Nearly four years after Premier Doug Ford’s government abruptly cancelled Ontario’s cap-and-trade program, furious investors have filed two lawsuits against the province for money lost on emissions credits.
Sharolyn Mathieu Vetesse, who is leading one class action suit of businesses trying to recoup their funds, told The Narwhal she could not believe the speed with which Ford’s Progressive Conservatives axed the program. As the president of an energy solutions company in Cambridge, Ontario, she had purchased $18,612.08 in emissions allowances which she intended to resell to heavy emitters. Describing her shock when she realized her accounts had been “simply seized” without warning, she noted, “I didn’t think they’d immediately turn their back to billions of dollars.”
And indeed, the program had already generated billions in revenue.
Citing a Ministry of Environment report, The Narwhal reports that by May 2018, two months before the Ford government axed the program, and two years after its launch by Kathleen Wynne’s Liberals, it had already put $2.87 billion in provincial coffers.
Vetesse is suing both the Ministry of the Environment and then-environment minister Rod Phillips, calling them both “high-handed, reckless, and deliberate”. The suit accuses Ontario of showing “a callous disregard for Class Members’ commitment, investment, and reliance on the long-term nature of the cap and trade program, a government-induced, and, in part, mandated program.”
Also seeking damages in a separate suit filed in April 2021 is the corporate behemoth Koch Industries, which is looking to recoup some US$30 million in lost investments.
“Losing either suit could make one of Ford’s most high profile 2018 election campaign promises—that cancelling the program, which his party mischaracterized as a “carbon tax,” would save Ontarians money—an expensive falsehood,” writes The Narwhal.
In its October 2018 review of the financial impacts of tossing out the cap-and-trade program, the Financial Accountability Office of Ontario forecast the province’s annual budget balance would “worsen by a total of $3.0 billion over fiscal years 2018-19 through 2021-22.”
At the time, The Mix reported warnings “from all sides of the political spectrum” that cancelling the program would be very costly—$4 billion and counting, according to the Ivey Foundation.
The cancellation has also harmed Ontario’s reputation as a good place to do business, especially low- to zero-carbon business. Citing comments by a range of industry insiders and observers, the Narwhal says that the “very abrupt shutting down of a billion-dollar business program has made companies reconsider or pause green investment decisions in Ontario.”
