Ontario Cap-and-Trade Program


Ontario passed the Climate Change Mitigation and Low-Carbon Economy Act, which ensures the creation of a cap-and-trade system. Ontario entities will be responsible for emissions staring January 1, 2017 and will participate in their first auction in March of 2017. They will link with California and Quebec in following auctions.


This act establishes Green House Gas (GHG) reduction targets of 15%, 37%, and 80% in 2020, 2030, and 2050 of calculated 1990 levels. The Lieutenant Governor in Council may establish interim targets to reach these end goals. The act calls for the Government of Ontario to prepare a climate change action plan that will set out actions to modify behavior to help Ontario to reach their targets in GHG reduction.


The act defines categorizes entities as either mandatory, voluntary, and market participants (speculators) and requires them to report GHG emissions according to their activities. These activities include domestic electricity generation, Industrial, Institutions and large commercial operators with annual GHG emissions greater than 25,000 Metric Tons and transportation fuel, and Natural gas distribution companies whose users have in aggregate more than 25,000 tons of associated emissions from the burning of such fuels, in essence largely mirroring California and Quebec’s currently existing program.  


In addition the act gives permission to the Minister to allocate emission allowances and to create and issue offsets credits. All proceeds generated from the

cap-and-trade program will be received by the Greenhouse Gas Reduction Account. This account will invest proceeds into green projects and initiatives to reduce emissions.


Ultimately this act paves the way to a fully functioning cap-and-trade program that the Government hopes will help reduce greenhouse gas in the most efficient way to protect the public, industry, and businesses.