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O. Reg. 450/17: THE CAP AND TRADE PROGRAM
filed November 24, 2017 under Climate Change Mitigation and Low-carbon Economy Act, 2016, S.O. 2016, c. 7
Skip to contentontario regulation 450/17
made under the
Climate Change Mitigation and Low-carbon Economy Act, 2016
Made: November 22, 2017
Filed: November 24, 2017
Published on e-Laws: November 27, 2017
Printed in The Ontario Gazette: December 9, 2017
Amending O. Reg. 144/16
(THE CAP AND TRADE PROGRAM)
1. (1) The definitions of “Auction Class 1 emission allowance” and “Auction Class 2 emission allowance” in subsection 1 (1) of Ontario Regulation 144/16 are revoked and the following substituted:
“Auction Class 1 emission allowance” means, when used in reference to an auction, an emission allowance that has no vintage year or a vintage year that is either the auction year or an earlier year; (“quota d’émission de la catégorie de mise aux enchères 1”)
“Auction Class 2 emission allowance” means, when used in reference to an auction, an emission allowance that has a vintage year that is later than the auction year; (“quota d’émission de la catégorie de mise aux enchères 2”)
(2) The definition of “bid price” in subsection 1 (1) of the Regulation is amended by striking out “Ontario” before “emission allowance”.
(3) Subsection 1 (1) of the Regulation is amended by adding the following definition:
“California Regulation” means the Regulation for the California Cap on Greenhouse Gas Emissions and Market-Based Compliance Mechanisms, title 17, California Code of Regulations; (“règlement de la Californie”)
(4) The definition of “clearing house” in subsection 1 (1) of the Regulation is revoked.
(5) The definition of “current vintage emission allowance” in subsection 1 (1) of the Regulation is revoked and the following substituted:
“current vintage emission allowance” means, when used in reference to the current year, an emission allowance that has a vintage year that is either the current year or an earlier year; (“quota d’émission du millésime passé ou présent”)
(6) Subsection 1 (1) of the Regulation is amended by adding the following definitions:
“early reduction credit” means an Ontario early reduction credit or an instrument that is prescribed under section 10.1 to be treated as an early reduction credit; (“crédit pour réduction anticipée”)
“external account” means an account established by a designated jurisdiction under a corresponding program of that jurisdiction; (“compte externe”)
“external account representative” means an individual designated or authorized to act as an account representative for an externally authorized participant in a designated jurisdiction under a corresponding program of that jurisdiction; (“représentant de comptes externe”)
“external clearing house” means an externally authorized participant that provides clearing services in the designated jurisdiction in which the participant is authorized to participate as an externally authorized participant; (“chambre de compensation externe”)
“externally authorized participant” means a person who is authorized by a designated jurisdiction to participate in a corresponding program of that jurisdiction; (“participant autorisé à l’externe”)
(7) The definition of “future vintage emission allowance” in subsection 1 (1) of the Regulation is revoked and the following substituted:
“future vintage emission allowance” means, when used in reference to the current year, an emission allowance that has a vintage year that is later than the current year; (“quota d’émission de millésime futur”)
(8) Subsection 1 (1) of the Regulation is amended by adding the following definitions:
“offset credit” means an Ontario offset credit or an instrument that is prescribed under section 10.1 to be treated as an offset credit; (“crédit compensatoire”)
“Ontario clearing house” means a recognized clearing agency as defined in the Securities Act, or a person who has been exempted under section 147 of that Act from the requirement to be a recognized clearing agency; (“chambre de compensation de l’Ontario”)
(9) Subsection 1 (1) of the Regulation is amended by adding the following definition:
“Quebec Regulation” means the Regulation respecting a cap-and-trade system for greenhouse gas emission allowances (CQLR, chapter Q-2, r. 46.1); (“règlement du Québec”)
(10) Section 1 of the Regulation is amended by adding the following subsections:
(3) In this Regulation, a reference to the vintage year of an emission allowance is,
(a) in the case of an Ontario emission allowance, the vintage year to which the Minister has classified the emission allowance; and
(b) in the case of an emission allowance created by a designated jurisdiction, the vintage year assigned to the emission allowance by that jurisdiction.
(4) In this Regulation, a reference to the creation of an emission allowance or the issuance of a credit includes, where the emission allowance or credit is not an Ontario emission allowance or an Ontario credit, the creation or issuance of the equivalent instrument by a designated jurisdiction.
