Officials in the office of Ontario Premier Doug Ford pushed U.S.-based Koch Industries to seek compensation in international courts for the cancellation of the province’s carbon cap-and-trade program, thereby pushing the costs onto all Canadians, according to an investigation published this week by The Narwhal.
Just weeks before the Ford government shuttered the program, Koch subsidiary Koch Supply & Trading “had purchased over US$30 million worth of carbon allowances from the province,” The Narwhal’s new Ontario bureau reports. The company had bought the allowances under the previous Liberal government, only to have the program cancelled and the funds frozen before Ford even officially took office.
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At a meeting in July, 2018, according to newly-released legal documents, two officials in the premier’s office told Koch it wouldn’t be getting the money back and encouraged the company to take the matter up with Ottawa.
“This is likely to turn into a North American Free Trade Agreement claim and will be on the federal government,” the premier’s executive director of policy, Mitch Davidson, said at the time. That prompted Koch to file a statement of claim with the International Centre for Settlement of Investment Disputes, a World Bank office that handles NAFTA disputes, accusing Ontario of making an “ill-considered, precipitous, and illegal” decision to cancel the program, The Narwhal says.
The upshot is that “the federal government is now required to defend itself against Ontario’s decision to cancel cap-and-trade,” Stuart Trew, director of the trade and investment research project at the Canadian Centre for Policy Alternatives, told The Narwhal’s Fatima Syed. “It’s going to spend a lot of taxpayer money on legal fees doing that.”
From reading the documents, “you’re kind of reminded of how stupid the Doug Ford government’s decision was,” he added. “How it went down, how abrupt it was, how pointless it was.”
“The news was devastating and the loss suffered was clear and immediate,” Koch Supply said in its legal filing. “Ontario’s desire to avoid paying any just compensation for the direct and indirect effects of its actions was clear, and obviously motivated by the intent to downplay the implications of its irresponsible measures in the eyes of the voting public.”
The Narwhal has more on how the decision was made and how a U.S. fossil usually known for funding climate denial and blocking energy transition efforts got burned for buying in to a carbon pricing program.
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