On the day Premier Doug Ford pulled Ontario out of an international clean energy trading market, it spelled the end for 227 emissions-reducing projects across the province, reveals a leaked document.
A full list of the cancelled projects assembled by a government source — based on information obtained through their role and through multiple information requests — was shared exclusively with National Observer detailing a breakdown, by municipality, of the $2.9-billion fund the province had collected through the cap and trade agreement, revealing that those most affected by the cancellation were students, low-income Ontarians, municipalities and commuters.
Until now, details of what kind of projects that money was allocated for were scant, but the leaked list reveals a wide range of initiatives set to reduce greenhouse gas emissions that lost their funding, including schools, hospitals, small businesses and several social housing providers.
According to the leaked document, in Ontario, the money was set to fund 120 commuter cycling programs (each worth $25,000) in 120 jurisdictions across the province. It was set to help develop 41 green social housing programs, and 20 improvement or retrofit projects for social housing apartments. It was also going to go toward 11 electric vehicle charging stations and one electric-bus pilot in the city of Brampton (Canada's ninth largest city).
Some of these projects had already taken off and allocated funding over four years — all of which has now been revoked, on top of 758 renewable energy contracts and other cuts for climate action funds for the 50 Million Tree Program, electric and hydrogen vehicle incentive programs and flood management by conservation authorities.
Standing on the steps of Queen's Park on June 29, 2018, the day he was sworn in as premier, Ford affirmed his government's first policy change would be Ontario’s withdrawal from the cap-and-trade carbon market with Quebec and California. The pledge was greeted with huge applause and cheers. The bill that made the withdrawal official passed in November of that year.
Later, Ontario's fiscal watchdog would find the cancellation of cap and trade will cost $3 billion in lost revenue over the next four fiscal years.
The biggest portion of cap and trade money went to the city of Toronto
The cap and trade agreement was set up by the former Liberal government and served as a multi-national pollution pricing system between Ontario, Quebec and California, who collectively agree to tailored limits — or caps — on the greenhouse gas emissions that large industrial polluters in each jurisdiction can emit every year.
Under this system, companies are able to purchase allowances to offset the pollution they expect to emit over a given period. All the revenues generated through the sale of these allowances go directly into government coffers and are then dedicated to green energy projects. And if a company emits less than the expected amount, they can sell their allowances to other companies that emitted more.
According to the Environmental Commissioner of Ontario (ECO), whose office the Ford government shuttered earlier this year, cap and trade raised almost $2.9 billion in government revenues from six auctions since January 2017 — $2.4 billion up to March 31, 2018, and $472 million in the final May 2018 joint auction with California and Quebec. The money was tracked in the Greenhouse Gas Reduction Account (GGRA) and used to “fund, directly or indirectly, costs relating to initiatives … that are reasonably likely to reduce, or support the reduction of greenhouse gas.”
As of March 31, 2018, the government had authorized $2.3 billion in spending commitments for GGRA initiatives. Of this amount, almost $1.9 billion was released to cover GGRA-related costs incurred by individual ministries, although actual spending was slightly lower, at $1.85 billion, likely due to delays in project implementation, the ECO found.
According to the list obtained by National Observer, the 227 cancelled projects amounted to about $1.88 billion allocated to projects in municipalities.
A second source familiar with the file said the sum didn’t account for more than $240 million allocated outside the 227 projects for industries, small and medium businesses and Ontario’s food and beverage program. This money was allocated through the Green Ontario fund (financed through cap and trade money), which provided grants to incentivize industries to reduce carbon pollution.
Of the $1.88 billion shown in the leaked document, $1.39 billion (74 per cent) went to the public sector, over $226 million (12 per cent) went to the private sector, more than $20 million (1 per cent) went to non-profits, and $245 million (13 per cent) went to individuals.
Most of this money was distributed to jurisdictions in the Greater Toronto Area and central Ontario. According to the ECO, these two regions account for 70 per cent of Ontario’s population (per 2017 numbers) and are experiencing rapid population growth.
