Ontario's Cap and Trade Update

Introduction

Ontario has forged ahead with its plans to introduce a Cap and Trade System, with the announcement of the Climate Change Mitigation and Low-carbon Economy Act, 2016 (the "Act") and the associated draft Cap and Trade Regulation (the "Regulation"). 

The Act and Regulation outline the details of Ontario's proposed plan to reduce greenhouse gas ("GHG") emissions.

The Cap and Trade System under the Act and Regulation is consistent with the Cap and Trade program design proposal posted on the Environmental Registry in November 2015.¹

Proposed Cap and Trade System

Facilities will be required to comply with the Cap and Trade System as of January 1, 2017. The first compliance period will run from 2017 to 2020. Emission allowances will be auctioned four times a year. Available emission allowances will decrease annually.