Call for Deferral of Provincial Cap & Trade program

Twenty Chambers Across Ontario Call for Deferral in Provincial Cap & Trade Program to prevent jobs, investment from leaving Ontario 
Chambers cite high costs of program on top of skyrocketing electricity prices as well as a changed policy direction of the United States

PETERBOROUGH, ON, Tuesday, December 20, 2016 – Today, 20 chambers across Ontario are calling for a deferral of the Provincial Government’s Cap and Trade program scheduled to be implemented January 1, 2017.  There are several reasons for this call including:

• high costs of the program layered of top of skyrocketing electricity prices
• lack of sector by sector economic impact
• a change in policy direction in the United States
• the recent Canadian federal policy agreement signed by Ontario

In Ontario, since 2004, electricity prices have increased by 383%, from a flat rate of 4.7 cents a kilowatt hour to 18 cents a kilowatt hour at peak times.  The introduction of the cap and trade system will add further charges on natural gas, gasoline and diesel fuel that will be keenly felt by every individual and business in Ontario.

“Businesses are already struggling under the weight of ever increasing costs,” says Stuart Harrison, President & CEO, Peterborough Chamber of Commerce. “And we are extremely concerned about the impacts of these additional charges on jobs and the economy.”

As well, with the recent federal policy calling for the provinces to have plans in place by 2018, we believe deferring the program for at least a year to better understand and communicate the exact impact would benefit all. The Chamber Network passed a resolution at the Ontario Chamber of Commerce AGM in May 2016. The first recommendation was that the program be deferred until 2018.

“There’s no need to push this program through,” adds Harrison. “Why not take the year and start the Ontario program at the same time as the other provinces that have signed the federal agreement?  Deferring the program also allows for analysis of any new policies that may come from the Trump administration in the U.S.”

Ontario has already made great strides in reducing Greenhouse Gas Emissions (GHGs) with the elimination of coal; however, the full economic impact of that decision is still playing out. 

Our members tell us: “Business loves certainty” and without it, they are less likely to hire and invest in themselves. 

As a result, these 20 Chambers across Ontario request that the Ontario government delay the implementation of the cap and trade program for at least one year.

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For more information contact:
Sandra Dueck, Policy Analyst/Communication Specialist
Peterborough Chamber of Commerce
705.748.9771 x215 or [email protected]


Backgrounder
Auditor General
•    The recent Auditor General concerns outlined in her recent report  (Chapter 3): http://www.auditor.on.ca/en/content/annualreports/arreports/en16/v1_302en16.pdf.  Some of the report’s main concerns are presented below:

• The cap-and-trade system will result in only a small portion of the required greenhouse-gas reductions needed to meet Ontario’s 2020 target.
• Cap and trade is expected to bring higher electricity prices, which may lead people to switch to cheaper natural gas—a fossil fuel that also produces greenhouse gases. Between 2017 and 2020, the Ministry of Environment and Climate Change plans to spend up to $1.32 billion of cap-and-trade revenues to address this issue. The Action Plan indicates that this will result in 3 Mt (megatonnes) of reductions. However, neither the Ministry nor the provincial agency that oversees Ontario’s electricity system could show how they arrived at the 3-Mt estimate. In addition, the $1.32 billion is expected to have only a small impact on reducing the expected electricity price increases. In particular, electricity prices are projected to increase by 14% for businesses and 25% for households; after applying the $1.32 billion, businesses will still face a 13% increase and households 23%.
• No plan for achieving renewable natural gas goal.
• Climate Change Action Plan commits about $1 billion to previously approved initiatives: some initiatives were approved years before the Action Plan was created. By including these projects in the Action Plan, the Province has found an alternative way to fund their costs— but will not achieve any additional emissions reduction
• Under the linked system, Ontario’s cap does not actually control the amount of greenhouse gases that can be emitted in Ontario: Because Ontario has chosen to link with California and Quebec, Ontario may exceed its own emissions cap if Ontario emitters decide to purchase allowances from Quebec or California. The cap on emissions set by the Ontario government consequently does not actually control Ontario emissions.

LIST OF PARTICIPATING CHAMBERS
Ajax Pickering Chamber of Commerce
Burlington Chamber of Commerce
Chatham-Kent Chamber of Commerce
Greater Kitchener Waterloo
Greater Peterborough Chamber of Commerce
Greater Sudbury Chamber of Commerce
Hamilton Chamber of Commerce
Ingersoll Chamber of Commerce
Kingston Chamber of Commerce
London Chamber of Commerce
North Bay Chamber of Commerce
Northwestern Ontario Associated Chambers of Commerce
Newmarket Chamber of Commerce
Sault Ste Marie Chamber of Commerce
Sarnia Lambton Chamber of Commerce
St Thomas & District Chamber of Commerce
Thunder Bay Chamber of Commerce
Tillsonburg District Chamber of Commerce
Timmins Chamber of Commerce
Windsor-Essex Chamber of Commerce