Province Unveils Made-in-Ontario Environment Plan

Ontario’s Ministry of the Environment, Conservation and Parks (MECP) released Preserving and Protecting our Environment for Future Generations: A Made-in-Ontario Environment Plan (Plan) on November 29.¹ The Plan had been widely anticipated given the provincial government’s shift away from its predecessors’ climate change and energy policies. The Plan comprises four main components: addressing climate change; protecting Ontario’s air and water; reducing waste and litter; and conserving land and greenspace.

What You Need To Know

• The Plan aligns Ontario’s greenhouse gas (GHG) emissions reduction target with Canada’s target under the Paris Agreement of 30% below 2005 levels by 2030. To achieve this target, the Plan relies in large part on historical emissions reductions due to closures of coal power plants prior to 2015.
• To achieve the remaining emissions reductions, the Plan rejects a cap-and-trade program or carbon tax for Ontario. Instead, it sets out various other policy initiatives, including:
  • implementation of industrial emission performance standards, which would be tied to facility output or production and, similar to Saskatchewan’s output-based performance standards, would likely apply to large industrial emitters producing more than 25,000 tonnes of GHG emissions per year; and
  • the creation of the Ontario Carbon Trust and Reverse Auction (with $400 million in initial public funding) to leverage private capital for cost-effective clean technology solutions and facilitate low cost emissions reduction projects.
• Many of the actions are only described at a high level, leaving important details to be disclosed and potentially, to be determined in the future. The MECP expects to finalize the actions identified in the Plan based on public feedback. The comment period on the Plan is open till January 28, 2019.

Highlights of the Climate Change Action Plan

Addressing Climate Change

The Plan recognizes the growing impact and cost of climate change, but emphasizes the need for a balanced approach in light of the “heavy lifting” by Ontarians to date. The Plan aligns Ontario’s GHG reduction target with Canada’s target under the Paris Agreement of 30% below 2005 levels by 2030, relying in large part on the province’s historical reductions due to closures of coal power plants in meeting that target. In comparison, Ontario’s 2016 Climate Change Action Plan included emissions reduction targets, relative to 1990 levels, of 15% in 2020, 37% in 2030, and 80% in 2050.

The Plan indicates that Ontario has already achieved a 22% emissions reduction relative to 2005, and anticipates further reductions over the next 12 years from a range of sources, including higher uptake of clean fuels (19% of total estimated reductions by 2030), natural gas conservation (18%), low carbon vehicles (16%), performance standards for large emitters (15%), innovation in energy storage and fuel switching (15%), federal clean fuel standard (7%), investments in transit and waste diversion (6%), and investment in an Ontario Carbon Trust (4%). The proposed industry performance standards and Carbon Trust are further discussed below.

• Emission performance standards for large industrial emitters would be tied to their level of output or production (in contrast with a cap on province-wide emissions, which was a feature of the former cap-and-trade program). The Plan provides few details on how these standards will take shape, but cites as an example Saskatchewan’s plan to implement an output-based performance standards (OPBS) system in 2019. That system will apply to facilities in regulated sectors emitting more than 25,000 tonnes of GHG per year, excluding Saskatchewan’s upstream oil and gas and electricity industries. Emitters that do not meet their OPBS would have the option of (i) reducing their emissions intensity; (ii) procuring offset credits (i.e., credits issued to voluntary emissions reduction projects that follow prescribed protocols); (iii) acquiring performance credits from regulated facilities whose emissions intensity is lower than the OBPS; (iv) engaging in the market mechanisms under the Paris Agreement; and/or (v) paying into a provincial technology fund.
• The Ontario Carbon Trust would be launched, with an initial public funding of $350 million, to identify cost-effective clean technology solutions and unlock over $1 billion of private capital for commercially viable projects. The Plan contemplates an additional $420 million increase to the Ontario Carbon Trust through the federal Low Carbon Economy Leadership Fund, if the federal government’s Pan-Canadian Framework agreement with Ontario is revived. In addition, an Ontario Reverse Auction ($50 million) would allow bidders to submit proposals for emissions reduction projects and complete for contracts based on the lowest-cost per tonne of reduction.

Other proposed climate change mitigation actions include: developing a Climate Change Governance Framework to make climate change a government-wide priority; undertaking a risk-based provincial impact assessment; raising public awareness (e.g., education for homeowners about flood risk and prevention); updating the Building Code and consulting on tax policy options to support adaptation to extreme weather; and building resilience in critical infrastructure and disaster recovery.

Protecting Ontario’s Air, Lakes and Rivers

The Plan includes various high-level proposals to address air and surface water quality. Regarding air quality, the Plan proposes to redesign emissions testing requirements for heavy-duty vehicles, increase traffic pollution monitoring, and address pollution that comes from outside Ontario. Regarding surface water, the Plan proposes to restore and protect the Great Lakes, protect vulnerable waterways (e.g., remediation of mercury contamination in the St. Clair and English-Wabigoon Rivers), enhance water taking policies and conservation practices, and improve municipal wastewater and stormwater management (e.g., real-time monitoring of sewage overflows).

Reducing Litter and Waste

The Plan proposes various actions to reduce litter and waste, including steps to: (1) minimize and divert organic waste by expanding collection systems and creating a proposal to ban food waste from landfills; (2) reduce plastic waste by pursuing an inter-jurisdictional plastics strategy as well as national recycling standards; (3) reduce litter through strong action against illegal dumping and support for clean-up initiatives (e.g., an official day for litter clean-up in Ontario); (4) make producers responsible for end of life management of products and packaging; and (5) modernize environmental approvals to support competitive and sustainable end markets for waste.

Regarding soil management, the Plan points to actions such as revising brownfields regulations and record of site condition guide to increase the redevelopment of contaminated lands, and setting clear rules regarding the reuse of excess soil.

Conserving Land and Greenspace

Proposed actions for land and greenspace conservation include: streamlining Ontario’s environmental assessment process, updating MECP guideline to avoid the impacts of conflicting land uses, the implementation of the provincial Grassland Stewardship Initiative, ongoing development of Community Wildfire Protection Plans, promoting parks and recreational opportunities, fostering sustainable forest management and increasing the use of Ontario timber in construction, and preventing the impact of invasive species.

Next Steps

Public comments on the Plan can be submitted till January 28, 2019.² The province is planning to establish an advisory panel on climate change and begin implementing priority initiatives identified under the Plan. Key indicators of progress would be developed to support regular reporting on Plan implementation.

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¹ See https://news.ontario.ca/ene/en/2018/11/ontario-releases-plan-to-protect-the-environment.html.

² See https://ero.ontario.ca/notice/013-4208?_ga=2.29590905.792706241.1543517705-176476626.1539629885.