Ontario has begun to dismantle the province’s cap-and-trade system by prohibiting all trading of emission allowances. Ontario, Quebec and California were to participate in a third joint auction on August 14th. The change leaves businesses involved in the cap-and-trade program with uncertainty.
The cancellation will have major ramifications for the federal government, which plans to implement a carbon tax in provinces where there is none. On Tuesday afternoon, the federal government was already criticizing the change of direction in Ontario.
Contracts and orders that have already been signed will be honoured. There will be an “orderly wind-down” of GreenON programs funded by cap-and-trade, including incentives for homeowners to make their homes more energy efficient and for motorists to switch to electric vehicles.
