Premier Rob Ford has now made good on his pledge to kill the Wynne Government’s Cap and Trade carbon plan. When he announced his intention during the election campaign, many observers wondered how he would replace the $2 Billion that the plan was bring into the provincial coffers. It may turn out that the answer is Justin Trudeau. Trudeau has promised to introduce a federal carbon tax in any province that does not have its own scheme. Further Trudeau has pledged that any revenue from the federal tax will go back to the province where the income was generated. The difference for Ford is that now the blame for what will likely be a reversal of his plan to reduce the price of gasoline will shift to the Feds, not Ford. The opportunity for Ford is to negotiate flexibility in how the money is to be spent rather than engage in a protracted lawsuit with the Feds as he has threatened. Further, the federal plan suggests a carbon tax of between $20 and $50 a ton. The higher the tax the more revenue that will be raised. The Wynne plan was generating $2 Billion per year based on a per-ton price of $18-$20. If the feds were to set the carbon tax at, say $30 per tonne, Ontario would be in for roughly $3 Billion in funding. Hopefully some of that would still be used to promote energy reduction.
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