Ontario Government Proposal Seeks to Renounce on Carbon Emission Tracking

In November of 2018, the Ontario government canceled the cap and trade program implemented by the former Ontario Liberal government. More recently, and in the same line of policy reasoning, a proposal tendered by the Ontario government on February 7 at 12:00 am would see the mandatory verification for the emissions from fuel sold by Ontario oil and gas companies eliminated. A key issue to the proposal is whether it is intended to rid duplicate administrative reporting and data gathering already present at the federal level, or whether it is effectively an attempt to interfere with and admonish policies that are out of line with the new progressive conservative government of Ontario.

Industry Implications - As alluded to above, if adopted, the industry (specifically, petroleum product suppliers, natural gas distributors, and other large emitters) would be relieved from its obligations to report on emissions emanating from "the consumption of the fuels they supply or distribute". Unaffected by this proposal would be the reporting of direct emissions, and how the government tracks emissions from these sources. In other words, the proposal relates only to the reporting of emissions from the fuel industries.

Underlying RationaleThe rationale underlying this most recent effort by Ontario's government to scale back and eliminate energy policies adopted by the former provincial Liberal government is said to be that of reducing "unnecessary costs and regulatory burden" already present in Federal emissions programs. The posting announcing the provincial government's proposal states that the provincial emissions inventory is sourced from the federal National Inventory Report of the emission sources at issue. In other words, Ontario would continue to rely on federal data to reach its objective of reducing carbon pollution by 30% from 2005 levels.

Constitutional Issue - While the Ontario government has also launched a constitutional challenge to the federal government's carbon pricing system, which includes a fuel charge, the proposal would have no effect on the federal carbon pricing system. The same, which is due to come into full force and effect in Ontario in April, requires fuel suppliers to reduce the emissions intensity of the fuels they sell. To achieve this objective, fuel sold in Ontario would, in essence, need to be compared against a federally-designed baseline. As Ontario is scaling back on its emissions programs, the federal government programs continue to expand its requirements to collect further data related to emissions from facilities in specific industry sectors.

Public consultation on the Ontario government's proposal is now open until March 8, 2019, at 11:59 pm.