Ottawa Reviewing $420 Million in Transfers After Ontario Cancels Cap-and-Trade

Ontario Premier Doug Ford’s determination to wind down the Wynne government’s carbon cap-and-trade program could cost his province C$420 million in transfer payments, after federal officials confirmed the funding is now under review, National Observer reported last week.

“By cancelling Ontario’s cap-and-trade plan, the Ontario government is making it clear that it is not taking climate action, and is effectively withdrawing from Canada’s national climate change plan without a plan of their own,” federal Environment and Climate Change Minister Catherine McKenna told Observer in a statement. “We are evaluating what this decision means for the portion of federal funds that supported GreenON programs and Ontario’s funding under the Low Carbon Economy Fund.”

McKenna’s office “confirmed on Wednesday that Ontario had not yet received any of its share of the Low Carbon Economy Fund,” Observer reports.

“Ottawa had already approved funding for seven Ontario programs under the fund, but all of that money is now on hold,” The Canadian Press adds. “One particular program cancelled by Ford, the Green Ontario Fund, means the province has, forfeited $100 million in federal money.”

Later in the week, following his first official meeting with Ford, Prime Minister Justin Trudeau confirmed that Ontarians will still pay the federal floor price on carbon, with the eventual revenue “returned to people’s pockets,” writes Observer’s Steph Wechsler. “The clear mandate that I got elected on was to bring in a national plan to fight climate change,” Trudeau said, “and that’s exactly what I’m going to do.”

Last week, as well, the Ford government announced it was firing Ontario Chief Scientist Molly Shoichet, a biomedical engineer who’d been on the job since November and told CBC her work had been going well. Shoichet “said she was ‘surprised and not surprised’ by the news, and believes she was let go so Ford’s new PC government could put its own stamp on the role, even though she says she’s not a member of any political party,” CBC reports.

“Science is not political,” Shoichet stressed. “It’s really about trying to make the best decisions for government.” Ford spokesperson Simon Jefferies said the new government would “undergo a process of finding a suitable and qualified replacement,” but CBC says he “did not elaborate on why Shoichet wasn’t suitable for the job in the government’s eyes.”

Evidence for Democracy responded with a call for emails to Ford, urging him to hire a new chief scientist with strong science background.

“When government decisions are made based on the best available evidence, we all win,” E4D stated. “When science is well-funded, openly communicated, and used in policy, it benefits all Ontarians.”

As Ford’s climate and energy agenda continued to emerge, Mark Winfield, coordinator of York University’s certificate program in sustainable energy, listed a series of “significant themes” in the premier’s early announcements.

“The most obvious, and puzzling, given Mr. Ford’s acknowledgment of the existence of climate change, is an apparent assault on the province’s efforts to combat the problem,” Winfield wrote. “There is also a deep dislike of anything related to renewable energy, despite the fact that globally renewables are the leading source of investments in new electricity supplies. At the same time, the incoming premier seems unquestioningly committed to the previous government’s directions on the refurbishment and ‘life extension’ of the province’s aging fleet of nuclear power plants.”

He adds that “the new premier’s directions move against initiatives intended to yield long-term benefits, like reducing GHG emissions, investing in energy efficiency, and the expansions of public transit services made possible through the revenues from the provincial gasoline tax. The rationale for these moves seems to be to achieve what will ultimately be relatively small, and short-term reductions in hydro rates and fuel prices.”

And meanwhile, Ford’s early decisions “are embedding new long-term costs,” Winfield added. “The most obvious relates to the consequences of climate change, around which Mr. Ford’s moves would leave the province with neither a strategy for reducing emissions nor a means of identifying and supporting the changes to infrastructure and public services needed to deal with the already apparent impacts of a changing climate. The costs of these impacts are already estimated in the hundreds of millions per year, and will move into the billions over the coming decades. In more immediate terms, the direct costs of extracting Ontario from the cap and trade system could run into the billions themselves.”

With much the same concerns in mind, 73 past recipients of the Clean50 environmental leadership award expressed alarm at the new government’s early moves.

“While the Clean50 understands that the new government wishes to deliver on a campaign promise, the Clean50 asks that they consider doing so in a more measured fashion that will not be so costly to Ontario taxpayers,” the recipients stated. “Our current partnership makes our province more livable, and encourages companies to expand in Ontario, rather than take their jobs and innovation to more enlightened provinces and U.S. states. It is the way the world is going—and ensures we remain competitive in the future.”

Klaus Dohring, president of Windsor, Ontario-based Green Sun Rising, called Ford’s cutbacks an “assault on green energy” and a step in the wrong direction. “In the last few years, the available business for a solar company within Ontario was insufficient to keep the boat floating,” he told CBC News. “If we were totally dependent on Ontario as a business, we would not exist anymore.” [And yet, renewable energy subsidies in Canada pale in comparison to the $3.3 billion the federal government hands over to fossil industries every year—not including this year’s $4.5-billion windfall to Kinder Morgan.—Ed.]

But in nearby Tecumseh, ON, Unconquered Sun founder Sean Moore said he wouldn’t need subsidies to make a go of it. “Solar energy is able to stand on its own two feet, just being sold on its merits and what it does for people and how it eliminates electrical costs,” he said. While Moore considered provincial incentives the “icing on the cake,” CBC adds, “his team pitches the fact that the monthly cost of solar panels is less than your hydro bill, which gets eliminated. That, he says, sells itself.”

In other Ontario news, Citizens’ Climate Lobby stressed the need for “policy persistence” despite changes in government, while Ryerson University’s City Building Institute said the divisiveness that emerged during the provincial election campaign should give way to a sense of strength through diversity across the Greater Toronto and Hamilton Area.

“Our city region is highly economically interdependent,” wrote Anne Golden, past chair of the GTA Task Force, and urban designer Ken Greenberg, principal of Greenberg Consultants. “The fates of the cities and suburbs are intertwined. Our hopes for a prosperous and sustainable future depend on our mutual understanding that while we have our own local identities and concerns, we are all in it together.”

In that light, “the concept of ‘us versus them’ is false and misleading,” they wrote. “Rather than view the suburbs and downtowns as competitors in a zero-sum game, we must look upon them as partners with common interests, even if their local needs and priorities might vary.”

Ontario Greens leader and newly-minted MPP Mike Schreiner struck a similar tone after his swearing-in at Queen’s Park. “I think there’s thousands and thousands of people around Ontario who have been looking forward to a Green moving into an office at Queen’s Park,” he told media.

Schreiner “says he hope Ford’s government will be transparent as it formulates a plan to replace cap and trade,” National Observer reports, after Environment Minister Rod Phillips claimed cap-and-trade was hurting jobs.

“I’ve had businesses reach out to me and say the exact opposite,” Schreiner responded. “That they’ve already planned for pricing pollution in their business plans. What they prefer actually is stable, steady policy so they can engage in long-term business planning, not this jerking around of we have one plan in place and then we get rid of that without having an alternative plan in place…that level of uncertainty is actually bad for business.”