Transcript: Costing the Cancellation of Cap and Trade | Oct 19, 2018

Steve sits in the studio. He's slim, clean-shaven, in his fifties, with short curly brown hair. He's wearing a gray suit, white shirt, and spotted purple tie.

A caption on screen reads "Costing the cancellation of cap and trade. @spaikin, @theagenda."

Steve says DOUG FORD'S GOVERNMENT
PROMISED, AND DELIVERED, ON ITS
ELECTION PLEDGE TO CANCEL THE
CAP AND TRADE PROGRAM BROUGHT IN
BY THE PREVIOUS GOVERNMENT.
THIS WEEK, ONTARIO'S FINANCIAL
ACCOUNTABILITY OFFICER ISSUED
HIS REPORT ON WHAT THAT'S GOING
TO MEAN FOR THE PROVINCE'S
COFFERS.
HE IS PETER WELTMAN, AND HE
JOINS US NOW FOR MORE.

Peter is in his fifties, clean-shaven, with short, curly gray hair. He's wearing glasses, a dark gray suit, white shirt, and purple tie.

Steve continues NICE TO HAVE YOU HERE.

Peter says GREAT TO BE HERE.

Steve says HOW LONG HAVE YOU BEEN
ON THE JOB NOW?

Peter says SIX MONTHS.

Steve says YOUR VISIT IS LONG
OVERDUE.

Peter says SETTLED IN.

Steve says I DON'T WANT TO ASSUME
THAT EVERYBODY KNOWS WHAT YOU DO
FOR A LIVING.
CAN YOU START BY TELLING US WHAT
THE FINANCIAL ACCOUNTABILITY
OFFICER'S MISSION IS?

The caption changes to "Peter Weltman. Financial Accountability Officer."
Then, it changes again to "A financial review."

Peter says THE MISSION OF THE FINANCIAL
ACCOUNTABILITY OFFICER IS TO
PROVIDE INDEPENDENT IMPARTIAL
AND AUTHORITATIVE ANALYSIS TO
THE LEGISLATORS, TO THE MEMBERS
OF PROVINCIAL PARLIAMENT, ABOUT
THE GOVERNMENT'S FINANCIAL
SITUATION, COST OF GOVERNMENT
PROGRAMS.
WHEN I SAY FINANCIAL, I MEAN THE
FISCAL SITUATION, SO THE
GOVERNMENT'S BUDGET GOING
FORWARD AND GENERAL TRENDS IN
ONTARIO'S ECONOMY.

Steve says SO IT'S A BIT OF A
TRUTH IN ADVERTISING EXERCISE?

Peter says THAT'S A GREAT WAY TO
DESCRIBE IT, A TRUTH IN
ADVERTISING EXERCISE.

Steve says ANOTHER CLARIFICATION,
YOU DON'T WORK FOR THE
GOVERNMENT.
YOU WORK FOR THE ENTIRE
LEGISLATURE.

Peter says I WORK FOR THE LEGISLATURE,
THAT'S EXACTLY RIGHT.
SO THE LEGISLATIVE BRANCH, THE
BRANCH THAT IS ACCOUNTABLE TO
HOLD THE GOVERNMENT TO ACCOUNT,
ACCOUNTABLE TO THE PEOPLE THAT
VOTED THEM IN.

Steve says THAT'S I THINK AN
IMPORTANT DISTINCTION TO MAKE.
YOU DON'T REPORT TO THE
GOVERNMENT.
YOU REPORT TO EVERYBODY.

Peter says THAT'S RIGHT.
I HAVE 124 BOSSES.

Steve says ALL THE MPPs IN THERE.
AND IN FACT THE REPORT WE ARE
ABOUT TO TALK ABOUT WAS
REQUESTED BY ONE OF THE
OPPOSITION MEMBERS, THE LEADER
OF THE OPPOSITION ANDREA HORWATH
WHO ASKED YOU TO LOOK INTO THIS.

Peter says THAT'S RIGHT.

Steve says ONCE UPON A TIME SHE
SAID, PETER, CAN YOU PLEASE LOOK
AT WHAT THE CANCELLATION OF THE
CAP AND TRADE PROGRAM WILL MEAN
TO THE PROVINCE'S BOTTOM LINE,
AND YOUR PRIME FINDINGS WERE WHAT?

Peter says OUR PRIME FINDINGS WERE
FAIRLY BASIC, THAT BECAUSE OF
THE CANCELLATION OF THE PROGRAM
THE REVENUES OF THE PROGRAM WERE
BRINGING IN HAVE DISAPPEARED,
OBVIOUSLY.
THE EXPENDITURES THAT WERE BEING
FUNDED BY THOSE REVENUES HAVEN'T
ALL DISAPPEARED.
THERE'S STILL 3 BILLION DOLLARS OF THOSE
LEFT.
SO EFFECTIVELY WHAT WE FOUND WAS
IT WAS GOING TO ADD 3 BILLION Dollars
OVER FOUR YEARS TO THE BUDGET
DEFICIT OR THE BUDGET BALANCE OF
THE GOVERNMENT.

