Ontario’s fiscal watchdog says the Progressive Conservative government’s decision to end the cap-and-trade system will result in the loss of $3 billion in revenue over the next four fiscal years.
The Financial Accountability Office says in a report released today that the loss of revenue is greater than the savings achieved by cutting spending associated with the program, and will worsen Ontario’s budget position.
The FAO also says that in the long run, the cap-and-trade system would have cost Ontario families less than the federal carbon tax.
The office estimates that under cap and trade, the typical Ontario household would pay $312 in additional costs by 2022, compared to $648 under the federal system by the same year.
Premier Doug Ford campaigned on a pledge to cancel cap and trade during the spring election and has vowed to challenge the imposition of a federal carbon tax in court.
Cap and trade, which was introduced by the previous Liberal government, puts caps on the amount of pollution companies in certain industries can emit. If they exceed those limits, they must buy allowances at auction or from other companies that come in under their limits.