Ontario has to Launder $1B in cap-and-trade money

CBC has the story: Ford government sitting on $1B in cap-and-trade money
Excerpts in italics with my bolds.

Environmental commissioner says by law it can only be spent on reducing greenhouse gases

Context: No one is talking about the reason Ford canceled cap and trade the first day on the job. It was to eliminate the 4.3 cents/liter gasoline tax. At the same time, spending on schemes to “fight climate change” was stopped.  By skimming a few cents off every liter sold, pretty soon you have billions of dollars in the pot. The law ending cap and trade did not reimburse gasoline retailers who had bought carbon allowances in the past, because they already passed on the cost to customers. Those who bought in advance to avoid higher carbon prices later are now caught and want the government to reimburse them, since they lost the opportunity to stick it to their customers. What a great idea is cap and trade: A market to sell a non-good at arbitrary prices paid by other people’s money. What could go wrong?

As much as $1 billion in Ontario’s cap-and-trade fund is sitting unspent, and questions are swirling about what Premier Doug Ford’s government will do with it.

The money was brought into provincial coffers under a law that says it can only be spent on measures that reduce greenhouse gas emissions. However, Ford has dismissed the money as a “slush fund,” and his government is pushing forward legislation to use some of it to cover the costs of cancelling the cap-and-trade program.

The dedicated fund for reducing greenhouse gases had a balance of $553 million at the end of March, when the last fiscal year ended, according to the province’s newly released public accounts. Another $476 million was added in May from the final cap-and-trade auction of carbon allowances, before Ford’s PCs won the election and quickly scrapped the Liberals’ climate-change plan.

That would put the account at more than $1 billion. What remains unclear is how much of that has been spent in the past six months, and how much will be used to wind up cap-and-trade.

CBC News asked the Environment Ministry for the current balance of the greenhouse gas fund, but officials did not provide an answer.

Ontario’s environmental commissioner Dianne Saxe believes there’s still $1 billion in the account because she has seen no evidence that money has been dispersed since the end of March.

Saxe — an independent officer of the Legislature like the auditor general and ombudsman — says the costs of winding up cap-and-trade ought to be small enough that the bulk of the $1 billion will remain.

“They will have quite a bit of money left,” said Saxe in an interview. “That can be money they can use to invest in [climate-change] solutions.”

She is warning the government that it cannot spend the money however it wishes, but only on initiatives to reduce carbon emissions. “That was the legal basis on which the money was collected, and that remains the law,” she said.

Liberal MPP Nathalie Des Rosiers said Monday she fears the government will not spend the money on cutting greenhouse gases but on lawsuits arising from cancelling cap-and-trade.

That fear is unfounded, said Environment Minister Rod Phillips.

“The money will be used for the purpose it was collected,” said Phillips in an interview Monday at Queen’s Park.

He declined to estimate how much of the $1 billion will remain in the fund once the cap-and-trade program is wound up. Nor did he agree that the figure will be in the hundreds of millions of dollars.

“I don’t think it would be fair to speculate at this point,” said Phillips. “We will make it clear how much money was spent and where it was spent.”

Ford made cancelling the cap-and-trade program a central election promise, calling it the “cap-and-trade carbon tax” during and after the campaign. Within days of taking power, his government shut down rebates to homeowners for making energy efficiency improvements, such as installing new windows, and ended rebates for buying electric cars. Those rebates came from the greenhouse gas reduction fund.

The government won’t be able to say how much remains in the greenhouse gas fund until all the programs wind up, said Phillips. He also said the government is allocating $5 million to compensate companies that bought cap-and-trade allowances, which are now worthless.

Phillips is promising a plan to tackle climate change this fall, including an “emissions-reductions fund” but says it will not come from a carbon-tax model.

The province is challenging Ottawa in court over the Trudeau government’s plan to impose a carbon tax on Ontario in the absence of a provincial carbon-pricing program.

Meanwhile, environmental groups led by Greenpeace are suing the province over cancelling cap-and-trade, alleging that the Ford government broke the law by failing to consult Ontarians on the move.

via Science Matters

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October 2, 2018 at 03:13PM

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