Steve says SO PROMISE MADE
PROMISE KEPT TO ELIMINATE CAP
AND TRADE, BUT EXPENSIVE AT THE
END OF THE DAY.

Peter says WELL, WE DON'T... I THINK
LET'S GET BACK TO THE ROLE A
LITTLE BIT HERE.
SO I'M A REFEREE, OKAY?
OUR TEAM IS A REFEREE.
WE CALL THEM AS WE SEE THEM.
WE DON'T MAKE JUDGMENTS.
WE TRY TO KEEP THE ADJECTIVES
OUT OF THE REPORT.
SO WHAT IT IS IS A CANCELLATION
OF A PROGRAM ELIMINATES THE
REVENUES OF THAT PROGRAM AND NOT
ELIMINATES ALL THE EXPENDITURES.
WHETHER IT'S EXPENSIVE OR NOT
EXPENSIVE IS SOMEBODY ELSE TO
DECIDE.

Steve says SO YOU'RE NOT GOING TO
TELL US WHETHER YOU THINK IT'S A
GOOD OR BAD IDEA TO CANCEL CAP
AND TRADE.

Peter says THAT'S WHY WE ELECT MPPs.
THEY MAKE THOSE DECISIONS.

Steve says THEY MAKE THE VALUE
JUDGMENT, AND YOU, HAVING MADE
THAT DECISION, HERE'S WHAT IT'S
GOING TO COST.

Peter says THAT'S RIGHT.

Steve says LET'S PUT THE NUMBERS UP.
SHELDON, BRING UP THE FIRST GRAPH.
HERE IS THE IMPACT ON THE
ONTARIO BUDGET OF ENDING THE CAP
AND TRADE PROGRAM, WHICH I THINK
WAS BRINGING ABOUT 2 BILLION Dollars
ANNUALLY INTO PROVINCIAL
COFFERS, RIGHT?

Peter says THAT'S RIGHT.

A slate appears on screen, with the title "Impact on Ontario budget of ending cap and trade. Estimated."

A bar chart shows the loss of over 700 million dollars a year from 2018 to 2022.

Steve says ALMOST, RIGHT.
AS YOU CAN SEE, THIS IS ALL
OBVIOUSLY RED INK AND IT IS OVER
A FOUR-YEAR PERIOD.
TAKE US THROUGH WHAT THESE
NUMBERS SAY.

Peter says THESE NUMBERS SAY THAT AFTER
ELIMINATING THE REVENUES THERE'S
STILL 481 MILLION DOLLARS OF NET
EXPENSE THAT'S GOING TO HEAD OUT
IN THIS YEAR, 2018-19.
A CHUNK OF THAT IS A WIND-DOWN
PROGRAM.
THERE'S ABOUT 600 MILLION DOLLARS OF
THAT USED TO WIND DOWN SOME OF
THE EXISTING SPENDING PROGRAMS.
THESE ARE PROGRAMS THAT PEOPLE
HAVE APPLIED FOR, GRANTS OR
WHATEVER THE CASE MAY BE, MAYBE
TO BUY AN ELECTRIC VEHICLE, TO
RETROFIT THEIR HOUSE, OR
WHATEVER THE CASE IS, AND THE
GOVERNMENT HASN'T CUT THOSE OFF
IMMEDIATELY.
THEY'VE SAID, OKAY, YOU'VE MADE
YOUR COMMITMENT, YOU CAN FINISH
IT OFF AND WE'LL... THE PROGRAM
WILL LAST AS LONG AS IT TAKES
FOR YOU TO FINISH WHATEVER YOU
STARTED.

Steve says BUT THAT WILL COST
SOMETHING?
THERE'S OBVIOUSLY NO REVENUE
COMING IN TO COVER IT.

Peter says THAT SIMPLE.

Steve says THEREFORE IN THE RED.
IF YOU ADD UP THOSE EXPENDITURES
OVER THE FOUR-YEAR PERIOD, YOU
HAVE ABOUT...

Peter says 3 BILLION DOLLARS.

Steve says ABOUT 3 BILLION DOLLARS.

Peter says THAT'S RIGHT.

Steve says DO YOU KNOW WHY THEY
HAVE DECIDED TO KEEP SOME OF THE
SPENDING GOING DESPITE CUTTING
OFF THE REVENUE CHANNEL?

Peter says I PRESUME THEY FIGURED OUT
THAT THERE WAS SOMETHING THERE
THEY WANTED TO KEEP.
I HAVE NO IDEA, NO WAY OF
KNOWING THAT.

Steve says OKAY.

Peter says YEAH.

Steve says LET US THEN GO TO THE
NEXT GRAPH WHICH IS... THAT'S
WHAT IT MEANS FOR THE BOTTOM
LINE OF THE PROVINCE.