The biggest portion of money went to the city of Toronto, which received $500 million for programs such as:
- A green fleet acceleration project to help convert almost 10,000 on-road and off-road emergency vehicles (including paramedics, fire and police) to low-carbon vehicles
- A renewable thermal energy system at the Etobicoke Civic Centre (in Doug Ford's riding) to make it Toronto’s first net-zero community
- The city’s first net-zero facility — an early learning and childcare centre — in the Mount Dennis neighbourhood
- A building-wide energy retrofit of Toronto Paramedic Services headquarters to create energy savings
- The Toronto Transit Commission's replacement of 30 clean diesel buses with 30 battery-powered electric buses
- A geothermal system for St. Lawrence market — a major public food market building in downtown Toronto
Several Ontario jurisdictions received between $20 million and $40 million from the fund, including Hastings, Niagara, Durham, Waterloo, Wellington, York, Peterborough, Thunder Bay and Halton.
Over 17 per cent (over $323 million) of the cap and trade fund went to transit providers to facilitate a shift toward clean energy vehicles, according to the list. Some 15 per cent ($282 million) went to social housing providers, and 13 per cent ($245 million) was given to private clean energy enterprises.
Approximately 10 per cent was given school boards for various retrofit programs and green initiatives.
Some of these initiatives were more innovative than others, such as the Haliburton Village Community Bioheat System — the county's first wood-fuelled district heat system for its downtown area. The systems involve a central energy centre, where wood chips would be burned in specialized equipment, heating water in a boiler, that is then distributed throughout a series of underground pipes, providing heat and water heating to buildings. While the technology is only emerging in Canada, it is widespread in Europe, particularly in the Scandinavian countries.
A breakdown of cap and trade funds by recipient. Graphic by Fatima Syed
In total, 54 Ontario jurisdictions received funding for 61 social housing provisions, specifically, until 2022. (41 of these social housing projects were funded through GreenON.)
Once again, the city of Toronto lost the most money in this regard, seeing $180 million pulled for the next three years out of its green social housing improvement program. The city of York (just north of Toronto) lost $13.3 million for social housing and the city of London lost more than $8 million over the next three years.
Only Brampton and three central Ontario cities lost their 2018-19 funding when cap and trade was cancelled in November 2018. By the time it was axed, Brampton had received more than $14.9 million, while the cities of Peterborough and Stratford had received more than $736,000 each, and the county of Brant had been given $825,000.
'Cap and trade' mentioned four times in Ford's first budget
In California, cap and trade funds have been collected from polluters and spent to slash greenhouse gas emissions. Last year, the state spent US$1.4 billion on such efforts, investing in everything from electric cars, solar panels and clean energy transit lines. These programs have helped clean the air of pollution that makes people sick — reducing particulate emissions by 474 tons in 2018. The fund is also being used to reduce the amount of water that Californians use and to plant millions of trees.
Quebec also elected a right-leaning government in 2018, but it chose to continue the province’s participation in cap and trade, committing to reduce greenhouse gas emissions.
In Ontario, the cancellation of cap and trade is shown as lost revenue in the Ford government's first budget. It is mentioned only four times in the 382-page financial document, with few details about where the cap and trade funds the government had in its coffers had been spent. (In previous interviews, Ministry of Environment spokespeople have said the remaining money in the cap and trade coffer will allocated for "wind-down costs.")
The bill to cancel cap and trade was introduced by then-environment minister Rod Phillips in July 2018 but the final vote was delayed when Greenpeace launched legal action against the government, alleging the province failed in its duty to hold public consultations on the issue, as demanded by the Ontario’s Environmental Bill of Rights.
"It was a great day for Ontarians," Phillips said as he celebrated the passage of his first bill as cabinet minister in November 2018. He said the move would save each Ontarian $264 a year, money they would have had to pay under the former cap and trade system. Ontario’s fiscal watchdog, however, recently said the cancellation of cap and trade will worsen the province's deficit by $3 billion.
“It was costly, it was ineffective, it was killing jobs," Phillips, the now finance minister said of the program at the time. "It’s gone, today.”
But his comments were inaccurate. Ontario's environmental commissioner — along with a Nobel prize-winning economist and much scientific research — touts the cap and trade program as the most cost-effective and efficient way to reduce the heat-trapping greenhouse gas emissions that contribute to climate change. British Columbia, California and several European nations who have carbon pricing programs have reduced their emissions while maintaining strong economies.
Do you have more information about the projects funded by Ontario's cap and trade program? Get in touch: [email protected]