Summary: Ontario Bill 172

Executive Summary: Ontario Bill 172;  An Act respecting greenhouse gas; May 18, 2016 Ontario Ministry of the Environment and Climate Change

Because “most of observed increase in global average temperature is due to human activity” and “a 2°C increase will cause irreversible environment damage,” the provincial government is taking action to limit the increase to 1.5°C above pre-industrial temperatures.

To reduce greenhouse gases a regulated market-based cap and trade program  (CTP) will be established to set a price for carbon, change behaviors and spur innovation.

Gases include: Carbon Dioxide, Methane, Nitrous Oxide, Hydrofluourcarbons, Perfluorocarbons, Sulfer Hexafluoride, Nitrogen Trifluoride.

Market participants (mandatory & voluntary) will be required to register Greenhouse Gas Reduction Accounts for their organization(s) to make transactions.

An Action Plan shall establish the timeline and the cost per ton of the potential reduction in greenhouse gas emission. Owners / operators of facilities will be required to quantify the amount of greenhouse gasses emitted during a prescribed period of time and maintain records to meet regulatory requirements.

The person registered (CTP) shall submit emission allowances and credits to the Ministry in an amount equal to all greenhouse gas emissions attributed to the person before compliance deadline. Allowances may include associated third party activities.

Consequences for Non-Compliance include removal of emission allowances and credits held in participant’s account to satisfy the shortfall and participant will then be required to submit emission allowances equal to three times the shortfall.

Corporate penalties for initial non-compliance include a $ 50,000 per day fine that escalates to $100,000 for subsequent convictions, imprisonment for one year, or both.

Individual penalties include a $ 5,000 per day fine (up to $4M) that escalates to $10,000 per day (up to $6MM) for subsequent convictions, imprisonment for five years, or both.

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