Peter says THAT'S RIGHT.

Steve says HERE'S WHAT IT MEANS
FOR THE BOTTOM LINE OF EACH
HOUSEHOLD, ON AVERAGE, IN THE
PROVINCE, AND AGAIN, A LOT OF BARS HERE.

A new bar chart appears, under the title "Impact on households."

Red bar show the impact of Cap and Trade, while gray bars show the impact of Federal Backstop. Cap and trade increases slowly from 2019 to 2022, whereas Federal Backstop increases sharply.

Steve continues SO WE'RE GOING TO TAKE OUR TIME
AND GO THROUGH THIS SO YOU CAN
EXPLAIN WHAT IT ALL MEANS.
THE RED BARS AND THE DARK BARS
MEAN TWO DIFFERENT THINGS.
TAKE US THROUGH IT.

Peter says OKAY.
SO THIS IS A LITTLE DIFFERENT
THAN THE PREVIOUS GRAPH.
THIS IS THE ASSUMPTION THAT THE
PROGRAM REMAINS IN PLACE.
SO THE RED BARS ARE THE COST,
THE EXTRA COSTS OR INCREMENTAL
COSTS, AS WE LIKE TO SAY IN
FINANCE LAND, ON HOUSEHOLDS, ON
THE AVERAGE HOUSEHOLD, UNDER
EACH OF THE TWO PROGRAMS.

Steve says 264 DOLLARS PER YEAR.

Peter says EXACTLY.

Steve says PER HOUSEHOLD.

Peter says IF CAP AND TRADE REMAINED IN
PLACE, HOUSEHOLDS WOULD EXPECT
TO INCUR IN THIS YEAR 264 EXTRA
DOLLARS, NEXT YEAR 280,
ET CETERA, UP TO 312 DOLLARS IN
EXTRA COSTS THAT WOULD HAVE BEEN
PASSED ALONG TO THEM BY THE
PROVINCE'S CAP AND TRADE PLAN,
EXACTLY.

Steve says SO THE DARK BARS
REFLECT WHAT?

Peter says THE DARK BARS REFLECT THE
FEDERAL GOVERNMENT'S PLAN FOR
PROVINCES THAT CHOOSE NOT TO
ENACT A GREEN ENERGY PROGRAM OR
ANY SORT OF CARBON ABATEMENT PROGRAM.

Steve says WHICH IS ONTARIO NOW.

Peter says ONTARIO IS NOW IN THAT
SITUATION.

Steve says SO THIS IS THE
SO-CALLED FEDERAL BACKSTOP.

Peter says THIS IS THE FEDERAL BACKSTOP.

Steve says IF WE DON'T HAVE A
PLAN, THE FEDERAL GOVERNMENT'S
PLAN KICKS IN.

Peter says KIND OF LIKE THE BACKSTOP IN
BASEBALL.

Steve says I LOVE THAT METAPHOR.
SHELDON, CAN WE BRING THAT BACK UP?
BY ONTARIO'S CANCELLING ITS OWN
CAP AND TRADE PLAN, THE FEDERAL
BACKSTOP KICKS IN, AND UNLESS
I'M READING THIS COMPLETELY
INCORRECTLY, WHICH I DON'T THINK
I AM, THE FEDERAL PLAN IS
ACTUALLY FAR MORE EXPENSIVE TO
EACH INDIVIDUAL ONTARIAN'S
BOTTOM LINE THAN THE PROVINCIAL
PLAN WOULD HAVE BEEN.

Peter says YOU'RE EXACTLY READING IT
PERFECTLY RIGHT.

Steve says THE DARK BARS ARE
HIGHER THAN THE RED BARS.

Peter says YES.

Steve says SO TELL ME WHY IT
MAKES SENSE... OH, THIS IS ONE
OF THESE QUESTIONS YOU'RE GOING
TO DODGE.
I CAN SEE IT RIGHT BEFORE I...

Peter says NO!

Steve says WHY DOES IT MAKE SENSE
TO CANCEL THE CAP AND TRADE MADE
IN ONTARIO PROGRAM ONLY TO HAVE
A MORE EXPENSIVE FEDERAL PROGRAM
COME IN IN ITS STEAD?

The caption changes to "Peter Weltman, @InfoFAO."

Peter says WELL, THAT WOULD BE AN
EXCELLENT QUESTION FOR THE
MINISTER OF THE ENVIRONMENT OR
THE MINISTER OF ENERGY.
SO CERTAINLY THERE WERE POLICY
REASONS BEHIND WHY THESE
PROGRAMS WERE CANCELLED.
IT WAS PART OF THE ELECTORAL PLATFORM.
SO WHEN A PARTY RUNS FOR
ELECTION ON A SPECIFIC PROMISE,
THEY TEND TO LIKE TO KEEP THESE
PROMISES.

