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Cap and Trade System to Limit Greenhouse Gas Pollution in Ontario

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Cap and Trade System to Limit Greenhouse Gas Pollution in Ontario

Provincial System will Reward Innovative Companies and Create More Opportunities for Investment in Ontario

Office of the Premier

To fight climate change -- one of the greatest challenges mankind has faced -- Ontario is putting a limit on the main sources of greenhouse gas pollution through a cap and trade system to protect the air we breathe, the water we drink and the health of our children and grandchildren. 

Climate change is already hurting our environment, causing extreme weather like floods and droughts, and hurting our ability to grow food in some regions. Over the near term, it will increase the cost of food and insurance, harm wildlife and nature, and eventually make the world inhospitable for our children and grandchildren.

In this context, Ontario is joining other jurisdictions, including Québec and California, by imposing a hard ceiling on the pollution allowed in each sector of the economy. Known as cap and trade, this system effectively reduces the amount of greenhouse gas pollution in our atmosphere by setting a limit on emissions, rewarding innovative companies, providing certainty for industries and creating more opportunities for investment in Ontario.

Ontario intends to join the cap and trade system under the Western Climate Initiative. Under the cap and trade system, businesses will have their own greenhouse gas quota and will then be able to sell it if they don't need it because of their own efficiency.

The government will reinvest the money raised through cap and trade in a transparent way back into projects that reduce greenhouse gas pollution and help businesses remain competitive. Projects may include helping families consume less energy through more energy-efficient appliances or housing, building more public transit to reduce the number of vehicles on the road, and helping factories and businesses reduce greenhouse gas pollution. Through cap and trade, Ontario is building on the progress it has already made, such as closing coal plants and continuing to invest in public transit.

Good environmental policy is good economic policy. Reducing our use of fossil fuels, such as coal, oil and gas, will create jobs now and form a central pillar of our prosperity in the coming years.

Fighting climate change while keeping industries competitive and strong is part of the government's economic plan for Ontario. The four-part plan is building Ontario up by investing in people's talents and skills, building new public infrastructure like roads and transit, creating a dynamic, innovative environment where business thrives, and building a secure retirement savings plan. 

Quick Facts

  • Ontario has the fastest growing clean-tech sector in Canada, with 2,700 clean-tech firms employing 65,000 people and generating annual revenues of more than $8 billion.
  • With Ontario’s introduction of a cap and trade system, more than 75 per cent of Canadians will live in a province with some form of carbon pricing.
  • Ontario’s actions to close coal-fired electricity plants, curb the use of cosmetic pesticides and protect 1.8 million acres of land have resulted in fewer smog days and cleaner water.
  • Ending coal-fired power is the single largest greenhouse gas reduction initiative in North America, equivalent to taking seven million cars off the road.
  • Ontario will host a Climate Summit of the Americas from July 7-9, 2015, to advance collaborative action on climate change ahead of the Conference of the Parties in Paris in December.
  • During Ontario’s comprehensive public and stakeholder consultations on climate change, more than 1,500 people attended in-person consultations in locations across the province, and more than 300 ideas and 31,000 votes were submitted through the online consultation tool.

Background Information

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“Climate change is a problem that is both critically important and urgent. It is causing extreme weather events, which can increase insurance costs, hurt wildlife, damage our environment and affect farming. Climate change needs to be fought around the globe, and it needs to be fought here in Canada and Ontario. The action we are taking today will help secure a healthier environment, a more competitive economy and a better future for our children and grandchildren.”

Kathleen Wynne

Premier of Ontario

“We face two critical challenges with climate change. We must reduce greenhouse gas pollution fast enough to avoid a crisis, and in so doing, seize the opportunities of a low-carbon economy. Today we are taking strong action to help us meet both of those challenges.”

Glen Murray

Minister of the Environment and Climate Change



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