What Is Cap and Trade?
Cap and Trade is a market-based system for managing and reducing industrial greenhouse gas (GHG) emissions.

In a cap-and-trade system, government gives corporations “allowances” which limit the amount of greenhouse gases they can emit. Companies that reduce their emissions below their limit have “surplus” allowances they can sell or bank for future use.

What Is Ontario Doing?
Cap and Trade is the GHG emissions reduction model emerging from North America and other countries. Since Ontario’s economy is heavily integrated with that of the U.S., a consistent approach is vital if we are to ensure a level playing field for Ontario’s industries and its competitors.

That’s why Ontario is working with other North American jurisdictions to develop a common trading system. One organization, the Western Climate Initiative (WCI), involves seven states and Quebec, British Columbia and Manitoba in addition to Ontario.

At the same time, Ontario is seeking input from stakeholders to build a provincial cap-and-trade framework that would align with the WCI program and other trading systems. We want a progressive yet flexible Ontario cap-and-trade system that would meet both our environment and economic objectives.

On May 27, 2009, the province introduced legislation that, if passed, would create the government authority to set up a greenhouse gas emissions trading system within Ontario.

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