Cap-and-trade won't hurt Essar, MPP says

A key part of the Ontario budget, unveiled Thursday, is the announcement that income from the Wynne government's cap-and-trade plan to battle climate change is projected to be $1.9 billion in 2017.

The cap-and-trade plan, which officially goes into effect January 1, 2017,  puts a cap on carbon emissions.

Worried Saultites have wondered what cap-and-trade will cost Essar Steel Algoma as the steel plant goes through one of the roughest periods in its history.

"There's absolutely no impact to cap-and-trade related to Essar Steel for four years," Sault MPP David Orazietti told SooToday Friday.

Essar Steel Algoma has an exemption on the amount of "suspended particulate matter" it puts into the air (such as smoke, dust and ash) until December 31, 2020.

The government calls it "transitional assistance."

The same goes for other companies such as U.S. Steel (Hamilton and Nanticoke), and ArcelorMittalDofasco (Hamilton).

Some companies can apply for exemptions for up to 10 years.

Essar Steel Algoma officials were not available for comment.

Cap-and-trade will, however, hit consumers.

The government has said it will cost $5 more a month in higher home heating costs and $8 more a month in higher gasoline costs.

"I understand (that has some people upset)," Orazietti said.

Certain budget items, however, shouldn't be looked at in isolation, Orazietti said.

"You've got to look at all the elements of the budget, you have to consider what there is for healthcare, free tuition for students with family incomes under $50,000, increased funding for families with children with autism, or money for shingles vaccines, so there are other things in the budget that offset other costs."

"I understand there are impacts around climate change that we would all prefer not to pay for."

The $1.9 billion in income from cap-and-trade will go back into climate change measures, the government has said.

The Sault Ste. Marie Chamber of Commerce, in a news release issued Friday, writes "we’re encouraged by the government’s commitment to ensure the proceeds from the new cap and trade system are not subsumed under general revenues. As this policy is implemented, government must ensure that small and medium-sized businesses are not adversely effected.”

Meanwhile, Ontario’s deficit has dropped to $5.7 billion for 2015-2016.

The deficit for 2016-2017 is projected at $4.3 billion.

The government has said it is committed to wiping the deficit out in 2017-2018, though Ontario will still be left with a staggering debt.

That debt will be $325 billion by 2018.