Steve says NO, I GET THAT, BUT I
WONDER IF PART OF THE MIX HERE
IS THAT THE PROVINCE OF ONTARIO
IS SO CONFIDENT THAT WHEN IT
GOES TO COURT, CHALLENGING THE
FEDERAL BACKSTOP, THE FEDERAL
CARBON TAX, THAT THAT TAX WILL
BE ELIMINATED AND, THEREFORE,
THESE EXPENDITURES WILL ACTUALLY
NOT BE PAID BY ONTARIANS.
IS THAT POSSIBLE?

Peter says I HAVE NO IDEA.
I CAN'T SPECULATE ON THE OUTCOME
OF EVEN REASON WHY SOME PROGRAMS
ARE EXISTING, LET ALONE A COURT
CASE THAT MAY TAKE YEARS TO
RESOLVE.
SO I'M NOT... I'VE ONLY BEEN ON
THE JOB SIX MONTHS.
THE CRYSTAL BALL IS STILL A BIT
CLOUDY.

Steve says ONLY ON THE JOB SIX
MONTHS BUT YOU'VE ALREADY QUITE
CLEARLY LEARNED WHAT QUESTIONS
YOU SHOULD AND SHOULD NOT
ANSWER.
OKAY, GOOD.
WHAT KIND OF FEEDBACK HAVE YOU
HAD ON THIS REPORT?

The caption changes to "Feedback."

Peter says I'VE HAD VERY GOOD FEEDBACK,
ACTUALLY, FROM ALL SIDES.
I THINK PEOPLE UNDERSTOOD IT
BECAUSE IT WAS CLEAR.
THERE ARE A FEW THINGS GOING ON
IN THIS REPORT THAT ARE A LITTLE
BIT COMPLICATED.
I THINK REALLY THE PIECE THAT
I'M MOST PROUD OF IS THE FACT
THAT WE WERE ABLE TO COMPARE THE
CHART THAT YOU JUST HAD UP, THE
IMPACT ON AVERAGE HOUSEHOLDS
UNDER A CAP AND TRADE AND UNDER
A FEDERAL BACKSTOP.
WE DID AN EXTRA PIECE TO THAT.
WE SAID LET'S ASSUME THAT THE
FEDERAL BACKSTOP GOES IN, AND
THAT'S A REASONABLE ASSUMPTION
BECAUSE THE LEGISLATION HAS BEEN
PASSED.

The caption changes to "Connect with us: Twitter: @theagenda; Facebook, agendaconnect@tvo.org, Instagram."

Steve says IT'S THE LAW RIGHT NOW.

Peter says IT IS THE LAW RIGHT NOW.
THERE JUST NEEDS TO BE A
REGULATION PUT INTO EFFECT WHICH
APPARENTLY I HEAR WILL HAPPEN IN
NOVEMBER.
AND ON JANUARY 1, THE CARBON
BACKSTOP WILL APPLY.
WE MODELLED A SCENARIO WHEREBY
THE FEDERAL GOVERNMENT REMITTED
THOSE REVENUES, RAISED FROM THAT
BACKSTOP, RIGHT BACK TO ONTARIO
HOUSEHOLDS.
AND IN FACT WE FOUND 80 percent OF
ONTARIO HOUSEHOLDS WOULD BE
BETTER OFF UNDER THAT SCENARIO.
THEY WOULD ACTUALLY GET BACK
MORE THAN THEY HAD PAID IN, IN
CARBON TAX.

Steve says LET'S UNDERSTAND THAT.
SO IF THE FEDERAL BACKSTOP GOES
IN, 80 percent OF THE PEOPLE IN ONTARIO
WILL GET A CHEQUE DIRECTLY FROM
THE FEDERAL GOVERNMENT REMITTING
TO THEM...

Peter says A NOTIONAL CHEQUE.
IT MIGHT BE A DIVIDEND, WE DON'T
KNOW, AND THE FEDERAL GOVERNMENT
HASN'T SPECIFIED EXACTLY HOW IT
WOULD DO IT, BUT THEY HAVE
SUGGESTED THAT THAT WAS ONE OF
THE OPTIONS THEY WERE LOOKING
AT.
AND THERE HAVE BEEN A NUMBER OF
RECENT STUDIES, ACTUALLY,
ADVOCATING FOR THAT OPTION.
WE CHOSE THAT OPTION BECAUSE THE
ENVIRONMENT MINISTER FEDERALLY
HAD SAID THIS WAS SOMETHING THAT
WE ARE CONSIDERING, SO WE
THOUGHT, OKAY, THE BACKSTOP'S
PROBABLY GOING TO COME IN.
I MEAN, THE COURT CASE MAY OR
MAY NOT BE SUCCESSFUL AND IT MAY
OR MAY NOT HAPPEN BEFORE JANUARY
1.
WE DON'T KNOW THAT, BUT WE DO
KNOW THE BACKSTOP WILL BE THERE
ON JANUARY 1, BARRING WHATEVER
HAPPENS IN COURT, AND WE DO KNOW
THAT THERE'S A REASONABLE
INTENTION OF THE FEDERAL
GOVERNMENT TO REMIT A DIVIDEND.
SO THAT'S WHY WE DID THAT
SCENARIO.

