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The Canadian Taxpayers Federation (CTF) has warned that Ontario's cap-and-trade carbon pricing system, which entered into force on January 1, will increase costs for households.
CTF Ontario Director Christine Van Geyn said: "Today life got more expensive for everyone in Ontario. There's no question businesses will pass down their new higher costs to consumers. Keeping your family warm this winter just got more expensive, and so did your commute to work, and your electricity. These aren't luxuries that the Government is now taxing – they're the necessities of life."
The cap limits how many tonnes of greenhouse gas pollution businesses and institutions can emit. It will drop each year to encourage lower emissions. Companies must have enough allowances (also known as permits or credits) to cover their emissions if they exceed the cap. Companies can trade allowances to help them comply or to sell surplus credits.
Facilities and natural gas distributors with emissions of 25,000 tonnes or more of greenhouse gas emissions a year are required by law to participate in the program. The system is also mandatory for fuel suppliers that sell more than 200 liters of fuel a year and electricity importers.
The first auction of allowances will be held in March 2017.
The Government expects the program to generate around CAD1.9bn a year. The money raised will be invested in projects that reduce greenhouse gas pollution.
Van Geyn said that the system will tax "our heat, our commutes, our electricity that many of us are already struggling to afford," and argued that "none of this makes sense."
She added that it is not too late for the Government to reverse course "before the real damage begins."
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