Ontario cap-and-trade revenues expected to be smaller than previous estimates

TORONTO – Ontario expects to get less money this year and next from its cap-and-trade program than originally estimated.

The Liberal government estimated in last year’s budget that the program would bring in $1.9 billion per year, but this year’s budget projected $1.8 billion for this fiscal year, and $1.4 billion annually starting in 2018-19.

READ MORE: Ontario’s first cap-and-trade auction sells out current allowances

The system aimed at lowering greenhouse gas emissions puts caps on the amount of pollution companies in certain industries can emit and if they exceed those limits, they must buy allowances at auction or from other companies that come in under their limits.

Environment Minister Glen Murray says the $1.9 billion represented the revenue from the program if every auction was sold out, so instead the government is budgeting for an 80-per-cent average of allowances sold at the auctions.

READ MORE: Ontario gas prices increase due to province’s cap-and-trade program

The government plans to use cap-and-trade money for green initiatives such as social housing retrofits, an electric vehicle incentive program and public transit.

Murray says lower revenue wouldn’t mean any of those programs were cancelled, it would just mean a bit less money for each.