Steve says AND THE 80 percent OF THE
PEOPLE WHO WOULD BE BETTER OFF
UNDER THAT SCENARIO, DO WE HAVE
ANY SENSE ABOUT, YOU KNOW, WHO
THOSE PEOPLE ARE, WHAT THEIR
LEVELS OF INCOME ARE, THAT KIND
OF THING?

Peter says WE DIDN'T DO THAT SORT OF
ANALYSIS.
THAT'S SOMETHING THAT WE MAY
FOLLOW UP WITH, BECAUSE THOSE
HAVE BEEN QUESTIONS THAT I'VE
BEEN GETTING AFTER DOING THIS
SORT OF EXPLANATION.
ALL I CAN ANSWER AT THE MOMENT
IS THESE ARE FOLKS THAT CLEARLY
AREN'T CONSUMING AS MANY CARBON
EMITTING OR GHG EMITTING
PRODUCTS AS OTHERS.
SO FOR EXAMPLE, IF YOU LIVE, YOU
KNOW... THE EASY EXAMPLE IS YOU
LIVE IN DOWNTOWN TORONTO, YOU
WALK TO WORK, YOU KNOW, MAYBE
YOU LIVE IN A TENT OR SOMETHING
BECAUSE MAYBE THAT'S ALL YOU CAN
AFFORD IN DOWNTOWN TORONTO, I'M
JUST BEING A LITTLE FACETIOUS,
COMING FROM OTTAWA IT'S BEEN A
BIT OF A SHOCK FOR ME, YOU'RE
NOT EMITTING A LOT OF GHGS,
YOU'RE PROBABLY GOING TO BE IN
THAT BENEFICIARY OF THIS SORT OF
THING.
IF YOU'RE SOMEBODY WHO'S LIVING
MAYBE FURTHER AFIELD, MAYBE
NEEDS TO RUN A LARGER VEHICLE
BECAUSE YOU'RE ON BACKROADS OR
MAYBE, YOU KNOW, MAYBE YOU'RE
LIVING UP NORTH AND YOU NEED TO
BURN DIESEL FUEL TO GENERATE
ELECTRICITY, YOU'RE PROBABLY
GOING TO GET ON THE OTHER SIDE
OF THE LEDGER.

Steve says UNDERSTOOD.
DOES THE FINANCIAL
ACCOUNTABILITY OFFICER MAKE A
VALUE JUDGMENT AS TO WHETHER OR
NOT... WE'RE CONSIDERING TWO
DIFFERENT KINDS OF POLLUTION
ABATEMENT PLANS HERE.
WE HAVE THE CAP AND TRADE PLAN
WHICH ONTARIO BROUGHT IN AND A
FEDERAL TAX WHICH IS GOVERNMENT
HAS BROUGHT IN.
DO YOU MAKE A VALUE JUDGMENT ON
WHICH FORMAT IS BETTER FOR
REDUCING POLLUTION IN THE
ENVIRONMENT?

Peter says WE DON'T DO THAT.
THE ONLY THING WE'LL MAKE A
VALUE JUDGMENT ON, THE ONLY
THING THAT I ADVOCATE FOR, IS
TRANSPARENCY.
BUDGET AND FINANCIAL
TRANSPARENCY.
SO ANYTHING ELSE IS SOMEBODY
ELSE'S BUSINESS, REALLY.

Steve says AT THE RISK OF GETTING
IN THE WEEDS HERE, BUT I REALLY
WANT PEOPLE TO UNDERSTAND THE
DIFFERENCE BETWEEN THE TWO
OPTIONS THAT THEY'RE FACING
RIGHT HERE.

Peter says YEAH, ABSOLUTELY.
I CAN TALK ABOUT THAT.

The caption changes to "tvo.org/theagenda; agendaconnect@tvo.org."

Steve says THE DIFFERENCE BETWEEN
A CAP AND TRADE PLAN WHICH IS
NOW CANCELLED BUT WHAT IT
INTENDED TO DO VERSUS WHAT THE
FEDERAL BACKSTOP, THE CARBON TAX
PLAN THAT THEY HAVE, IS INTENDED
TO DO?

Peter says WELL, THEY ARE BOTH INTENDED
TO REDUCE GHG EMISSIONS, AND
THEY DO IT IN TWO DIFFERENT
WAYS.
SO THE BIG DIFFERENCE BETWEEN
THE TWO IS IN CAP AND TRADE...
SO EFFECTIVELY BOTH PROGRAMS TRY
TO SET A PRICE ON CARBON.
ONE OF THEM, CAP AND TRADE, DOES
IT THROUGH A MARKET MECHANISM,
WHEREBY THOSE COMPANIES WHO ARE
PRODUCING PRODUCTS THAT EMIT
GHGS NEED TO BUY PERMITS OR
ALLOWANCES TO ALLOW THEM TO DO
THAT.

