ON: Ontario Cap and Trade Program - Now Revoked

Keeping with their commitment to end Ontario’s Cap and Trade program, the newly elected Progressive Conservative Government of Ontario filed Ontario Regulation 386/18: Prohibition Against the Purchase, Sale and Other Dealings with Emission Allowances Credits on July 3, 2018, effective immediately. The new regulation replaces Ontario Regulation 144/16 – the Cap and Trade Program under the Climate Change Mitigation and Low-carbon Economy Act, 2016. 

The new regulation states that no registered participants shall purchase, sell, trade or otherwise deal with emission allowances and credits. The effect of O. Reg. 386/18 confirms that those who hold compliance instruments (including allowances purchased at auction) are not able to deal with (monetize) those instruments. 

The Regulation will be printed in the Ontario Gazette on July 21, 2018.

Current Situation

• On July 9, 2018, the Ministry of the Environment, Conservation and Parks, Cap and Trade (MECP) program office communicated to the CPA in response to an email inquiry that the Ministry is committed to an orderly wind-down of the program and will be reaching out to stakeholders in the coming weeks. At the time, the MECP Cap and Trade office did not mention the revocation of the Ontario 144/16 regulation noted above.
• On July 12, 2018, the Energy Supply Policy Division from the Ministry of Energy, Northern Development and Mines contacted the CPA to gain a deeper (quantifiable) sense of the propane industry’s participation and holdings in the Cap and Trade program. The Ministry also referred to the July 3 formal revocation and filing of the above-mentioned Ontario Regulations, which had not been previously communicated to the public or media outlets.
• On July 17, 2018, a meeting was held between CPA Staff and Steen Hume, Assistant Deputy Minister, Energy Supply Policy Division to discuss the current status of propane industry participants who currently hold emission allowances and credits. 

Next Steps

The CPA will gather more information and will provide members additional details when available. 

For more information regarding this issue, please contact Hando Kang, Regional Director, Government Relations, Ontario at 416.889.5142 or handokang@propane.ca.