Ontario Continues Carbon Tax Attack, Undercuts Investor Confidence with Wind Farm Cancellation
Doug Ford’s Progressive Conservatives are digging themselves deeper in their continuing effort to undo the previous provincial government’s climate and energy strategy, launching a likely futile court action against the federal price on carbon while incurring business wrath for cancelling a wind farm that was just three weeks away from completing construction.
Last week, Attorney General Caroline Mulroney and Environment Minister Rod Phillips announced a court challenge against what they characterized as Ottawa’s “job-killing carbon tax”. Though constitutional experts say the move is likely doomed, National Observer reports, Mulroney said the province had set aside up to C$30 million to fight the case.
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“The federal carbon tax will have its day in court. But it’s already on trial among the families who will be forced to pay more for gas, home heating, and everything else if the federal government gets its way,” she told media.
Provincial opposition parties criticized the announcement, with NDP energy critic Peter Tabuns charging that “this government has no hesitation messing with an election happening in the city of Toronto, and then saying the federal government doesn’t have the right to use the constitutional rights it has.” Green Party leader Mike Schreiner added that “this government is more interested in spending money on lawyers than they are in repairing schools, helping hospitals, lowering their utility bills, or helping people save money by saving energy.”
A Globe and Mail editorial notes that the announcement duplicated the decision the Ford government had already made to join Saskatchewan’s court challenge against the federal carbon price.
“There is no useful reason to open a second front, in a second provincial court of appeal,” the paper states. “Well, no reason other than feeding red meat to PC partisans who love seeing the populist Ford government give the business to Toronto, to people on welfare, and to the Trudeau government. We’d suggest Ms. Mulroney go get the $30 million budgeted for her court case and light her own bonfire with it, but she has already contributed enough to the province’s greenhouse gas emissions.”
Meanwhile, Ontario Financial Accountability Officer Peter Weltman said his office was reviewing the cost of Ford’s decision to cancel the province’s carbon cap-and-trade program, at the request of NDP opposition leader Andrea Horwath. At this point, Weltman said he’s still waiting for more information on which to make his assessment.
“There will be no more auctions so there’ll be no more revenue,” he said. “On the spending side, how many of those spending programs have stopped or will stop or might stop? We need to get more detail on that before we can put together a fulsome analysis.”
Just days before that statement, a comprehensive report by the Stanford Energy Modelling Forum concluded that a carbon tax is an efficient way to cut carbon pollution without slowing down an economy. Across 11 scenario groups involved in the study, “every single team found the same result: not only does a carbon tax lead to substantially fewer emissions, it also could have long-term positive economic growth,” Global News reported.
“At a broad level, the results are very unsurprising to me,” said Ecofiscal Commission Executive Director Dale Beugin. “The consensus is that the carbon tax is going to have a small economic impact, whether positive or negative.”
“Carbon taxes won’t hamper the economy,” The Guardian headlined, in its report on the same study. “But global warming will.”
Meanwhile, the Ford government took friendly fire from some unexpected sources, with the Business Council of Canada and the National Post both concluding that its decision to cancel the White Pines wind farm in Prince Edward County contradicted his promise that Ontario is open for business.
“The White Pines Wind Project Termination Act sends a different and much less welcoming message. I urge you to reconsider,” wrote Business Council CEO and former federal finance minister John Manley, in the days before the bill was adopted. “We believe this legislation, if enacted, will undermine investor confidence and set an unfortunate precedent for how the government intends to deal with the private sector.”
“You cannot summarily close down a company that has sunk $100 million into a project, after following all the rules, and then say it has no right to seek compensation in the courts (the legislation gives the government full power to limit compensation through regulation),” added Post columnist John Ivison. “Or at least you can’t say all those things and say you are ‘open for business.’”
On Corporate Knights, freelance energy specialist James Munson reports the reverberations from Ontario’s decision on White Pines are already being felt in Europe. “Recent concerns on foreign investment and the rule of law in Canada have focused on British Columbia’s attempts to stop Kinder Morgan’s expansion of the Trans Mountain crude pipeline, which is being developed in that province and Alberta,” Munson writes. “But the new Progressive Conservative government in Ontario, which is seeking to dismantle its predecessor’s environment and energy policies, is raising new concerns about investment safety.”
“I’m definitely hearing a lot of questions and concerns from the German government,” said German Ambassador Sabine Sparwasser. “This is a case of how safe is our investment, how good is it to invest in Ontario and Canada, because we do want to have bilateral investment.”
Sparwasser told Munson there are “800 German companies in Canada and more [that] are hungry to invest”. But “when you have all the necessary permits, to be asked to immediately stop the project and take it down, with no clarity on what the indemnification process would be, is unsettling,” she cautioned. “It is unusual to have such a drastic measure when all the necessary permits of a project are present.”
Which explains why the White Pines project “has by now attracted the attention of the EU and European companies who want to invest in Ontario and in Canada.”
Meanwhile, the new government’s attack on one of the province’s most affordable electricity options didn’t stop Energy Minister Greg Rickford from affirming his enduring support for the most expensive and dangerous one, or the Ontario Chamber of Commerce from piling on.
“Bruce Power is an important producer of energy for our sector here in Ontario,” Rickford said in the legislature. “Our government will always support the work of private organizations…that are working to create good jobs, high tech jobs,” while “providing safe and secure access to energy.” A Chamber of Commerce blueprint called on the Ford government to leverage Ontario’s nuclear sector, “which gives the province key advantages because of the low cost and high reliability of the electricity source that powers 60% of the province.”