Entries in Cap and Trade (3)


OCC: Concerns about Cap and Trade; asks for delay

In a letter dated May 12, 2016, the Ontario Chamber of Commerce (OCC) sent a letter to Minister of
Environment and Climate Change Glen Murray asking for a one year delay in the Cap and Trade program to 2018 and for clarity on four main issues:  


  1. What will be the economic impact of the cap and trade system?
  2. How will cap and trade revenue be invested and administered?
  3. How, and when, will offsets be available?
  4. What will the cap and trade system look like after 2020?


The letter speaks to businesses feeling "uncertain about the incoming cap and trade system and unprepared for its full implementation next year."

It goes on to state, that in order "to produce the most effective environmental and economic outcomes, it is important that government takes the time to get the design of  cap and trade right.”

The letter is in response to the recent introduction of Bill 172, Climate Change Mitigation and Low-carbon Economy Act, 2016.

The OCC thanks the government for their continued engagement with the business community and appreciates the steps toward transparency as it pertains to the Greenhouse Gas Reduction Account.  

The business advocacy group "understands the need to address climate change and will continue to contribute to the conversation."

Read the letter


A Summary of Legislation Passed at Queen's Park in the Spring Sitting

Yesterday, the Legislative Assembly of Ontario rose for summer break and will resume sitting on September 14. With the 2015 Ontario Budget passing the legislature on June 3, we have written a summary of the government’s spring session and highlighted how the Chamber Network has helped shape policy.

In short, the passing of the 2015 Ontario Budget provides a very clear reminder that the cumulative regulatory burden poses a significant challenge to Ontario businesses. Over the past few months, the OCC has advocated for a business climate that fosters investment and growth through our submissions to government on issues like the review of the Ontario College of Trades, cap and trade, and the Ontario Retirement Pension Plan.

The following is a breakdown of some of the major pieces of legislation that have been passed over the spring legislative session.

Ontario to Roll Out a Cap and Trade System
April 13

On April 13, 2015 the government announced its intention to move forward on a cap and trade system to reduce greenhouse gas emissions (GHGs).

With the support of over 30 chambers of commerce and boards of trade, our network outlined its initial concerns with the cap and trade system through a written submission to government.

The OCC will continue to work with government to ensure they consider the impact that the cap and trade system will have on the economy and job creation. We are in the initial stages of determining an impactful approach on this file.

Ontario Retirement Pension Plan Enters Design Stage
April 29

On April 29, 2015, the Ontario Retirement Pension Plan Act was passed. The Act forms the foundation of the Ontario Retirement Pension Plan (ORPP), which is slated to take effect by January 1, 2017.

The Chamber Network has been relentless in challenging government over the ORPP. In a huge win for the Chamber Network, the government has already agreed to our request that the plan be submitted to a full cost-benefit analysis.

Just this week, the OCC sent a letter to Premier Wynne signed by over 150 businesses, sector associations, chambers of commerce, and boards of trade that urges the government to expand its definition of pension plan comparability. The Chamber Network continues to lead the conversation on the ORPP.

Pooled Registered Pension Plans Bill Passes the Legislature
May 26

The Pooled Registered Pension Plans Act was passed on May 26, 2015. The Act creates a framework for Ontario businesses to offer Pooled Registered Pension Plans (PRPPs) to their employees, as well as make PRPPs available to the self-employed. PRPPs offer a voluntary, low-cost, tax-assisted option to increase retirement savings.

This is a big win for the Chamber Network. The OCC has been pushing government to adopt a PRPP regime for many years.

2015 Ontario Budget Passes the Legislature
June 3

The Budget’s centrepiece was a $130 billion commitment over 10 years to build key long-term transportation and other infrastructure projects. The Chamber Network praised the government for their investments in infrastructure, but noted that too little progress is being made to combat Ontario’s $10 billion deficit.

The budget also formalized plans to sell a portion of Hydro One, the province’s largest electricity distribution utility. For the past several years, the OCC has been calling on the provincial government to ensure it is maximizing the value of its assets, including Hydro One. The OCC will be monitoring the situation closely to ensure that the sale of hydro utilities do not adversely affect electricity rates.