(5) In this Regulation, a reference to a corresponding program of a designated jurisdiction is a reference to a program established in that jurisdiction that corresponds to the cap and trade program established under the Act.
2. (1) Paragraph 1 of subsection 2 (2) of the Regulation is revoked and the following substituted:
1. A single individual acts as one of the following for both persons and is an employee of at least one of the persons:
i. A designated account representative of one of the persons, if the person is a registered participant.
ii. An external account representative, if the person is an externally authorized participant.
(2) Section 2 of the Regulation is amended by adding the following subsection:
(2.1) If two persons are related persons under subsection (2), the first person is also related to any person to whom the second person is related, and vice versa.
3. Subparagraph 1 ii of subsection 9.0.1 (1) of the Regulation is amended by adding “specified” before “GHG activities”.
4. The Regulation is amended by adding the following sections:
Instruments created by designated jurisdictions, s. 38 of the Act
10.1 (1) An instrument set out in Column 1 of the Table to this section that is created by the designated jurisdiction set out opposite the instrument in Column 2 is recognized for use in Ontario’s cap and trade program and is to be treated as the instrument set out opposite the instrument in Column 3 of the Table.
(2) An instrument set out in Column 1 of the Table to this section is equivalent to one tonne of CO2e.
Table
|
Item |
Column 1 Instrument |
Column 2 Designated jurisdiction that created the instrument |
Column 3 Treatment of instrument |
|
1. |
Greenhouse gas emission unit created under the Quebec Regulation. |
Quebec |
Emission allowance |
|
2. |
Reserve emission unit created under the Quebec Regulation. |
Quebec |
Emission allowance |
|
3. |
Offset credit created under the Quebec Regulation. |
Quebec |
Offset credit |
|
4. |
Early reduction credit created under the Quebec Regulation. |
Quebec |
Early reduction credit |
|
5. |
California greenhouse gas emissions allowance created under the California Regulation. |
California |
Emission allowance |
|
6. |
ARB offset credit created under the California Regulation. |
California |
Offset credit |
Restriction on transfer of ARB offset credit
10.2 No ARB offset credit shall be transferred to a compliance account before the day of the applicable deadline for submitting emission allowances and credits under section 14 of the Act.
5. Sections 13 and 14 of the Regulation are revoked and the following substituted:
Restriction, emission allowances and credits
13. (1) Subject to subsection (2), no emission allowances may be submitted for a compliance period if they have a vintage year that is later than a year in the compliance period.
(2) Emission allowances that have a vintage year that is either the first or second year following the end of the compliance period may be submitted by a participant for a compliance period if the number of such emission allowances does not exceed the number of Ontario emission allowances distributed to the participant free of charge for those two vintage years under subsection 31 (2) of the Act in respect of the production adjustment calculations done in accordance with the document entitled “Methodology for the Distribution of Ontario Emission Allowances Free of Charge”, published by the Ministry and available from the Ministry, dated November 2017.
(3) The number of offset credits that may be submitted by a participant for a compliance period shall not exceed 8 per cent of the greenhouse gas emissions attributed to the participant for the compliance period.
6. (1) Subsection 15 (1) of the Regulation is amended by striking out “Ontario” wherever it appears.
(2) Subsection 15 (2) of the Regulation is revoked and the following substituted:
(2) A capped participant may submit to the Minister emission allowances, offset credits and early reduction credits by taking the following steps:
1. A designated account representative of the participant must submit to the Minister and to all other designated account representatives of the participant a notice of the participant’s intent to submit the emission allowances and credits.
2. A second designated account representative of the participant must, no later than two days following the submission of the notice of intent under paragraph 1, submit to the Minister and to all other designated account representatives of the participant a confirmation of the participant’s intent to submit the emission allowances and credits.
(3) Subsections 15 (3) and (4) of the Regulation are amended by striking out “Ontario” wherever it appears.
7. (1) Paragraph 1 of subsection 16 (1) of the Regulation is amended by striking out “Ontario” wherever it appears.
(2) Paragraph 1 of subsection 16 (2) of the Regulation is revoked and the following substituted:
1. The Minister shall remove any offset credits that may be submitted for the compliance period, beginning with the credits that were issued first and continuing chronologically to the most recently issued credits.
