After years of consideration, Ontario has introduced Bill 172,
Climate Change Mitigation and Low-Carbon Economy Act,
2016, and released a draft regulation for Ontario's carbon
cap-and-trade program. This is the first step toward Ontario
joining the Québec-California carbon market.
The Ontario regime proposes provincial targets for the reduction
of carbon emissions and would require regulated emitters to take
direct action or participate in the trading market to reduce their
emissions. Subject industries include those with annual emissions
above 25,000 tonnes of CO2 equivalent, natural gas
distributors, electricity importers and petroleum suppliers.
Compliance obligations would start in 2017, with the first
compliance period running until December 31, 2020. Although free
allowances would be distributed initially at levels comparable to
current emissions, regulated entities would gradually be required
to reduce emissions, purchase allowances from the government or
seek
