Blog: $900 Million from Ontario’s Cap and Trade Program to Help with Energy Retrofits and Energy Efficiency


While Ontario will not begin auctioning greenhouse gas allowances under the new Cap and Trade program until 2017, the Province has committed close to $1 billion of the possible proceeds under the program to redress the burden borne by low-income households and vulnerable communities in mitigating climate change.

On May 25, Ontario announced funding of $900 million over four years for social housing energy retrofits and the improvement of energy efficiency in private residential apartments. The announcement follows an earlier commitment of $92 million made on February 12. [1]  The initial $92 million will be sourced from the Green Investment Fund, [2] while the additional $900 million will come from proceeds of the Cap and Trade program Greenhouse Gas Reduction Account.The increased funding came on the heels of the Climate Change and Low-Carbon Economy Act, 2016 (Climate Change Act) receiving Royal Assent on May 19. [3]

The $92 million commitment came prior to Bill-172 being scrutinised, amended, and enacted as the Climate Change Act. The amendments introduced requirements to consider the impact the regulatory regime would have on low-income households and vulnerable communities, especially with respect to the Climate Change Action Plan and funding initiatives to reduce greenhouse gas emissions. The amendments also mandate a public report on how well initiatives that are funded fit with the requirement to consider the interests of low-income households and vulnerable communities. The submissions and debates that led to the introduction of new provisions under the Climate Change Act illustrated that the support provided by the initial $92 million, though welcome, would be inadequate to address the impact of the cap and trade program on low-income households and vulnerable communities.

Without the amendments to Bill 172, the Climate Change Act would have contained provisions ameliorating the concerns of trade-exposed industries [4]  but remained silent on low-income households and vulnerable communities. The amendments that oriented the Climate Change Act towards the interests of low-income households and vulnerable communities were introduced, in no small part, because of the advocacy of organizations such as the members of the Low-income Energy Network (LIEN) including the Canadian Environmental Law Association (CELA) and the Income Security Advocacy Centre (ISAC), the members of the Clean Economy Alliance (CEA), the Registered Nurses’ Association of Ontario (RNAO), the Housing Services Corporation, and a number of other public interest organisations.

Of the $900 million, $500 million is earmarked for the retrofit of social housing apartments with energy efficiency and renewable energy technologies and up to $400 million will be held as part of an incentive program that will offer rebates or grants for the utilisation of energy-efficient technologies in multi-residential rental buildings. The province has also promised to look into making it illegal to pass these costs onto tenants. Even though Bill 172 did not specify a minimum percentage of the Greenhouse Gas Reduction Account to be directed to low-income Ontarians, LIEN is encouraged by the steps that have been taken to date to assuage the disproportionate impact of carbon pricing on low-income households and vulnerable communities during Ontario’s transition to a carbon free economy. This policy alone, however, will not be enough to effectively mitigate the impact of cap and trade on all low-income households and vulnerable communities, other policies and commitments will be needed. It is imperative that the Province continue to ensure that the most vulnerable members of our society are treated equitably when policies of significant impact are being formulated and implemented.

LIEN looks forward to working with the provincial government as the Climate Change Action Plan is implemented and the Minister makes recommendations to the treasury board for the expenditure of the Greenhouse Gas Reduction Account under the Climate Change Act.

A few submissions on Bill-172 can be found here: CELA #1 #2ISACCEARNAO


[1] The initial investment of $92 million is hoped will help lower GHG emissions by about 3,600 tonnes over a 20-year period and create approximately 1,650 jobs. The first $82 million will go toward energy retrofits for high-rise social housing towers of 150 units or more. At an estimated average cost of $3.5 – $5.5 million for each high-rise, the funding would help between 16 and 23 buildings. The final $10 million will go towards improving electricity efficiency in approximately 1,300 single social housing homes often found in smaller communities.

[2] A $325 million down payment on the newly passed Cap and Trade program.

[3] The impression of a number organisations on the initial allocation of $92 million For energy retrofits can be found here.

[4] Industries that generate significant greenhouse gas emissions whose competitors may face lower costs in jurisdictions that do not have carbon pricing.