A recent article in Lexpert Magazine looks at the “historic” Pan-Canadian Framework on Clean Growth and Climate Change, which was created to meet the country’s 2030 emissions reduction targets and announced in December 2016. Author Paul McLaughlin reports that under a primary component of the framework “the provinces and territories would agree to impose a carbon price of, at minimum, $10 a tonne on GHG emissions starting in 2018, which would rise by that same amount each year until it reached $50 a tonne by 2022.”
To gain insight into the framework and the new carbon-pricing landscape across Canada, Paul McLaughlin turns to energy and climate change legal experts, including Osler’s Jacob Sadikman, a partner in the firm’s Commercial Practice Group.
Jacob tells Lexpert that the current cap and trade programs in Ontario and Québec are somewhat of a disappointment. “This is not a new concept. We’ve been chasing the dream of wide-scale GHG emissions trading for well over 20 years at this point,” says Jacob, who Lexpert reports worked in the emissions trading industry in New York City for an over-the-counter U.S. energy commodities brokerage in the late 90s, before attending law school. “To say it has been a little bit disheartening to watch the pace at which this has actually developed and the opportunities coming out of it is a bit of an understatement. This is cap and trade in name only. That’s my cynical perspective.”
Jacob states that there is not, so far, any “genuine secondary market activity for mission allowances in these jurisdictions. What you’re not seeing is an actual vibrant secondary trading of these products where you have energy marketers and trading businesses coming in and making markets in these things.”
However, Jacob says he’s been assisting a number of clients whose commercial contracts in the energy and infrastructure sector have provisions and mechanics relating to carbon pricing or similar environmental attributes. “In many cases, these contracts had anticipated some form of carbon pricing in Ontario, or at the federal level, for many years and there is a fair amount of legal work at present in helping clients sort through the implications of the carbon pricing regime we now have in Ontario for these commercial contracts.”
Read Paul McLaughlin’s full article “Taxing carbon” in Lexpert Magazine’s May 2018 Issue.