Federal government accepts Ontario's emissions program, with commitment to Paris Agreement

Updated: Nov 26, 2020

Yesterday, Ontario's Minister of the Environment, Conservation and Parks Jeff Yurek made the following statement regarding the future of Ontario's Emissions Performance Standards (EPS) program:

"After over a year of discussions, we are very pleased that the federal government has accepted our made-in-Ontario Emissions Performance Standards (EPS) program as an alternative to the federal output-based pricing system. Our program regulates greenhouse gas emissions from large industrial facilities, setting the standards for lowering emissions that facilities are required to meet. If an industry does not meet the standard, it will have to pay."

The EPS program is one of Ontario's Environment Plan commitments. It is a crucial program in making polluters accountable for their greenhouse gas emissions with a rigid but fair, cost-effective and flexible system to suit the province's needs and circumstances.

This program rewards innovation amongst industrial facilities in Ontario and punishes bad behavior. The more emissions the facility can reduce, the less they have to pay for their pollution. Facilities can get credits for any reductions that surpass the standard, which they can then sell or trade to other emitters in the program.

Ontario's approach does not enforce a blanket cap on emissions across Ontario and considers specific industry and facility conditions while allowing for economic growth. These regulations include a tailored approach appropriate to the particular regulated industry.

"This program is our alternative to the federally imposed output-based pricing system," says Minister Yurek. "It is a more tailored program for Ontario's environment and economy because it helps us achieve emission reductions from big polluters and achieve our share of Canada's 2030 emissions reduction target without driving away business and job creators."

Unlike the federal government's output-based pricing system, the EPS program phases-in stringency over time - saving Ontario industries the initial shock present in the federal plan and giving industry more time to meet its obligations. Ontario's regulation covers the very same polluters as the federal system - there are no free passes, and no one is off the hook.

Minister Yurek states that he firmly believes this is a better program for Ontario's environment and economy than the federal counterpart. It strikes a balance between the province's plan to fight climate change with economic growth.

Despite economies in Ontario and across Canada struggling due to impacts of COVID-19, the province remains committed to meeting their 2030 greenhouse gas reduction targets under the Paris agreement. Having an EPS program in place in this province will give "regulatory certainty and minimize costs for industry during this time of unprecedented challenge."

Minister Yurek concluded: "We will immediately get to work with the federal government to ensure a smooth transition for industry and ensure a clear understanding of compliance requirements. With the help of our partners in industry and the federal government, I am confident that our made-in-Ontario plan is the best plan for our province, with substantial benefits for the health of our people and our economy, for generations to come."
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