The federal government has approved Ontario’s plan to charge industry for carbon pollution, even though it is “clearly weaker” than what Ottawa intended.

In a statement Monday, federal Environment Minister Jonathan Wilkinson said Premier Doug Ford’s program “meets the minimum stringency requirements” to replace Ottawa’s version and the government is “required” to sign off.

“However, the proposed Ontario system is clearly weaker than the federal backstop system that it would be replacing,” the statement said.

“It is therefore not consistent with a long-term climate plan aimed at significantly reducing greenhouse gas emissions.”

A federal government source speaking on background told Canada’s National Observer the Ford government had found a way to “become creative” in its interpretation of Ottawa’s minimum benchmark and “game the system.”

“This is not what we wanted,” the source said, adding that the situation is “disappointing.”

“(The federal standard) wasn’t intended to drive to the lowest common denominator.”

The announcement amounts to a temporary ceasefire in the fight between Ontario and the federal government over the emissions reduction plan. That disagreement is the subject of hearings that will go ahead at the Supreme Court of Canada this week, with Ontario, Alberta and Manitoba arguing that Ottawa doesn’t have the jurisdiction to impose carbon pricing. (The federal Liberal government, meanwhile, says the need to reduce emissions and combat the climate crisis is a national issue.)

The federal Liberals passed a law in 2018 to create a national price on carbon, to be imposed as a backstop if provinces lacked an adequate version of their own. The federal plan includes a system for heavy industrial emitters, and a fuel tax — which has been opposed by Ford and other conservative politicians — that gives a rebate to consumers.

Ford cancelled Ontario’s previous cap-and-trade system for reducing carbon emissions in 2018, meaning Ontario fell under the federal backstop. Now, Ontario’s plan for industrial emitters can replace the federal one, but Ottawa’s fuel tax and rebate will remain in place pending the results of the Supreme Court case.

In a letter dated Sunday and provided to Canada’s National Observer, Wilkinson told his Ontario counterpart, Environment Minister Jeff Yurek, that the federal government plans to spend the coming months working on a plan to tighten the benchmark standards after 2022.

"The proposed Ontario system is clearly weaker than the federal backstop system that it would be replacing,” federal Environment Minister Jonathan Wilkinson said in a statement. #cdnpoli #onpoli

In the letter, Wilkinson said despite promises from the Ontario government, federal modelling shows the province's plan would “achieve substantially fewer reductions” than Ottawa’s system. Wilkinson also said the level of emissions reduction that would happen under Ontario's proposal is “concerning.”

“I would like our departmental officials to continue to work together in order to discuss design changes that would enable (the Ontario plan) to achieve greater emissions reductions,” Wilkinson wrote.

“It is important that Ontario do its part in reducing greenhouse gas pollution.”

The federal government delivered a similar message to New Brunswick Monday, approving its emissions proposal but calling it weaker than the federal backstop.

In a statement Monday, Yurek hailed the federal government’s decision as a victory. The Ontario system would be phased in more gradually than the national one, saving businesses from an “initial shock,” he said.

“This program balances our province’s plan to fight climate change, as we work towards our 2030 greenhouse gas reduction targets under the Paris agreement, with economic growth as economies in Ontario and across Canada are struggling due to impacts of COVID-19,” the statement said.

Ontario Green Party Leader Mike Schreiner said the provincial government’s plan lets polluters off the hook.

“Doug Ford’s plan for big polluters barely made the grade and will not come close to meeting Ontario’s climate obligations,” he said in a statement.