Bill 172 - Climate Change Mitigation and Low-carbon Economy Act, 2016

Status: The bill received Royal Assent as of May 18, 2016.

Background: In November 2015, Ontario released a Climate Change Strategy which set out the long-term vision for meeting greenhouse gas pollution reduction targets. That strategy set out mechanisms for controlling pollution, namely carbon pricing (cap and trade), investments in technology, and government commitments. The first item of the government's action plan as included in this Strategy was the introduction of climate change legislation to set out a framework for action. In Bill 172, Ontario made good on that commitment.

Purpose of bill: The province on Ontario recognizes the critical environmental and economic challenge of climate change that is facing the global community and thus, responds with the creation of this Act to create a regulatory scheme:

• To reduce greenhouse gas in order to respond to climate change, to protect the environment and to assist Ontarians to transition to a low-carbon economy; and
• To enable Ontario to collaborate and coordinate its actions with similar actions in other jurisdictions in order to ensure the efficacy of its regulatory scheme in the context of a broader international effort to respond to climate change. 

Impact on Indigenous Communities: First Nation and Métis communities have a special relationship with the environment and are deeply connected spiritually and culturally to the land, water, air and animals. They may offer their traditional ecological knowledge as the Government of Ontario develops specific actions. The bill ensures protection of existing aboriginal and treaty rights as recognized in Section 35, Constitution Act, 1982.

The central mechanism to control greenhouse gas emissions is a price on carbon, popularly referred to as cap and trade. Polluters are given a quota of greenhouse gas emissions - if they go over that quotient they must purchase extra tonnage of emissions at quarterly auctions. Conversely, if they pollute below their quota, they can sell their surplus allocation. Therefore, if you pollute more, it will hit your pocketbook and motivate cleaner energy use.

The province has engaged with First Nations to hear their concerns. Between 2015-2017, MOECC has funded 18 engagement and information sessions with First Nation communities and organizations regarding Ontario’s Climate Change Strategy and Action Plan, the Cap and Trade Program, as well as climate change adaptation. In these engagement sessions, a number of themes continued to come up. They include:

• First Nation communities have contributed the least to climate change, yet are most affected.
• First Nation communities require ongoing engagement to create greater awareness.
• Collaboration efforts need to be tailored to reflect region-specific climate change impacts.
• Concern about higher costs of living as a result of cap and trade.
• Capacity and resources are essential to combat climate change through mitigation and adaptation, and to prepare for possible economic opportunities resulting from cap and trade.
• Need for consistent and meaningful youth engagement, including learning from Elders to understand and apply traditional knowledge to address climate change.

Ontario is working with these impacted First Nations to mitigate the impact cap and trade has on their communities, mostly at the regional level.

There is a fund of $85-$96 million (funding levels depend on carbon auctions) available through the proceeds of carbon sales that will go to collaboration with First Nations. This is in addition to other programs in the strategy, and for which First Nations are eligible. Some of the projects that this fund will enable include developing non-fossil fuel energy use, connecting First Nations to the electricity grid, and developing projects that reduce the need for diesel (such as potential microgrids). This funding is above and beyond other programs contained within the Climate Change Action Plan.

Current Status

Chiefs of Ontario has been working with the province through MOECC to address some of the challenges that face First Nations thanks to cap and trade, specifically working to determine a way that diesel dependent communities are not crippled by the cost of carbon. Ontario First Nation Technical Services Corporation (ONTSC) is holding monthly teleconferences to determine a path forward on cap and trade. This issue was also brought  up in the August 1^st meeting with the premier.

COO is working in a coordinating capacity to make sure that First Nations are consulted in cap and trade, particularly when it comes to offset sales. COO is also advocating that MIRR take a more active role in these discussions so that First Nation interests are heard within Ontario.

The transfer payment agreement that facilitated these discussions were received six months late, which has pushed back the progress on this file. However, it is important that action on climate change, particularly for First Nations who are uniquely impacted by climate change, is taken before the end of this government’s mandate.

Full text of the reading can be found here.

Full text of an article from Ontario's Newsroom can be found here.

Full text of the Climate Change Strategy can be found here.