Bill 185, Environmental Protection Amendment Act (Greenhouse Gas Emissions Trading), 2009

Gerretsen, Hon John Minister of the Environment

Current Status: Royal Assent received Chapter Number: S.O. 2009 C.27

Viewing: Royal Assent (current version) pdf

Bill 185                                                        2009

An Act to amend the Environmental Protection Act with respect to greenhouse gas emissions trading and other economic and financial instruments and market-based approaches

Note: This Act amends the Environmental Protection Act.  For the legislative history of the Act, see the Table of Consolidated Public Statutes – Detailed Legislative History at www.e-Laws.gov.on.ca.

Preamble

The Intergovernmental Panel on Climate Change (IPCC) that was set up by the World Meteorological Organization and by the United Nations Environment Programme has concluded that warming of the climate system is unequivocal and that most of the observed increase in global average temperatures is due to human activities.

Strong and sustained action is required to minimize the risks posed by climate change.

Taking action now to reduce greenhouse gas emissions is less costly than the potentially severe economic impacts that are risked by inaction. Cap and trade systems are flexible, market-based approaches that can help to reduce greenhouse gas emissions and encourage technological innovation, economic growth and job creation.

In June 2008, the governments of Ontario and Quebec agreed to collaborate on a greenhouse gas cap and trade initiative.  In July 2008, Ontario joined the Western Climate Initiative, which also includes Arizona, British Columbia, California, Manitoba, Montana, New Mexico, Oregon, Quebec, Utah and Washington, in working on a regional cap and trade system.  These linkages with other jurisdictions and a potential broader North American cap and trade system can provide emission reductions at lower cost, improve the pace of innovation and allow for larger trading volumes and improved liquidity.

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

   1.  Subsection 1 (1) of the Environmental Protection Act is amended by adding the following definition:

“greenhouse gas” means,

  (a)  carbon dioxide,

  (b)  methane,

   (c)  nitrous oxide,

  (d)  hydrofluorocarbons,

  (e)  perfluorocarbons,

    (f)  sulphur hexafluoride, or 

  (g)  any other contaminant prescribed as a greenhouse gas by the regulations; (“gaz à effet de serre”)

   2.  (1)  Section 176.1 of the Act is repealed and the following substituted:

Regulations, market-based approaches, etc.

   176.1  (1)  The Lieutenant Governor in Council may make regulations establishing programs and other measures for the use of economic and financial instruments and market-based approaches, including without being limited to emissions trading, for the purposes of maintaining or improving existing environmental standards, protecting the environment and achieving environmental quality goals in a cost effective manner.

Same, included powers

   (2)  Without limiting the generality of subsection (1), the power to make regulations under subsection (1) includes the power to make regulations,

  (a)  prescribing the persons, entities and facilities to which programs and other measures established under subsection (1) apply;

  (b)  governing the economic and financial instruments to be used in programs and other measures established under subsection (1), including,

           (i)  providing for the instruments to be created by or in accordance with the regulations and governing the creation of those instruments,

          (ii)  providing for instruments created by the regulations under subclause (i) to be distributed free of charge, and governing the distribution of those instruments,

         (iii)  governing the use, trading and retirement of instruments created by or in accordance with the regulations under subclause (i),

         (iv)  governing the use and trading, for the purpose of programs and other measures established under subsection (1), of instruments created in other jurisdictions, and

          (v)  requiring notice to be given to other jurisdictions of the use or trading, for the purpose of programs and other measures established under subsection (1), of instruments created in those jurisdictions;

   (c)  prescribing requirements that must be met by persons, entities and facilities to which programs and other measures established under subsection (1) apply, including requirements related to the emission, monitoring and reporting of contaminants;

  (d)  attributing emissions to a person, entity or facility for the purpose of programs and other measures established under subsection (1);

  (e)  providing for or designating a person or body to administer programs and other measures established under subsection (1).

Same, powers under ss. 175.1 and 176 (1)

   (3)  Without limiting the generality of subsection (1), with respect to programs and other measures established by regulations made under that subsection, the power to make regulations under subsection (1) includes the power to make any regulation that may be made under section 175.1 or subsection 176 (1).

