Cancelling cap and trade will result in $3B in lost revenue: FAO [UPDATED]

Financial watchdog says loss is greater than the savings achieved by cutting program spending.

October 16, 2018   by Shawn Jeffords

TORONTO — The cancellation of the cap-and-trade system will cost $3 billion in lost revenue over the next four fiscal years, Ontario’s fiscal watchdog said Tuesday, warning the decision would push the provincial budget further into the red.

Financial Accountability Officer Peter Weltman said the loss of revenue from cap and trade will be greater than the savings the government will achieve by cancelling spending associated with the program.

The new Progressive Conservative government revised the deficit to $15 billion last month, up from $11.7 billion predicted by the province’s auditor general.

Weltman could not immediately say what the province’s deficit would be after factoring in the loss of revenue from cap and trade, but added that his office would provide an update on Ontario’s deficit later in the fall.

“The challenge doesn’t change,” he said. “The deficit number becomes bigger.”

The FAO also estimated that in the long run, the cap-and-trade system would have cost Ontario families less than the federal carbon tax. The federal government has indicated it plans to return the money raised by the tax directly to residents in the provinces opposed to the plan.

Under cap and trade, the typical Ontario household would pay $312 annually in additional costs by 2022, said the FAO, compared to $648 under the federal system by the same year.

Premier Doug Ford campaigned on a pledge to cancel cap and trade during the spring election and has vowed to take Ottawa to court over its decision to impose a carbon tax.

The province has introduced legislation to repeal the system, which was introduced by the previous Liberal government and puts caps on the amount of pollution companies in certain industries can emit. If they exceed those limits, they must buy allowances at auction or from other companies that come in under their limits.

Environment Minister Rod Phillips said the government is keeping a promise it made to Ontarians during the election.

“We said that we would cut this tax. We cut this tax,” he said.

NDP energy and climate change critic Peter Tabuns said cancelling cap and trade will hurt the environment and the lost revenue will have large implications for the province’s books.

“The direct result of Ford’s favour to big polluters will be $3 billion in costs piled onto the backs of the people of Ontario,” he said in a statement.

Green party Leader Mike Schreiner said the FAO’s review shows Ford’s cancellation of cap and trade is a “$3 billion boondoggle” that will send the province deeper into a fiscal hole.

“Premier Ford is putting politics and ideology over evidence, and it comes with a $3 billion price tag that the Conservatives are not being honest about,” he said in a statement. “The FAO report reveals the real financial consequences of Ford’s ‘cut first; think later’ approach to governing. He rushed to cancel cap-and-trade to make good on an ill-conceived campaign slogan. Now we are learning about the financial consequences.”

Keith Stewart, senior energy strategist with Greenpeace Canada, said the FAO’s report provides an “honest accounting” of the Ford government’s decision to cut cap and trade.

“Rather than spending another $30 million on a lawsuit to try to block federal action on climate change, the premier should focus on how he can create good, green jobs that position Ontario to thrive in the new low-carbon economy,” he said.

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4 Comments » for Cancelling cap and trade will result in $3B in lost revenue: FAO [UPDATED]
  1. Allen says:

    Weed sales will recover this loss, although we will likely need three times as much when the pot heads turn into the Walking Dead!

  2. Randy says:

    Once again cherry picking numbers. That lost 3 billion is the same 3 billion our crooked liberals would have stolen from the kitchen table. Regardless of how you spin it there is only one payer the tax payer. Big business passes the cost onto the electorate regardless of how you spin it. Big business will not and have not paid any carbon offset they didn’t capture through increased pricing. The little guy pays every time. Trudeau and his plan is a complete fail all designed to make himself look good in front of the tyrants and extremists that are the UN. Liberal politics is of corruption and deceit.

  3. Randy says:

    There is no loss of revenue. Contrary to Liberal propaganda Big Business does not pay to pollute. Big business passes their costs on to the little guy the middle class and poor. Taxation has no component to remove Carbon outside of making everyone poorer in support of the wealthy. Through this wealth distribution families pay more to heat their homes, more for transportation to support their families, more for food and yes more to support big government bureaucracy. Canada’s contribution is minuscule compared to India, China,Europe or the USA who by the way will not meet or tax for CO2. If fact Canada is carbon neutral with its vast forests. One volcano eruption spews more pollution than all of man kind together. The idea of controlling weather thru taxation is the worlds biggest con of all time. Science can’t predict the daily weather with any accuracy let alone predict global warming. Today’s science presented by the UN is not science it’s political posturing for the purpose of wealth distribution. Science that is determined with a predestined outcome is not science. The Earth is naturally warming and no tax will ever change this cycle. Carbon taxation is just what it is a tax for the wealthy to legally steal from the rest of us.

  4. Ken M says:

    “result in $3B in lost revenue” revenue? when did this become revenue?
    It is clear that most liberals are liars when they talk about the carbon tax (in whatever progressive form) being revenue neutral. I do not understand why everyone doesn’t everybody call these unethical lairs out on their lies? Are they stupid or just inured to lies from the alt.left?

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