(3) Paragraph 2 of subsection 16 (2) of the Regulation is revoked and the following substituted:
2. The Minister shall remove any emission allowances that do not have a vintage year until no more of those allowances remain in the compliance account.
(4) Paragraph 3 of subsection 16 (2) of the Regulation is amended by striking out “Ontario”.
(5) Paragraphs 4 and 5 of subsection 16 (2) of the Regulation are revoked and the following substituted:
4. The Minister shall remove any emission allowances that may be submitted for the compliance period, beginning with the emission allowances with the earliest vintage year and continuing chronologically to the emission allowances with the most recent vintage year, until no more of those emission allowances remain in the compliance account.
8. (1) Paragraph 1 of subsection 18 (2) of the Regulation is amended by striking out the portion before subparagraph i and substituting the following:
1. To satisfy the shortfall mentioned in paragraph 1 of subsection 14 (7) of the Act, the Minister shall remove offset credits, beginning with the credits that were issued first and continuing chronologically to the most recently issued credits until the earlier of the following:
. . . . .
(2) Paragraph 2 of subsection 18 (2) of the Regulation is amended by striking out “Ontario”.
(3) Paragraph 3 of subsection 18 (2) of the Regulation is revoked and the following substituted:
3. To satisfy the shortfall mentioned in paragraph 1 of subsection 14 (7) of the Act and to satisfy the amount mentioned in paragraph 3 of subsection 14 (7) of the Act, the Minister shall,
i. remove any emission allowances that do not have a vintage year until no more of those emission allowances remain in the cap and trade accounts, and
ii. if no emission allowances described in subparagraph i remain, remove any emission allowances that have a vintage year that is a year in the compliance period or an earlier year, beginning with the emission allowances with the earliest vintage year and continuing chronologically to the emission allowances with the most recent vintage year, until no more of those emission allowances remain in the cap and trade accounts.
(4) Paragraphs 4 and 5 of subsection 18 (2) of the Regulation are amended by striking out “Ontario” wherever it appears.
(5) Subsection 18 (3) of the Regulation is amended by striking out “Ontario”.
9. Paragraph 2 of subsection 20.1 (1) of the Regulation is amended by striking out “Ontario”.
10. Subsection 21 (2) of the Regulation is amended by striking out “a clearing house” at the end and substituting “an Ontario clearing house”.
11. (1) Paragraph 1 of subsection 26 (1) of the Regulation is revoked and the following substituted:
1. The participant must notify the Director of any change to the following information no later than 30 days following the change:
i. Information required under section 25.
ii. Any other information required by the Director upon application for registration.
(2) Section 26 of the Regulation is amended by adding the following subsections:
(5) Subject to subsections (6) and (7), if a participant was not required to provide some of the information set out in Schedule 1 at the time of registration because the participant was registered before the day Ontario Regulation 450/17 made under the Act came into force, the participant shall provide that information to the Director no later than January 30, 2018 and the condition set out in paragraph 1 of subsection (1) applies to the participant in respect of that information on and after January 30, 2018.
(6) If the participant mentioned in subsection (5) wishes to participate in the first auction held in 2018, for the purposes of paragraph 1 of subsection 67 (1), it is a condition of the participant’s registration that no later than 40 days before the day of the auction, the participant must submit the information to the Director and update the information.
(7) If a person is a related person in respect of a participant mentioned in subsection (5) who wishes to participate in the first auction held in 2018, for the purposes of paragraph 1 of subsection 67 (1), it is a condition of the related person’s registration that no later than 40 days before the day of the auction, the related person must submit the information to the Director and update the information.
12. Subsection 28 (2) of the Regulation is amended by striking out “a clearing house” and substituting “an Ontario clearing house”.
13. Subsection 31 (1) of the Regulation is amended by striking out “for registration as a voluntary participant” in the portion before paragraph 1 and substituting “for registration in that year as a voluntary participant”.
14. (1) Paragraph 1 of subsection 34 (1) of the Regulation is revoked and the following substituted:
1. The participant must notify the Director of any change to the following information no later than 30 days following the change:
i. Information required under section 32.
ii. Any other information required by the Director upon application for registration.
(2) Section 34 of the Regulation is amended by adding the following subsections:
(5) Subject to subsections (6) and (7), if a participant was not required to provide some of the information set out in Schedule 1 at the time of registration because the participant was registered before the day Ontario Regulation 450/17 made under the Act came into force, the participant shall provide that information to the Director no later than January 30, 2018 and the condition set out in paragraph 1 of subsection (1) applies to the participant in respect of that information on and after January 30, 2018.
