Cap and Trade Cancellation Act, 2018, S.O. 2018, c. 13 - Bill 4

• Jurisdiction: Ontario
• Bill Number: 4
• Date: 31 October 2018

EXPLANATORY NOTE

This Explanatory Note was written as a reader’s aid to Bill 4 and does not form part of the law. Bill 4 has been enacted as Chapter 13 of the Statutes of Ontario, 2018.

The Bill sets out the Cap and Trade Cancellation Act, 2018, which repeals the Climate Change Mitigation and Low-carbon Economy Act, 2016 and provides for various matters related to the wind down of the Cap and Trade Program.

Under the Cap and Trade Cancellation Act, 2018, the Government is required to establish targets for reducing the amount of greenhouse gas emissions in Ontario. The Minister of Environment, Conservation and Parks is required to prepare a climate change plan and to prepare progress reports in respect of the plan.

With respect to the wind down of the Cap and Trade Program, the matters addressed by the Act include the following:

1. The retirement and cancellation of cap and trade instruments.

2. The payment by the Crown of compensation in respect of cap and trade instruments, the amount of which is to be determined in accordance with the regulations. The obligation to pay compensation is subject to various limitations set out in the Act.

3. Preventing any cause of action from arising against the Crown and specified related persons as a result of various specified matters, including the enactment of the Act and the repeal of the Climate Change Mitigation and Low-carbon Economy Act, 2016.

4. The extinguishment of any existing proceedings, and the prevention of any future proceedings, against the Crown and other specified related persons, in relation to specified matters.

chapter 13

An Act respecting the preparation of a climate change plan, providing for the wind down of the cap and trade program and repealing the Climate Change Mitigation and Low-carbon Economy Act, 2016

Assented to October 31, 2018

Contents

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

General

Interpretation

1 (1) In this Act,

“cap and trade accounts” means, in relation to a participant, the cap and trade accounts that were established under the Climate Change Mitigation and Low-carbon Economy Act, 2016 for the participant; (“comptes du programme de plafonnement et d’échange”)

“cap and trade instrument” means an instrument described in subsection (2); (“instrument du programme de plafonnement et d’échange”)

“CO2e” means, when used in reference to a quantity of greenhouse gas, the equivalent quantity of carbon dioxide, calculated in accordance with the regulations; (“éq. CO2”)

“greenhouse gas” means a prescribed greenhouse gas; (“gaz à effet de serre”)

“Minister” means the Minister of the Environment, Conservation and Parks or such other member of the Executive Council as may be assigned the administration of this Act under the Executive Council Act; (“ministre”)

“participant” means a person who was registered as a mandatory participant, a voluntary participant or a market participant under the Climate Change Mitigation and Low-carbon Economy Act, 2016 on July 3, 2018; (“participant”)

“person” includes an individual, corporation, partnership, sole proprietorship, association or any other organization or entity; (“personne”)

“prescribed” means prescribed by a regulation made under this Act. (“prescrit”)

Cap and trade instrument

(2) For the purposes of the definition of “cap and trade instrument” in subsection (1), a cap and trade instrument means one of the following:

1. An Ontario emission allowance within the meaning of subsection 1 (1) of the Climate Change Mitigation and Low-carbon Economy Act, 2016 as that provision read immediately before the repeal of that Act.

2. An Ontario credit within the meaning of subsection 1 (1) of the Climate Change Mitigation and Low-carbon Economy Act, 2016 as that provision read immediately before the repeal of that Act.

3. An instrument that was, on July 2, 2018, set out in Column 1 of the Table to section 10.1 of Ontario Regulation 144/16 (The Cap and Trade Program) made under the Climate Change Mitigation and Low-carbon Economy Act, 2016.

Attribution of emissions

2 (1) For the purposes of this Act, the amount of all greenhouse gas emissions attributed to a participant is the amount prescribed by the regulations or determined in accordance with the regulations.

Same

(2) Despite subsection (1), in prescribed circumstances the amount of greenhouse gas emissions shall be determined by the Minister in accordance with the regulations.

Opportunity to be heard

(3) If the Minister proposes to determine the amount of greenhouse gas emissions to be attributed to a participant, the Minister shall give the participant notice of the proposal in accordance with the regulations and shall, in accordance with the regulations, give the participant an opportunity to be heard.