   (2)  Section 176.1 of the Act, as re-enacted by subsection (1), is amended by adding the following subsections:

Same, greenhouse gases

   (4)  A regulation under this section that relates to greenhouse gases may,

  (a)  provide for instruments created by the regulations under subclause (2) (b) (i) to be distributed free of charge, or by auction, sale or other means that are not free of charge, and governing the distribution of those instruments;

  (b)  authorize a person or body to prescribe, govern or otherwise determine any matter that may be prescribed, governed or otherwise determined by the Lieutenant Governor in Council under this section.

Same

   (5)  Without limiting the generality of clause (4) (a), a regulation under that clause may,

  (a)  prescribe objectives and other matters that must be considered in setting the percentages of instruments to be distributed by any of the means referred to in clause (4) (a);

  (b)  prescribe objectives and other matters that must be considered in setting reserve bids for instruments distributed by auction or sale prices for instruments distributed by sale.

Greenhouse Gas Reduction Account

   (6)  Any amount paid to the Minister of Finance from the distribution of instruments under the regulations made under clause (4) (a) shall be deposited in a separate account in the Consolidated Revenue Fund to be known in English as the Greenhouse Gas Reduction Account and in French as Compte de réduction des gaz à effet de serre.

Same

   (7)  For the purpose of the Financial Administration Act, money deposited in the Greenhouse Gas Reduction Account shall be deemed to be money paid to Ontario for the special purpose described in subsection (8).

Payments out of account

   (8)  Money may be paid out of the Greenhouse Gas Reduction Account for the purpose of reimbursing the Crown in right of Ontario for costs incurred by the Crown in administering the regulations under this section that relate to greenhouse gases and in carrying out or supporting greenhouse gas reduction initiatives, particularly initiatives that relate to the sectors of the Ontario economy to which the regulations apply.

Same

   (9)  Without limiting the generality of subsection (8), money may be paid out of the account under that subsection with respect to the following costs:

    1.  The costs of research into or the development or deployment of lower greenhouse gas emitting technologies in a sector of the Ontario economy to which the regulations under clause (4) (a) apply.

    2.  The costs of programs to reduce greenhouse gas emissions in a sector of the Ontario economy to which the regulations under clause (4) (a) apply.

    3.  The costs of infrastructure or equipment to reduce greenhouse gas emissions in a sector of the Ontario economy to which the regulations under clause (4) (a) apply.

    4.  If the regulations made under clause (4) (a) apply to the electricity sector of the Ontario economy, costs of any greenhouse gas reduction initiative that would otherwise be borne by electricity consumers.

Commencement

   3.  (1)  Subject to subsection (2), this Act comes into force on the day it receives Royal Assent.

Same

   (2)  Section 1 and subsection 2 (2) come into force on a day to be named by proclamation of the Lieutenant Governor.

Short title

   4.  The short title of this Act is the Environmental Protection Amendment Act (Greenhouse Gas Emissions Trading), 2009.

 

EXPLANATORY NOTE

This Explanatory Note was written as a reader’s aid to Bill 185 and does not form part of the law.  Bill 185 has been enacted as Chapter 27 of the Statutes of Ontario, 2009.

The Bill re-enacts section 176.1 of the Environmental Protection Act, which authorizes the making of regulations relating to emissions trading and other economic and financial instruments and market-based approaches.  The new subsections 176.1 (2) and (3) of the Act clarify the existing authority.  For example, new subclauses 176.1 (2) (b) (i), (ii) and (iii) make clear that the regulations may provide for economic and financial instruments to be created by or in accordance with the regulations, may provide for instruments created by the regulations to be distributed free of charge, and may govern the use, trading and retirement of instruments created by or in accordance with the regulations.

With respect specifically to greenhouse gases, the new subsection 176.1 (4) contains additional authority to permit the regulations to provide for economic and financial instruments created by the regulations to be distributed by auction, sale or other means (as a possible alternative to distributing those instruments free of charge), and would permit the regulations to subdelegate regulation-making powers to another person or body. The new subsections 176.1 (6) and (8) require amounts paid to the Minister of Finance from the distribution of these instruments to be deposited in a separate account in the Consolidated Revenue Fund that is used to reimburse the Crown for costs incurred in administering the greenhouse gas regulations and in supporting greenhouse gas reduction initiatives.

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