(6) If the participant mentioned in subsection (5) wishes to participate in the first auction held in 2018, for the purposes of paragraph 1 of subsection 67 (1), it is a condition of the participant’s registration that no later than 40 days before the day of the auction, the participant must submit the information to the Director and update the information.
(7) If a person is a related person in respect of a participant mentioned in subsection (5) who wishes to participate in the first auction held in 2018, for the purposes of paragraph 1 of subsection 67 (1), it is a condition of the related person’s registration that no later than 40 days before the day of the auction, the related person must submit the information to the Director and update the information.
15. Section 37 of the Regulation is revoked and the following substituted:
Conditions
37. (1) It is a condition of registration as a market participant that the participant must notify the Director of any change to the following information no later than 30 days following the change:
1. Information required under subsection 36 (2).
2. Any other information required by the Director upon application for registration.
(2) Subject to subsections (3) and (4), if a participant was not required to provide some of the information set out in Schedule 1 at the time of registration because the participant was registered before the day Ontario Regulation 450/17 made under the Act came into force, the participant shall provide that information to the Director no later than January 30, 2018 and the condition set out in paragraph 1 of subsection (1) applies to the participant in respect of that information on and after January 30, 2018.
(3) If the participant mentioned in subsection (2) wishes to participate in the first auction held in 2018, for the purposes of paragraph 1 of subsection 67 (1), it is a condition of the participant’s registration that no later than 40 days before the day of the auction, the participant must submit the information to the Director and update the information.
(4) If a person is a related person in respect of a participant mentioned in subsection (2) who wishes to participate in the first auction held in 2018, for the purposes of paragraph 1 of subsection 67 (1), it is a condition of the related person’s registration that no later than 40 days before the day of the auction, the related person must submit the information to the Director and update the information.
16. (1) Subsection 38 (4) of the Regulation is amended by striking out “either” in the portion before paragraph 1 and substituting “any”.
(2) Paragraph 1 of subsection 38 (4) of the Regulation is amended by adding “or a similar offence under the law in respect of a corresponding program of a designated jurisdiction” at the end.
(3) Subsection 38 (4) of the Regulation is amended by adding the following paragraphs:
1.1 The participant has been convicted of an offence under the Securities Act or Commodity Futures Act.
1.2 The participant has been convicted of an offence similar to an offence mentioned in paragraph 1.1 under the law in a designated jurisdiction.
1.3 The participant’s status as an externally authorized participant has been cancelled in a designated jurisdiction for a reason other than a request of the participant.
17. (1) Subsections 40 (1), (2) and (3) of the Regulation are revoked and the following substituted:
Holding limit, current vintage emission allowances, etc.
(1) Subject to section 41, a registered participant shall ensure that the total number of emission allowances and credits mentioned in subsection (2) that are held in the participant’s cap and trade accounts does not at any time in a year exceed the limit determined by applying the following formula:
L = 2,500,000 + 0.025 × (C − 25,000,000)
where,
L = the limit, and
C = the number of emission allowances created for the year, both in Ontario and in designated jurisdictions.
(2) The limit applies in respect of the following held in a registered participant’s cap and trade accounts:
1. Current vintage emission allowances.
2. Emission allowances that do not have a vintage year.
3. Early reduction credits.
(3) Registered participants shall allocate the limit calculated under subsection (2) among themselves and all of the persons with whom they are related and who are either registered participants or externally authorized participants.
(3.1) No registered participant shall hold in the participant’s cap and trade accounts more than the share of the holding limit allocated to the participant under this section.
(2) Subsection 40 (4) of the Regulation is amended by striking out “a clearing house” at the end and substituting “an Ontario clearing house”.
18. (1) Subsections 42 (1) and (2) of the Regulation are revoked and the following substituted:
Holding limit, future vintage emission allowances
(1) A registered participant shall ensure that the total number of future vintage emission allowances held in the participant’s cap and trade accounts at any time in a year does not at any time in a year exceed the limit determined by applying the following formula in respect of each future vintage year:
HLj = 2,500,000 + 0.025 × (Cj − 25,000,000)
where,
HLj = the limit on future vintage emission allowances with vintage year j, and
Cj = the number of emission allowances created for year j, both in Ontario and in designated jurisdictions.
