Ontario and Quebec announce cap-and-trade alliance

Cap-and-trade is coming to central Canada. Premiers Dalton McGinty and Jean Charest announced this week that Ontario and Quebec would work together to implement a cap-and-trade system for the two provinces. The target will be to reduce emissions to 1990 levels (which would still fall short of Canada's Kyoto commitments). Premier McGinty said the system should be implemented by 2010.

No other details of the proposal have been released. However, it is expected that the Ontario-Quebec system will be modelled at least in part on the Western Climate Initiative ("WCI"). The WCI is an alliance of states and provinces that will implement a regional cap-and-trade system. Quebec is a WCI member (as are Manitoba and BC) and Ontario is a registered observer. WCI released Draft Design Recommendations for its cap-and-trade system on May 16, 2008 (see our related posting) and will be issuing its final recommendations in September. BC has already indicated that it intends to harmonize its provincial cap-and-trade system with that implemented by the WCI. It is likely that Quebec and Ontario will follow suit.

As reported by the CBC, the announcement by Ontario and Quebec was met with scorn from Ottawa. Federal Environment Minister John Baird accused Premiers McGuinty and Charest of "political posturing" and claimed that "What the premiers are talking about is much in the line of what we're doing, but it's just talk." The Premiers got in their own jabs, with McGuinty accusing the Federal Conservatives of having a lack of imagination and Charest noting that the rest of the world is moving towards a cap-and-trade model, not the intensity-based approach being taken by Ottawa. Federal NDP leader Jack Layton also jumped into the fray, saying that the Premiers were filling a "vacuum of leadership" on the issue of cutting greenhouse gas emissions.