While many are planning New Year’s resolutions that involve saving money for 2017, the government will be taking a little more from your pocketbook.
The Liberal government’s new cap-and-trade plan takes effect on January 1st, 2017.
Under the program, industries and businesses are given specific pollution limits, but can sell their emission allowances to other companies if they come in below their annual limit, or buy credits if they exceed it. Under this new legislation, natural gas providers, for example, must buy emission allowances for the amount used by residential and business customers. These “recovery” costs will then be passed on to consumers.
According to a study commissioned by the province, that means people in Ontario will be paying more to fill up their cars and heat their homes in the coming years.
The cap-and-trade is expected to cost about 3.3 cents per cubic metre (m3) of natural gas used in 2017. The cost will depend on how much gas you use, but for the average Ontario household, the additional annual expense is estimated to be about $70 to $80 in 2017.
According to Enbridge Gas, a typical residential customer uses about 2,400 cubic metres of natural gas a year for home and water heating. Based on a cap-and-trade rate of 3.3 cents/m3, a typical residential customer would pay $6.70 on average per month for a total annual bill impact of about $80.
The price of gasoline for motorists is expected to climb about 4.3-cents/litre on average.
On a year basis, cap-and-trade will likely cost the average household about $156.
Premier Kathleen Wynne says this is big step towards curbing greenhouse gas emissions and battling climate change.
“People don’t want to pay more, and I get that, but I also know that people want to see results, they want to see us taking part there, you know, there’s a lot of support for having clean air, and taking pollution out of the air in the province,” said Wynne.
The Ontario premiere says money raised by the cap and trade scheme will go into growing the economy and fighting emissions, such as funding more public transit projects.
The province says cap-and-trade will not make your electricity more expensive. The consumption of electricity is 90 per cent emissions-free partly due to the province’s plan to phase out coal-fired power generation. However, due to the rising cost of electricity, Ontario is removing the eight per cent provincial share of the Harmonized Sales Tax on bills as of Jan. 1. This is expected to result in savings of $130 for the average household per year. Rural ratepayers could receive additional relief resulting in $540 a year in savings.
With files from David Shum, Global News