Ontario Introduces Cap & Trade System

On April 13, 2015, Premier Kathleen Wynne announced that Ontario would implement a cap and trade system aimed at reducing greenhouse gas emissions in the province. Ontario has committed to imposing a hard cap on pollution for each sector of the economy.

A cap and trade system, in general, places a limit on the amount of greenhouse gas emissions that may be produced in a specified time frame. As time progresses, this limit is reduced as per previously established guidelines. Businesses must hold enough emission allowances in order to equal their actual greenhouse gas emissions. If a business does not hold enough allowances for the given time period, they may purchase allowances to meet the requirement. Conversely, if a business holds an excess of allowances, they may save them or sell them to other businesses.