ontario families without an end in sight", Horwath said.

Berends believes the Ontario government's decision is also going to impact companies that are planning on using their allowances for their obligations towards Quebec and California before the November 1 deadline.

"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", said a statement from the office of Environment Minister Catherine McKenna.

But Ford said businesses will benefit financially from no longer having to buy carbon credits, and Ontario will challenge Trudeau in court.

Some of the number crunchers have estimated that Ford's decision could cost Ontario about $420 million in federal transfer payments that were targeted for environmental programs.