Chambers across Ontario continue to push for deferral in provincial cap & trade program to prevent jobs and investment from leaving Ontario

Chambers cite high costs of program on top of skyrocketing electricity prices as well as potential changed policy direction in the United States

(Greater Sudbury) Today chambers across Ontario are continuing the call for a deferral of the Provincial Government’s Cap and Trade program scheduled to be implemented January 1, 2017, citing high costs of the program layered on top of skyrocketing electricity prices, lack of sector by sector economic impact analysis and a potential change in the policy direction of the United States.

In Ontario, since 2004, electricity prices have increased by 383%, from a flat rate of 4.7 cents a kilowatt hour to 18 cents a kilowatt hour at peak times. The introduction of the cap and trade system will add further charges on natural gas, gasoline and diesel fuel that will be felt by every individual and business in Ontario, both large and small.

A recent Auditor General’s report cites that cap and trade will cost businesses and households about $8 billion between 2017 and 2020.  The report also indicates that cap and trade is expected to bring higher electricity prices and outlines that electricity prices are projected to increase by 14% for businesses and 25% for households.

These increases will be even more pronounced in rural Ontario where rural households spend on average 20% more on electricity and 12% more on transportation fuel.

Cap and trade could cost upwards to $10 million per year in the first compliance period for a major mining company in the province.  Cap and trade is estimated to cost one auto parts supplier in Ontario approximately $11,000 per year.  Further, the average Ontario greenhouse vegetable farmer with 13 acres is bracing for an $80,000 cost increase with the introduction of cap and trade.

A coalition of chambers is seeking a sector by sector economic impact analysis of cap and trade. “There are many regulatory details that are still unknown about the cap and trade system, particularly beyond the first compliance period. We need an understanding of the long-term impact of cap and trade in order to avoid unintended consequences on jobs, investment and electricity prices in the province,” said Tracy Nutt, Chair of the Board, Greater Sudbury Chamber of Commerce.

Chambers are also concerned about the uncertainty in the United States and especially those states that are main trading partners with Ontario. With a new President Elect, it is unclear whether or not a majority of states will participate in the cap and trade program.  Deferring the program would allow for an analysis of any new policies that may come from the Trump administration in the United States.  As our number one trading partner, it is important that we examine what other states are doing to ensure we remain competitive.

The Chamber network passed a resolution at the Ontario Chamber of Commerce AGM in May 2016 with a number of recommendations on how to mitigate the risk of cap and trade on business. The first recommendation was that the program be deferred until 2018. The resolution cites the compressed timeframe the province is using to implement the system as a concern. While other jurisdictions such as Quebec and California took several years to develop their cap and trade systems, Ontario has fast-tracked the design and implementation of this system.  We feel that we are moving too fast, particularly in a challenging economic time.

As a result, chambers across Ontario request that the Ontario government delay the implementation of the cap and trade program for at least one year.

“Businesses are already struggling under the weight of ever increasing costs and we are extremely concerned about the impacts of these additional charges on the economy,” added Nutt.



For more information, please contact:

Joyce Mankarios

Policy and Public Relations Manager

Greater Sudbury Chamber of Commerce

705-673-7133 ext. 224

705-677-5735 (cell)