Ontario, Quebec and Manitoba Agree to Link Cap & Trade Systems

On December 7, 2015, Ontario, Quebec and Manitoba signed a memorandum of understanding at the Paris climate talks to formalize the intent of all three provinces to link their cap and trade systems. Under the Western Climate Initiative, the three provinces’ cap-and-trade systems would then link to California’s cap and trade program.
Quebec’s cap and trade system has operating since 2013 and is already linked with California’s cap and trade program. Ontario is in the process of finalizing the details of its cap and trade program, which is expected to come online in 2017. When it released province’s new climate change strategy on December 3, 2015 – Climate Change and Green Economy Action Plan – Manitoba confirmed its intent to introduce a cap and trade program for 20 large emitters. Speaking in Paris, Manitoba Premier Greg Selinger said he believes more states and sub-national governments can be convinced to join them in linking cap and trade system, who can learn from each other’s experiences.

 

Québec introduces amendments to draft GHG Regulations

 
To help Québec meet its emission reduction targets, the province introduced amendments to two draft GHG regulations in the June 8, 2012 edition of the Québec Official Gazette: (i) Regulation respecting mandatory reporting of certain emissions of contaminants into the atmosphere, and (ii) Regulation respecting a cap-and-trade system for greenhouse gas emission allowances.

Amendments to the Regulation respecting a cap-and-trade system for greenhouse gas emission allowances are intended to link the Quebec system with the California system as well as those of future partners such as Ontario and British Columbia. To this end, it specifies system registration admissibility conditions and necessary documents, as well as the procedure regulating emission rights trading and auctions, and provides the conditions for the delivery of offset credits, including protocols regarding certain admissible projects. Finally, amendments were made to adjust the regulation further to the adoption of Bill 89, An Act to amend the Environment Quality Act in order to reinforce compliance, by providing for administrative penalties and stronger sanctions.

The Regulation respecting mandatory reporting of certain emissions of contaminants into the atmosphere was also amended in order to complete the necessary harmonization with Western Climate Initiative (WCI) rules by adding declaration protocols. It provides, among other things, that the obligation to audit GHG emission declarations only applies to emitters subject to the GHG cap-and-trade system. In Québec, 2012 is a transition year during which regulated entities will have an opportunity to become familiar with the cap-and-trade system. The first carbon market compliance period will begin on January 1, 2013.