How Will the Cap and Trade Program Impact Rural Ontario?


Ontario’s cap and trade program is expected to raise about $1.9 billion annually.

The Liberal government says it will spend the proceeds on initiatives to cut greenhouse gas emissions – everything from investments in public transit and clean technology to making homes and businesses more energy efficient.

Program details are still scant, but many rural stakeholders are wondering how much of that money will be invested in their communities. “If it’s wisely invested in greenhouse gas reduction, rural stakeholders can benefit,” says Norman Ragetlie, director of policy and stakeholder engagement for the Rural Ontario Institute.

Norman Ragatlie, Rural Ontario Institute
Rural Ontario Institute’s Norman Ragetlie says municipal leaders have to ensure that the flow of investment from Ontario’s cap and trade program comes back to rural Ontario.

Earlier this week, Ragetlie told the annual meeting of the Association of Municipalities of Ontario (AMO) that climate change presents both opportunities and challenges for rural Ontario. The challenges – specifically, extreme weather and its potential impacts on primary farm production and rural communities and their economies – are more obvious.

When it comes to opportunities, pundits typically point to things like farmland carbon sequestration, extended northern growing seasons and the potential for northern areas of the province to benefit from cap and trade through potential carbon offsets from managed forests. For the immediate future, however, the greatest opportunity is simply getting cap and trade, and its related programs, right, Ragetlie tells Real Agriculture in this interview.

“We want to see investment in rural Ontario and not just in urban public transit,” says Ragetlie. He believes now is the time for rural municipal stakeholders to get engaged and ensure Ontario government climate change policies reflect the potential impact on rural Ontario.

For example, gas prices in Ontario will rise about 4.3 cents a litre under the Liberal government’s cap and trade plan. “The reality is that for most forms of energy, rural household expenditures are considerably higher on electricity and home heating and transport fuels,” explains Ragetlie. He notes that rural Ontario households spend 20% more on electricity and 13% more on transportation fuel, while typically earning 15% less than urban dwellers.

“With that in mind, we really need to look at programs that address this.” Ragetlie says municipal leaders have to ensure that the flow of investment from the cap and trade program comes back to rural Ontario. That means home energy efficiency and retrofit programs should really be targeted to rural communities, which are impacted the most.

Ragetlie notes that the Ontario government can just look south of the border to find equitable and effective program ideas. “In California, where they are years ahead of us in terms of investing cap and trade revenue, they have an impacted community program, which says that 25% of cap and trade revenue has to be directed to impacted communities – we could do the same thing here.”

Right now, the potential impact of climate change is really unknown, but “rural stakeholders really have to be watching to make sure that the program design benefits them,” says Ragetlie.

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