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Policy Proposal Notice:   EBR Registry Number:   010-6740
Moving Forward: A Greenhouse Gas Cap-and-Trade System for Ontario
Ministry of the Environment
Date Proposal loaded to the Registry:
May 27, 2009

This notice was originally posted on May 27, 2009 for a 60-day comment period. The comment period is being extended until July 27, 2009 to allow for further comments.

Keyword(s):   Air  |  Legislation
The comment period for this proposal is now over.
Description of Policy:

The Ontario government has developed a discussion paper to inform the development of a greenhouse gas cap-and-trade program for the province. This paper builds on an initial discussion paper released by the province in December 2008 and posted on the Environmental Registry for public comment.

This discussion paper is focused on advancing work on the design of a greenhouse gas emissions trading system for Ontario to help meet the province’s climate change reduction goals and inform discussions on Ontario’s participation in a broader trading program for North America. The paper incorporates feedback from stakeholders and presents critical design issues and options on the key elements of a cap-and-trade system including: scope and thresholds, cap setting and allocation, credit for early action, offsets, reporting, and industry transition.

Purpose of Policy:

On May 27, 2009, the Ontario government introduced enabling legislation that if passed, would allow the implementation of a cap-and-trade system through future regulations that can link to an emerging North American system. To complement the proposed legislation, the Ontario government is seeking stakeholder comments on a discussion paper to inform the development of potential future regulations.

This posting follows a series of stakeholder consultations through late 2008 and early 2009 on the government’s initial discussion paper.

Feedback from stakeholder consultations and comments on the December 2008 paper were considered in preparing this discussion paper, along with information on developments in other jurisdictions planning cap-and-trade programs.

Other Information:

Ontario is working actively with other North American jurisdictions to pursue a common approach to cap-and-trade. In July 2008, Ontario joined the Western Climate Initiative – a group made up of seven western states and Quebec, British Columbia and Manitoba. In June 2008, Ontario signed a Memorandum of Understanding with Quebec to collaborate on a regional cap-and-trade system for greenhouse gases. Ontario is also a member of The Climate Registry, participates as an observer in other greenhouse gas cap-and-trade initiatives, and is exploring opportunities for further cooperation with the federal government to develop a cap-and-trade program that reflects Ontario’s priorities and is aligned with other systems to provide broad access to trading.

Cap-and-trade is a flexible, market-based mechanism that can be used to reduce greenhouse gases and facilitate the transition to a low carbon economy by encouraging technological innovation, economic growth and job creation. In a cap-and-trade system, government sets limits that gradually reduce the total amount of greenhouse gases that can be emitted from regulated facilities. Companies that reduce their emissions below these limits may have “surplus” allowances they can sell or bank for future use.

The Ministry will continue to work with stakeholders and the public to develop a greenhouse gas cap-and-trade system and all interested parties are welcome to provide comments.

For more information on cap-and-trade, and what Ontario is doing, please visit the Ministry of the Environment’s cap-and-trade website.

Public Consultation:

This proposal was posted for a 61 day public review and comment period starting May 27, 2009. Comments were to be received by July 27, 2009.

All comments received during the comment period are being considered as part of the decision-making process by the Ministry.

Please Note: All comments and submissions received have become part of the public record.


Steve Borg
Project Manager
Ministry of the Environment
Integrated Environmental Policy Division
Air Policy Instruments and Programs Design Branch
77 Wellesley Street West
Floor 10
Ferguson Block
Toronto Ontario
Phone: (416) 314-4923
Fax: (416) 314-4128

Additional Information:

The documents linked below are provided for the purposes of enhancing public consultation.
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