Guideline for the Implementation of Administrative Penalties under the Climate Change Mitigation and Low-carbon Economy Act, 2016

• EBR Registry Number:   013-1818
• Ministry: Ministry of the Environment and Climate Change
• Date Proposal loaded to the Registry: January 02, 2018

Summary:

We are proposing a draft guideline which we can use to calculate administrative penalties to those who do not comply with the Climate Change Mitigation and Low-carbon Economy Act, 2016 (“CCMLEA”) and its regulations. This will help ensure that the penalties are transparent and appropriate.

Description of Policy:

On September 22, 2017, the Ministry of the Environment and Climate Change posted a regulatory proposal notice on the Environmental Registry that included a number of regulatory changes to the cap and trade program; including, a proposal for the implementation of a new administrative penalties regulation under the Climate Change Mitigation and Low-carbon Economy Act , 2016 (CCMLEA). 

As part of this regulatory proposal notice, the Ministry stated its intent to develop, and post for public comment, guidance material to be used by the Ministry when applying and calculating administrative penalties. This proposal notice fulfils the Ministry's commitment to provide the draft guidance document for public comment in order to help ensure transparent and appropriate application of administrative penalties under the cap and trade program. 

In April 2015, the government announced it would be limiting greenhouse gas pollution by implementing a cap and trade program and its intent to link Ontario’s program with those of Quebec and California.

On May 18, 2016, the CCMLEA received Royal Assent.

On May 19, 2016, two regulations that form the backbone of the cap and trade program became law under the Climate Change Mitigation and Low-carbon Economy Act, 2016 – the Cap and Trade Program Regulation (O. Reg. 144/16) which took effect July 1, 2016 and the Quantification, Reporting and Verification of Greenhouse Gas Emissions Regulation (O. Reg. 143/16) which took effect January 1, 2017. 

Ontario’s cap and trade program came into effect on July 1, 2016, with the first compliance period beginning on January 1, 2017.

On September 22, 2017 Ontario signed an agreement to integrate and harmonize cap and trade programs, effective January 1, 2018. Regulatory amendments were filed to allow for linking on November 24, 2017 and this will allow all three governments to hold joint auctions of greenhouse gas emission allowances.

Purpose of Policy:

An administrative penalty is a monetary penalty that may be imposed by the Ministry to achieve the following purposes:

1. To ensure compliance with the CCMELA and its regulations; and,
2. To prevent a person or entity from deriving economic benefit from non-compliance with the requirements in the CCMLEA and its regulations.

As part of implementing administrative penalties for the cap and trade program, the Ministry is proposing a draft guideline that would guide Directors when calculating and issuing administrative penalties. 

The proposed guideline includes information on the application of administrative penalties, such as:

1. A step-by-step process for issuing administrative penalties
2. Considerations taken by the director when determining a base penalty value
3. How economic benefit will be considered
4. Process for making requests to the director to consider additional information regarding the contravention

The cap and trade program creates a multi-billion dollar market for emission allowances and credits. As such, it is important that the Ministry have a comprehensive suite of enforcement options to help maintain the integrity of the market and the program itself.

Implementation of administrative penalties will form part of the ministry’s suite of graduated compliance and enforcement tools under the CCMLEA – providing the ministry with the ability to choose the most appropriate and effective compliance tool, or combination of tools, to maximize compliance and prevent or deter future non-compliance.

Public Consultation:

This proposal has been posted for a 45 day public review and comment period starting January 02, 2018. If you have any questions, or would like to submit your comments, please do so by February 16, 2018 to the individual listed under "Contact". Additionally, you may submit your comments on-line.

All comments received prior to February 16, 2018 will be considered as part of the decision-making process by the Ministry if they are submitted in writing or electronically using the form provided in this notice and reference EBR Registry number 013-1818.

Please Note: All comments and submissions received will become part of the public record. Comments received as part of the public participation process for this proposal will be considered by the decision maker for this proposal.

Your personal information may be used in the decision making process on this proposal and it may be used to contact you if clarification of your comment is required. It may be shared (along with your comment) with other Ontario Ministries for use in the decision making process. Questions about this collection should be directed to the contact mentioned on the Proposal Notice page.