Comment through the "Peterborough Chamber" group of LinkedIn.






Earlier today, Ontario Premier Kathleen Wynne announced that her government will be implementing a cap and trade system as part of its strategy to reduce Ontario’s greenhouse gas emissions (GHGs). Globally, rising GHG levels are the main contributor to climate change.

This represents a significant policy shift that will have implications for Ontario’s business community. This Rapid Policy Update provides you with an overview of what you need to know as government moves forward with a cap and trade system.


When will the system take effect?

No details have been shared on implementation timelines.

How does cap and trade work?

A cap and trade system is a market for GHGs. The goal of the system is to provide a financial incentive for businesses to reduce their carbon footprint.

Under this system, the government sets a maximum limit on the amount of GHGs that applicable businesses can produce (“the cap”). Pollution credits are then allocated to these businesses, which stipulate how many GHG emissions each business is allowed to produce. These credits can then be bought and sold in a newly created pollution credit market (“the trade”). Businesses that reduce their emissions in a given year can sell their leftover credits to those that have emitted more.

Typically, the cap is lowered gradually to reduce the total GHGs emitted by the participating jurisdiction over time. We do not yet know what the emission cap will be in Ontario and if it will change over time.

What sectors will be most impacted?

The Ontario government has not indicated which businesses or sectors will be subject to the cap and trade system. However, it has announced its intention to link the carbon market with North America's largest cap and trade system currently in place in California and Quebec.

In Quebec, businesses that emit 25,000 metric tons or more of CO2 equivalent (i.e. GHGs) a year are subject to the cap and trade system. In its first year, only the industrial and electricity sectors were subject to Quebec’s cap and trade system. This year, fossil fuel distributors are being phased into the system, which will affect a more significant portion of the economy.

How will the government use the revenue collected from cap and trade?

The provincial government has not indicated how much will be raised by the cap and trade system. It has signalled that it will reinvest the money raised through the system into projects that reduce GHG emissions and help businesses remain competitive. Projects may include building more public transit or providing financial assistance to businesses as they move to reduce their carbon footprint.

What is the Ontario Chamber of Commerce’s position?

The Ontario Chamber of Commerce (OCC) recognizes that urgent action is required to mitigate the existing and pending negative environmental and economic effects of climate change. In principle, we support efforts to reduce GHGs.

However, the introduction of a cap and trade system must be viewed within the broader context of the escalating cost of doing business in Ontario. Over the past year, the Government of Ontario has implemented or announced a number of initiatives that will have a direct impact on business, including a new Waste Diversion Act, a review of the Labour Relations Act, the Ontario Retirement Pension Plan (ORPP), in addition to this new carbon pricing system.

The cumulative impact of these changes poses a serious threat to the future competitiveness of Ontario’s business climate. It is incumbent on the provincial government to ensure that Ontario remains among the most attractive places in the world to do business. As such, we believe government must put economic interests, along with environmental ones, at the forefront of the discussion. The following principles should be among those that shape the design of the cap and trade system:
  1. Government must consider the impact that the cap and trade system and regulatory changes have on the economy and job creation in the province.
  2. The cap and trade system must be revenue neutral and the revenue collected should be used to mitigate the impact of the plan on those businesses most affected.
  3. Government should harmonize its efforts with Ontario’s immediate competitors for investment and trade.

What are the Ontario Chamber of Commerce’s next steps?

In the coming months, we will work with the Chamber Network to advocate on behalf of Ontario’s business community and communicate our position to the Government of Ontario. We will also seek answers to the key design questions that remain unanswered.

Please stay tuned for updates as this important business issue unfolds.

Additional resources

How Cap and Trade Works (Government of Ontario)
News Release: Cap and Trade System to Limit Greenhouse Gas Pollution in Ontario(Government of Ontario)
Ontario’s Climate Change Discussion Paper 2015 (Ministry of the Environment and Climate Change)
Questions or comments? Contact Scott Boutilier, Policy Analyst.