How Ontario's Cap-and-Trade and Green Initiatives Could Impact Toronto
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How Ontario’s Cap-and-Trade and Green Initiatives Could Impact Toronto

Liberals propose long-awaited Cap-and-Trade policy.

Cash generated by Ontario’s new cap-and-trade regime could support greenhouse gas reduction efforts already underway in the City of Toronto.

Under the proposed plan, money generated from polluting industries—projected to reach $1.9 billion by 2017-18—will be channeled into a Greenhouse Gas Emission Reduction fund, a cash pool used exclusively to finance programs reducing GHGs throughout Ontario.

Many of the green initiatives up for future investment that are outlined in the budget are already taking place in Toronto, such as:

  • Geothermal solutions and technology to reduce building and neighbourhood GHGs;
  • Supporting the adoption of plug-in and hybrid vehicles;
  • Funding active transportation networks and public transit;
  • Improving waste management practices to reduce GHG emissions coming from waste in landfill.

No specific projects have been targeted for funding just yet; the budget indicated that specific emission-reduction initiatives will be spelled out in an upcoming Climate Action Plan to be released by Liberal Environment and Climate Change Minister Glen Murray. But with a significant number of drivers, institutions and energy-intensive industries located in the Greater Toronto and Hamilton Area, expect a heavy dose of that funding to find its way to GTHA projects.


One of the small-scale ways the Liberals are proposing to fight climate change by reducing GHGs is through home energy retrofits.

Earlier this month, the Liberals announced the roll out of $100 million from the Green Investment Fund to support home improvements. Working with Enbridge Gas Distribution and Union Gas, more than 37,000 homeowners will now be able to conduct energy audits to find ways of making their homes more energy efficient. Projects like installing better insulation and high-grade windows or an energy efficient water heater or furnace can make a big difference in the amount homeowners pay to Toronto Hydro every month.

This expansion of the Green Investment Fund is a significant part of the $325 million for home energy efficiencies first announced in the 2015 Fall economic statement by Finance Minister Charles Sousa.


Beginning in 2017, the Liberal’s cap-and-trade plan would put an as-yet-to-be-determined, province-wide cap on emissions. Permits to pollute would be allocated to energy-intensive industries like steel or cement manufacturing free of charge while pollution allowances would be auctioned off to institutions like universities and hospitals and electricity generators. As the cap on permitted pollution declines over the next five years, polluters will be encouraged to invest in cleaner technologies.

But the plan is not without its costs, many of which will hit Toronto residents and drivers. The price of gasoline is projected to rise 4.3 cents per litre which, on top of a rise in the price of natural gas for heating homes, could cost the average Toronto family an extra $156 a year in fuel costs.

Yet mitigation efforts from home energy retrofit programs will allow homeowners to offset those costs, Sousa told reporters in lock up Thursday. “All of this is about providing for cleaner air and a better environment for our children and grandchildren.”

Beyond future investments from the Greenhouse Gas Emission Reduction fund, the Liberals raised $750 million in Green Bonds from their second round of financing in January 2016. This money, on top of $500 million raised in the first round of Green Bond financing in 2014, will fund three Metrolinx projects—the Eglinton Crosstown, the Regional Express Rail and the vivaNext Bus Rapid Transit in York Region.

The Green Bond cash will also pay for an expansion of the Hazel McCallion campus at Sheridan College in Mississauga and Phase 1B of the Centre for Addiction and Mental Health revitalization on Queen Street West.