Steve says AND LAST YEAR THEY
BOUGHT 2 BILLION DOLLARS WORTH OF
PERMITS.

Peter says THAT'S RIGHT, AND THEY BOUGHT
2 BILLION DOLLARS WORTH OF PERMITS.
THE GOVERNMENT DECIDES THE TOTAL
AMOUNT OF PERMITS THAT ARE
AVAILABLE FOR AUCTION, AND THEN
THE PRICE IS SET BY THOSE WHO
PARTICIPATE IN THE AUCTION.

Steve says SO THAT IS... THAT HAS
BEEN... YOU MAY NOT WANT TO USE
THIS ADJECTIVE BECAUSE YOU DON'T
LIKE THEM, BUT THAT HAS BEEN
SIGNIFICANT REVENUE TO THE
ONTARIO GOVERNMENT FOR THE LAST
COUPLE OF YEARS.

Peter says THOSE ARE FINE ADJECTIVES TO
USE THOSE.
I'LL USE THOSE.

Steve says YOU'RE OKAY WITH THAT.

Peter says I'M OKAY WITH THAT.
AND THE GOVERNMENT HAD PROMISED
TO REPURPOSE THOSE REVENUES INTO
INVESTMENTS, PROGRAMS,
EXPENDITURES THAT WOULD HAVE A
REASONABLE CHANCE OF LEADING TO
REDUCTION IN GHGS.

Steve says A CLEANER ENVIRONMENT.

Peter says A CLEANER ENVIRONMENT, THAT'S RIGHT.
SO THINGS LIKE, YOU KNOW,
PROMOTING THE USE OF ELECTRIC
VEHICLES OR RETROFITTING OUR
WINDOWS OR UPGRADING YOUR
HEATING AND VENTILATION SYSTEMS,
THAT SORT OF THING.
THAT'S WHERE THE MONEY WAS
SUPPOSED TO GO.

Steve says FOR CAP AND TRADE.

Peter says SO THE MONEY COMING IN FROM
THE AUCTIONS, COMPANIES BUY
THESE PERMITS FROM THE
GOVERNMENT, THEY SEND THE MONEY
TO THE GOVERNMENT, THE
GOVERNMENT PUTS THEM IN A FUND
THAT GOES AND FUNDS THESE OTHER
INITIATIVES TO REDUCE GREENHOUSE GASES.

Steve says GOTCHA.
THE OTHER ONE?

Peter says THE FEDERAL CARBON TAX IS
SIMPLY A TAX ON THOSE WHO ARE
EMITTING GHGS, SO SAME SORT OF
IDEA.
IF YOU ARE EMITTING A CERTAIN
TONNAGE OF GHGS EACH YEAR IN
YOUR PRODUCTION PROCESS, YOU
WILL PAY I THINK IT'S 50 A
TONNE OF CARBON EQUIVALENT FOR
THE PURPOSE OR THE PRIVILEGE OF
DOING THAT.
AND THEN YOU WILL LIKELY PASS
THOSE COSTS ALONG DOWN THE CHAIN
TO THE END-USER WHO WILL PAY
MORE FOR THEIR PRODUCT.

Steve says AND OBVIOUSLY IT'S AN
INCENTIVE TO POLLUTE LESS
BECAUSE THEN YOU PAY LESS TAX.

Peter says PAY LESS TAX, EXACTLY.

Steve says AND DO YOU... YOU DO
NOT OR YOU DO HAVE A VIEW ON
WHICH WAY IS A BETTER WAY TO
DEAL WITH POLLUTION?

Peter says WHAT WE DID TO ANSWER THAT
QUESTION IS WE DON'T HAVE A
VIEW, BUT WE DID DO SOME
RESEARCH, AND THERE ISN'T A
VIEW.
THERE IS ACTUALLY NO OVERARCHING
CONSENSUS AS TO WHAT WAY IS THE
BEST WAY TO GO.
THEY ARE BOTH EFFECTIVE FOR
THEIR OWN PURPOSES.
SO IF IT'S SOMETHING THAT YOU
WANT TO RUN THROUGH AND YOU WANT
TO HAVE SOME CONTROL AS A
GOVERNMENT OVER THE
EXPENDITURES, THEN MAYBE CAP AND
TRADE IS A WAY TO GO, BUT IT
DOESN'T STOP YOU FROM HAVING
CONTROL OVER THE EXPENDITURES
UNDER A CARBON TAX SCENARIO.
THERE'S NO REQUIREMENT TO REMIT
THAT CARBON TAX DIRECTLY TO
HOUSEHOLDS.
YOU COULD TAKE THAT MONEY AND
PUT THEM INTO AN EXPENDITURE
ACCOUNT AS WELL.
SO THERE ARE LOTS OF... THAT'S
WHY IT'S... THEY ARE DIFFERENT
MECHANISMS.
THEY BOTH CAN ACHIEVE THE SAME
OUTCOME.

