Ford takes on cap and trade for his first action as premier, but details remain scant

Premier-designate Doug Ford has vowed to scrap Ontario's cap-and-trade program as his first act as premier, although he remains short on the details for what will follow.

In a Friday morning press announcement, Ford said Ontario would serve notice of its intention to withdraw from the Western Climate Initiative cap-and-trade market that was established with Quebec and California, and that the province would also withdraw from the August auction for cap-and-trade credits.

"We're going to go back to the legislature, we'll create legislation, and we'll get rid of it," Ford said of cap and trade. "We're going to stop the government from gouging the people."

But the premier-designate did not answer a question from QP Briefing on how much withdrawal would cost, what the timeline would look like or when he would recall the legislature.

Ford stood behind a podium placard that read "scrap the carbon tax," although Ontario does not have a carbon tax. A carbon tax could be implemented by the federal government if cap and trade is repealed. But Ford pushed back against any form of carbon pricing, saying that he'll give "specific directions to his incoming attorney general to use all available resources at the disposal of the government to challenge the federal government's authority to arbitrarily impose a carbon tax."

Legal experts are mostly skeptical that a provincial challenge to the federally imposed carbon tax would be successful.

The NDP took a dim view of Ford's announcement. In a statement, Toronto-Danforth MPP-elect Peter Tabuns criticized the PC approach to environmental issues. "Scrapping all clean-air and climate change initiatives will hurt Ontario – and doing that without any sort of a replacement carbon reduction initiative is completely irresponsible."

The new administration's push to end cap-and-trade also leaves many unanswered questions.

Companies have purchased $2.8 billion worth of cap-and-trade credits until 2020. If the carbon pricing system is immediately repealed, the credits are essentially worthless. Keith Brooks of advocacy group Environmental Defence stated this could cause complications for the government. "The Ontario government will need to find billions of dollars to buy back those permits, or risk being sued."

The WCI agreement requires that jurisdictions give at least one year's notice before withdrawing from the cap-and-trade market, and failing to do so could risk a lawsuit. But Ford dismissed those concerns in his presser, saying that the companies that purchased credits will be happy with the change. "They're going to be quite happy that they won't be paying in the future," he said, although the companies have already locked in significant sums of money to exceed emissions limits over the next 18 months. Asked whether he was opening himself up to a lawsuit by not waiting for a year, Ford said: "I don't believe so. We've looked at the math, we don't see a problem."

He did not answer a question on whether companies will be reimbursed for their credits, and instead focused on his announcement for lower gas prices.

Brooks also cautioned that repealing cap-and-trade would mean losing a lot of programs and initiatives that it funded. "This means no more money to help businesses become more energy efficient, no money for social housing energy retrofits, and no money for colleges, universities and hospitals to reduce their energy use," he said in a statement. "It means no funding for cycling infrastructure, electric vehicles, and public transit. And it likely means an end to programs aimed to help homeowners reduce their carbon emissions, like free smart thermostats, and rebates for energy efficient windows and insulation."

Asked how Ford would reduce greenhouse gas emissions, the premier-designate reiterated that he would focus on clean air, water and parks, adding: "We're going to make sure we consult with people in that industry." He did not specify what industry he meant.

He also opened the door to regulating gasoline prices, striking a populist chord as he focused on putting money back in the pockets of Ontario families.

"Nothing drives people more crazy than on the weekend, mysteriously, all the prices of gas go up," he said, borrowing a talking point from the NDP campaign trail. "The gas companies – I'm putting you on notice," said Ford, adding that they won't be "playing these games" anymore under his watch. "The party is over," added the businessman and former city councillor. "You think [the gas companies] are going to gouge the taxpayers? It's not going to happen under our watch."

Ford was also asked about his previous promise for his first order of business, firing Hydro One CEO Mayo Schmidt. The premier-designate also promised that would be taken care of. "By the way, the CEO – he's done, he's gone," Ford said near the end of his press conference. Hydro One spokesperson Tiziana Baccega Rosa clarified that no change has occurred just yet. “I can confirm that there’s been no change in leadership at Hydro One,” she told QP Briefing.

-with files from Christopher Reynolds