Ontario’s Liberal government has released details of its cap-and-trade program, which is expected to increase the price of gas and homeowners’ natural gas bills, but gives some of the biggest polluters — including Vale Ltd. — a four-year “holiday.”
The government is putting a price on carbon of about $18 a tonne and capping emission allowances at roughly 142 metric tonnes per year in 2017, when the plan rolls out, according to a series of details contained both in Thursday’s budget and in draft regulations posted by the environment ministry.
The cap is expected to decline 4.17 per cent each year to 2020, when the Liberals hope to have achieved a 15-per-cent reduction in greenhouse gas emissions over 1990 levels.
Cap and trade, which requires emitters to pay for greenhouse gases released into the air, is projected to generate $1.9 billion in revenue next year. Revenue from cap and trade will be dedicated to green initiatives, the government says.
The cost of gasoline will rise about 4.3 cents per litre and residential natural gas bills will likely go up about $5 per month due to cap and trade. But Environment Minister Glen Murray acknowledged that as the cap declines and pressure increases on industry to meet emissions targets, those costs to consumers “may” increase.
During that same time, some of Ontario’s largest industries get free allocations. The regulations list such facilities as Vale Canada Ltd. in Sudbury, Essar Steel Algoma Inc. in Sault Ste. Marie and Imperial Oil’s Sarnia chemical plant.
“Big industry gets a four-year holiday on this and I think that’s a real problem,” said NDP critic Peter Tabuns. “I think there’s a huge perception that it’s unfair. If families and commuters have to pay right up front and big polluters get a four-year break, that doesn’t seem fair.”
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