Steve says THAT'S ALSO WHY,
THOUGH... YOU MAY NOT WANT TO
SAY THIS, BUT I THINK I SHOULD
SAY THAT'S WHY A LOT OF
CONSERVATIVES DON'T LIKE THE
CARBON TAX BECAUSE IT IS A TAX
THAT JUST GOES IN THE GENERAL
REVENUES AND ISN'T NECESSARILY
EARMARKED FOR ENVIRONMENTAL
IMPROVEMENT.

Peter says IT'S NOT ENTIRELY RIGHT.

Steve says NO?
OKAY.

Peter says THE TAX DOES NOT GO INTO
GENERAL REVENUES.
IT GOES INTO A SPECIAL FUND.
SO THE... I DON'T REMEMBER IT
OFFHAND.
IT'S A GREENHOUSE GAS FUND OF
SOME SORT.
IT'S AN EARMARKED BASKET OF
MONEY TO BE USED FOR THESE
PROJECTS.

Steve says OKAY, GOOD
CLARIFICATION.

Peter says BUT IN CAP AND TRADE,
GOVERNMENTS DO HAVE A FAIR BIT
OF INFLUENCE ON THE AUCTION
PROCESS BECAUSE THEY'RE THE ONES
THAT ARE ISSUING THE PERMITS.

Steve says GOTCHA.

Peter says SO THEY CAN DECIDE TO ISSUE
MORE PERMITS, ISSUE FEWER
PERMITS, THEY CAN DECIDE TO
ISSUE FREE PERMITS OR THAT SORT
OF THING.
SO THEY HAVE, EVEN THOUGH IT'S
AN AUCTION MECHANISM OR A MARKET
MECHANISM THAT SETS THE PRICE,
IT'S A BIT OF A MANAGED MARKET.
SO THAT VERY WELL MAY BE WHY
SOME CONSERVATIVES WHO... THOSE
FOLKS WHO PREFER TO SEE LESS
GOVERNMENT INVOLVEMENT IN
DAY-TO-DAY ACTIVITIES MAY NOT
LIKE A CAP AND TRADE PROGRAM AS
MUCH AS THEY MIGHT PREFER A
CARBON TAX.
WHICH IS LESS GOVERNMENT...
GOVERNMENT BASICALLY SETS A
PRICE, A TAX ON THE CARBON, AND
THEN THEY WALK AWAY.

Steve says OKAY.
GIVEN THAT THE PROVINCIAL
GOVERNMENT, THE NEW DOUG FORD
GOVERNMENT, HAS COME OUT AND
SAID WE NOW BELIEVE THE DEFICIT
FOR THE PROVINCE OF ONTARIO IS
15 BILLION DOLLARS, NOT WHAT THE
LIBERALS SAID BEFORE, NOT EVEN
WHAT THE AUDITOR GENERAL SAID
BEFORE.

Peter says AND NOT EVEN WHAT WE SAID
BEFORE.

Steve says AND NOT EVEN YOU.
THEY HAVE A BUOYANT NUMBER OUT
THERE, OR I GUESS THE OPPOSITE
OF BUOYANT, A SINKING NUMBER OUT
THERE, THE BOTTOM OF THE OCEAN.
THEIR JOB OF BALANCING THE BOOKS
BASED ON YOUR REPORTING JUST GOT
A WHOLE HECK OF A LOT MORE
DIFFICULT, DID IT NOT?

The caption changes to "Balancing the books?"

Peter says WELL, DIFFICULT IS A JUDGMENT
CALL, BUT CERTAINLY IF YOUR
OBJECTIVE IS TO BALANCE THE
BOOKS, YES, IT DID GET MORE
DIFFICULT.
THERE IS MORE MONEY NOW THAT
YOU'RE GOING TO HAVE TO FIND...
YOU KNOW, THERE'S A LARGER
DEFICIT YOU'RE GOING TO HAVE TO
FIND A WAY TO FIX.
SO YES.
THE 15 BILLION DOLLARS I THINK I SHOULD
CLARIFY IS... THE NUMBER THAT
CAME OUT OF THE COMMISSION OF
INQUIRY ABOUT THE FINANCIAL
TRANSACTIONS, ET CETERA, OUR
NUMBER WAS DIFFERENT LAST YEAR.
WE ARE GOING TO BE UPDATING OUR
FORECAST IN NOVEMBER.
SO TYPICALLY WE PROVIDE A
FORECAST TWICE A YEAR, AND IT'S
OUR OWN FORECAST BASED ON WHAT
WE OBSERVE IN THE ECONOMY, BASED
ON OUR OWN MODELLING.
AND BASED ON WHAT THE AUDITOR
GENERAL DETERMINES OUR
ACCOUNTING ROLES AROUND THE
PENSIONS AND AROUND FAIR HYDRO.
SO WE USE THAT AS OUR STARTING
POINT.
BUT THEN WE PROVIDE OUR OWN
INDEPENDENT ASSESSMENT TO THE
LEGISLATURE.

