OTTAWA, June 22, 2001 - Environment Minister David Anderson today issued this statement in response to the Ontario Government's proposal to reduce emissions from the electricity sector in the province and on its proposed emissions reductions trading system. Environment Minister Elizabeth Witmer unveiled these proposals on March 26, 2001 and invited residents of Ontario and others to comment.

"First let me congratulate the Ontario Government for its decision to switch from coal to natural gas at the Lakeview Generating station in Toronto. This decision will bring cleaner air when it comes into effect in 2005. Again, I encourage the province to consider extending the natural gas switch to other coal fired electricity-generating stations so that more Ontarians will benefit from less air pollution.

Second, I applaud the provincial decision to put a 42.84 kiloton province-wide cap on nitrogen dioxide emissions and the cap of 131 kilotons on sulphur dioxide emissions from the electricity sector by 2007. This measure is in line with our commitments to reduce transboundary air pollution under the Ozone Annex and make a substantial contribution to Ontario's commitments to reduce Acid Rain.

The Government of Canada supports the use of innovative economic instruments, such as emissions trading, to achieve environmental goals at a lower cost. The design of the emissions trading systems is critical to meeting our environmental and health goals at lower costs than traditional regulation. For those reasons, it is important that we get it right.

The proposed trading system is highly relevant to Canada's international obligations with the United States in the Ozone Annex. To meet commitments under the Canada-US Ozone Annex it is critical that trading of nitrogen dioxide emissions occurs only within capped sectors. Ontario's proposal however, includes the ability for the capped electricity sector to use emission reduction credits from uncapped sources. This will not guarantee that emissions limits are met.

In our response, we provided Ontario with suggestions on the proposed trading system and assured the Ontario Government that we are prepared to work with them to finalize the details should the province find that helpful.

We suggest Ontario consider capping other large sources of emissions such as industrial boilers, cement kilns and smelters to further improve air quality and increase the effectiveness of the trading system. Furthermore, we propose that their system ensure rigorous measurement, monitoring and tracking of emissions.

On this note, we urge Ontario to put a trading system in place that will mesh with the U.S. trading program. Discussions are underway with the United States to explore opportunities and challenges associated with cross-border trading. Putting in place an emissions trading system that works will help us meet not only our clean air commitments but take us on the road to meeting our climate change goals as well.

Canada is committed to meeting its international obligations. I urge the Ontario government to consider our suggestions and act on them for the benefit of all the people of the province."

Related Documents:

• Environment Canada Comment to the Ontario Government on Environmental Bill of Rights (EBR) Registry No. ra01e0009 Reduced Emission Limits for the Electricity Sector and an Emissions Reduction Trading System for Ontario
• Comments from Environment Canada on Environmental Bill of Rights (EBR) Registry No. RA01E0008 (Lakeview Thermal Generating Station Emission Limits)