Equivalence in CO2e

(4) Each cap and trade instrument is equivalent to one tonne of CO2e or such other amount of CO2e as may be prescribed.

Targets, Plan and Progress Reports

Targets

3 (1) The Government shall establish targets for the reduction of greenhouse gas emissions in Ontario and may revise the targets from time to time.

Public notice

(2) The Government shall make the targets and any revisions to them available to the public on a website of the Government or in such other manner as may be prescribed.

Climate change plan

4 (1) The Minister, with the approval of the Lieutenant Governor in Council, shall prepare a climate change plan and may revise the plan from time to time.

Advisory panel

(2) The Minister may, for the purpose of taking any steps with respect to the climate change plan, appoint panels to perform such advisory functions as the Minister considers advisable.

Public notice

(3) The Minister shall make the plan and any revisions to it available to the public on a website of the Government or in such other manner as may be prescribed.

Status

(4) For greater certainty, the plan and any revisions to it are not undertakings within the meaning of the Environmental Assessment Act.

Minister’s progress reports

5 (1) The Minister shall, on a regular basis, prepare reports in respect of the climate change plan.

Public notice

(2) The Minister shall make each report available to the public on a website of the Government or in such other manner as may be prescribed.

Cap and Trade Instruments

Retirement of eligible instruments

Eligible instrument

6 (1) In this section,

“eligible instrument” means a cap and trade instrument that,

(a) was held in the cap and trade accounts of a participant on July 3, 2018, and

(b) is not classified with or assigned a vintage year of 2021.

Retirement

(2) Eligible instruments of a participant are retired as follows:

1. If the number of eligible instruments of the participant is equal to or greater than that aggregate amount of all greenhouse gas emissions attributed to the participant in respect of the prescribed time period, the number of eligible instruments equivalent to that aggregate amount shall be retired.

2. If the number of eligible instruments of the participant is less than the aggregate amount of all greenhouse gas emissions attributed to the participant in respect of the prescribed time period, all of the eligible instruments shall be retired.

Cancellation of instruments

7 The following cap and trade instruments are cancelled:

1. All cap and trade instruments held in the cap and trade accounts of participants on July 3, 2018, other than any number of cap and trade instruments in the accounts that are retired under section 6.

2. All cap and trade instruments that were created under the Climate Change Mitigation and Low-carbon Economy Act, 2016 and were never distributed.

Compensation in Respect of Cap and Trade Instruments

Compensation to participant

8 (1) The Crown shall pay compensation, out of money appropriated under section 11 or money otherwise appropriated for such purposes by the Legislature, to a participant in accordance with this section and the regulations.

Emissions to be expressed as equivalent number of cap and trade instruments

(2) For the purposes of applying this section, the number of tonnes of greenhouse gas emissions shall be expressed as the equivalent number of cap and trade instruments, as determined in accordance with subsection 2 (4).

If instruments distributed free of charge do not exceed aggregate emissions

(3) If the number of instruments that were distributed free of charge to the participant under the Climate Change Mitigation and Low-carbon Economy Act, 2016 is equal to or less than the aggregate amount of all greenhouse gas emissions attributed to the participant in respect of the prescribed time period, the maximum number of cap and trade instruments in respect of which compensation may be paid to a participant shall be determined by applying the following formula:

A = B − C

where,

A = the maximum number of cap and trade instruments in respect of which compensation may be paid to the participant,

B = the number of cap and trade instruments held in the participant’s cap and trade accounts that are cancelled under paragraph 1 of section 7, and

C = the number of the participant’s cap and trade instruments referred to in “B” that are classified with or assigned a vintage year of 2021.

If instruments distributed free of charge exceed aggregate emissions

(4) If the number of instruments that were distributed free of charge to the participant under the Climate Change Mitigation and Low-carbon Economy Act, 2016 is greater than the aggregate amount of all greenhouse gas emissions attributed to the participant in respect of the prescribed time period, the maximum number of cap and trade instruments in respect of which compensation may be paid to a participant shall be determined by applying the following formula:

A = (B − C) − (D − E)

where,

A = the maximum number of cap and trade...