Steve says OKAY.
YOU GOT THIS WHOLE THING GOING
HERE BECAUSE ONE MEMBER OF THE
LEGISLATURE ASKED YOU TO DO IT.

Peter says THAT'S RIGHT.

Steve says ANDREA HORWATH ASKED
YOU TO LOOK INTO THE CAP AND
TRADE IMPACT.
CAN ANY MEMBER ASK YOU
TO LOOK INTO ANYTHING AND DO YOU
HAVE TO DO IT?

Peter says THAT'S A VERY GOOD QUESTION.
SO MEMBERS CAN ASK US TO LOOK
INTO ANYTHING RELATED TO OUR MANDATE.
COMMITTEES CAN MAKE REQUESTS OF US.
WE CAN UNDERTAKE WORK UNDER OUR
OWN VOLITION, IF YOU WILL, AND
THE LEGISLATION DOES PERMIT ME
TO REFUSE TO DO WORK.
SO IT'S NOT SOMETHING THAT, YOU
KNOW, AGAIN, I'VE ONLY BEEN ON
THE JOB SIX MONTHS.
I WAS AT THE PARLIAMENTARY
BUDGET OFFICE FOR NINE AND A
HALF YEARS IN OTTAWA, SO I HAD A
CHANCE TO... I HAD A LITTLE BIT
OF PRACTICE AT THIS.
WHAT WE TEND TO DO WITH REQUESTS
THAT COME IN THAT DON'T
NECESSARILY LINE UP TO OUR
MANDATE IS WE'LL WORK WITH THE
MPP OR THE COMMITTEE TO
REFORMULATE THE QUESTION TO GET
AT THE ANSWER THEY WANT TO GET
AT BUT SOMETHING THAT WE CAN...
WORK THAT WE CAN UNDERTAKE.
SO I DON'T LIKE TO TELL PEOPLE
WE REFUSE REQUESTS, BUT WE WILL
TRY TO WORK WITH WHOEVER IS
ASKING US TO DO THE WORK TO TRY
TO GIVE THEM SOMETHING THAT IS
USEFUL FOR THEM.

Steve says UNDERSTOOD. WELL THIS,
I HAVE TO SAY, WAS USEFUL.

Peter says GOOD.

Steve says I THINK WE UNDERSTAND
THE SITUATION NOT ONLY WHAT YOU
DO BUT THE WHOLE CAP AND TRADE
COST OF THE BOTTOM LINE OF THE
PROVINCE A LOT BETTER NOW.

Peter says GOOD.

Steve says WHICH IS MY WAY OF
SAYING THANKS FOR COMING IN.

Peter says THANKS FOR HAVING ME IN. I'M
GLAD YOU GAVE ME THE OPPORTUNITY
TO EXPLAIN IT.

Steve says NOT AT ALL. HOW LONG
IS YOUR TERM?

The caption changes to "Producer: Meredith Martin, @MeredithMartin."

Peter says MY TERM IS FIVE YEARS.
RENEWABLE FOR ANOTHER FIVE IF
THEY DECIDE THEY WANT ME AROUND
THAT LONG. IT'S BEEN GREAT TO BE
IN TORONTO. IT'S A GREAT OFFICE.
I WALKED IN WITH A GREAT TEAM.
THEY'VE DONE SOME AMAZING WORK.
AND I HAVE TO SAY THAT THE
RELATIONSHIP THAT THIS OFFICE
HAS WITH THE EXECUTIVE BRANCH
HERE IS WONDERFUL, IT'S MATURE,
WHICH IS NOT THE CASE THAT IT
WAS IN OTTAWA.

Steve says THEY GAVE YOU ACCESS
TO CABINET DOCUMENTS.

Peter says WE HAVE ACCESS TO CABINET
DOCUMENTS. WE HAVE REGULAR INPUT
FROM THE PROFESSIONALS ON THE
GOVERNMENT'S SIDE ON OUR REPORTS
TO MAKE SURE WE'RE NOT SAYING
THINGS THAT DON'T MAKE SENSE.
AND THE MINISTER'S OFFICE DOES
GET A BRIEFING A LITTLE BIT IN
ADVANCE TO ALLOW THEM TO BE
PREPARED BUT NOT TOO LONG.

Steve says SUPER. WELL, WE'LL
HAVE YOU BACK IF YOU'RE GONNA
BE AROUND IN FIVE YEARS.
THAT'S PETER WELTMAN. HE'S THE
FINANCIAL ACCOUNTABILITY
OFFICER FOR THE PROVINCE OF
ONTARIO. THANKS, PETER.

Peter says THANK YOU.

Watch: Costing the Cancellation of Cap and Trade