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Cap and trade will add about 4.3 cents a litre to gas

Wynne expects the program won't increase electricity costs for the industrial and commercial sectors.


TORONTO — Motorists and most homeowners in Ontario will be among those to feel the first effects of the Liberal government’s cap and trade plan, paying more for gasoline and natural gas.

Premier Kathleen Wynne revealed some of the impacts on consumers, such as an increase of about 4.3 cents a litre on gas and about $5 more per month on residential natural gas, before the legislation enabling cap and trade was to be introduced.

“The cost of doing nothing is much, much higher than the cost of going forward and reducing greenhouse gas emissions,” she said.

More details are expected to come as the government tables its budget, but the government indicated that some large polluters will be given temporary allowances.

Revenue from the cap and trade auction set for next year will be used to “protect” consumers from an electricity rate hike and could even lead to rates going down, Wynne said, adding she expects the program won’t increase electricity costs for the industrial and commercial sectors.

Retrofitting and conservation programs could also be used to offset increases in natural gas bills, she said.

Environment Minister Glen Murray predicted that drivers wouldn’t notice much of a change in gas prices, since they already fluctuate.

“In my (downtown Toronto) constituency, and I don’t have a big constituency, the difference in gas prices between one station and another is greater than any change that’s going to occur as a result of cap and trade,” he said.

Green Party of Ontario leader Mike Schreiner said large emitters should not be given a “free ride” through temporary relief as cap and trade is implemented.

But Murray said it’s necessary to protect Ontario jobs in industries that are competing with jurisdictions without a carbon pricing system. About 14% of industries will get allowances, he said.

“We know that the people getting reductions or getting assistance through this program are legitimately trade exposed and are legitimately making reductions and need that protection,” Murray said.

NDP Leader Andrea Horwath supports cap and trade but said it’s “worrisome” big polluters are getting “a bit of a pass.”

Cap and trade is scheduled to take effect in January and the government expects to raise about $1.3 billion in its first full year of operation, money that will be devoted to lowering greenhouse gas emissions.

Finance Minister Charles Sousa denied Wednesday that cap and trade revenue would be used to lower the $7.5-billion deficit, which the Liberals have promised to eliminate by 2017-18.

However, the revenues still have to show up on the government’s balance sheet.

Progressive Conservative Vic Fedeli believes cap-and-trade revenue will be used to show a lower deficit, similar to the accounting for revenue from a Hydro One IPO, even though both are dedicated for specific funds for climate change initiatives and infrastructure projects.

The fall economic statement showed a 2015-16 deficit projection that was $1 billion lower than was forecast in last year’s budget – much of the revenue boost was due to IPO revenue on the books, but Sousa denied it was being used to lower the deficit.

© 2016 The Canadian Press

3 Comments » for Cap and trade will add about 4.3 cents a litre to gas
  1. Conrad Guay says:

    this women is making all the wrong decisions. I cannot wait till the next election

  2. Mark Ettridge says:

    Told ya so, the Liberals like to buy your votes and then make us pay with more taxation. When has a Liberal government ever offered lower taxes, never, the only governments that have ever lowered taxes are the Conservative side, they run government like a business, not a charity doling out funds like it was their money not yours. Look at history, when have you seen a Liberal government run without a deficit but you have seen surpluses with Conservative governments. Deficits cost us and our children by putting less money at our disposal.

  3. Kent says:

    I’m not an economist, but I fail to see how piling on more and more taxes, whose only purpose is to line the coffers and drive small businesses into bankruptcy is good for the economy…..

    And, let’s be honest, this isn’t about the environment. This is about “What can we do to get even more money?”.

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