(2) Registered participants shall allocate the limit calculated under subsection (1) among themselves and all of the persons with whom they are related and who are either registered participants or externally authorized participants.
(2.1) No registered participant shall hold in the participant’s cap and trade accounts more than the share of the holding limit allocated to the participant under this section.
(2) Subsection 42 (3) of the Regulation is amended by striking out “a clearing house” at the end and substituting “an Ontario clearing house”.
19. Paragraphs 1 to 5 of subsection 43 (1.1) of the Regulation are revoked and the following substituted:
1. The Minister shall remove any emission allowances from the holding account, beginning with the emission allowances with the earliest vintage year and continuing chronologically to the emission allowances with the most recent vintage year, until no more of those emission allowances remain in the holding account.
2. The Minister shall remove any early reduction credits from the holding account until no more of those credits remain in the holding account.
3. The Minister shall remove any emission allowances from the compliance account, beginning with the emission allowances with the earliest vintage year and continuing chronologically to the emission allowances with the most recent vintage year, until no more of those emission allowances remain in the compliance account.
4. The Minister shall remove any early reduction credits from the compliance account until no more of those credits remain in the compliance account.
5. The Minister shall remove any emission allowances from the cap and trade accounts that do not have a vintage year until no more of those allowances remain in the accounts.
20. (1) Paragraph 1 of subsection 45 (1) of the Regulation is revoked and the following substituted:
1. The individual has not been convicted of,
i. a criminal offence in the five years before the individual submitted the application to the Director, unless a pardon, including a record suspension within the meaning of the Criminal Records Act (Canada), has been obtained, or
ii. a criminal offence constituting a felony under United States law in the five years before the individual submitted the application to the Director.
(2) Paragraph 2 of subsection 45 (1) of the Regulation is amended by adding “or a similar offence under the law in respect of a corresponding program of a designated jurisdiction” at the end.
(3) Paragraph 3 of subsection 45 (1) of the Regulation is amended by adding “or a similar offence under the law of a designated jurisdiction or the United States of America” at the end.
(4) Subsection 45 (6) of the Regulation is revoked and the following substituted:
(6) The Director may cancel an individual’s recognition as an account agent by providing the individual with written notice of the cancellation if the Director is satisfied that the individual no longer satisfies the criteria set out in paragraphs 1, 2 and 3 of subsection (1), or fails to provide information required under subsection (5) or subsection 51 (1).
21. (1) Paragraph 4 of subsection 47 (4) of the Regulation is amended by striking out “this Regulation” at the end and substituting “the Act and the regulations”.
(2) Paragraph 5 of subsection 47 (4) of the Regulation is revoked and the following substituted:
5. If the individual is designated by any other registered participant as an account representative or as an account viewing agent for the purposes of this Regulation, or is an external account representative for an externally authorized participant, a statement signed by the individual, providing the name and contact information of any such registered participant or externally authorized participant.
22. Sections 51 and 51.1 of the Regulation are revoked and the following substituted:
Transfers, general rules
51. (1) If the Minister asks a designated account representative of a registered participant for information relating to the transfer of emission allowances or credits under this Regulation, the account representative shall give the information to the Minister by the date specified by the Minister.
(2) Despite sections 51.1 51.1.1 and 51.1.2, the Minister shall not transfer emission allowances or credits to an Ontario clearing house or to an external clearing house if the transferor is an Ontario clearing house or an external clearing house.
(3) Despite any requirement in this Regulation that steps relating to a transfer be taken by different designated account representatives of a registered participant, the same individual may take the steps if the registered participant is a market participant that is an individual and has only one designated account representative.
(4) If emission allowances or credits that were transferred to the holding account of an Ontario clearing house remain in the holding account for a period exceeding five business days,
(a) the Ontario clearing house shall request a reversal of the transfer; and
(b) for the purposes of subsection 27 (4) of the Act, the Minister or Director may reverse the transfer, whether or not a request has been made under clause (a) of this subsection.
Transfers between registered participants
51.1 (1) This section applies in respect of the transfer of emission allowances or credits from a registered participant’s holding account to another registered participant’s holding account.
(2) A registered participant may submit a request to the Minister to transfer emission allowances or credits from the participant’s holding account to another registered participant’s holding account by taking the following steps:
1. A designated account representative of the transferor must submit to the Minister and to all other designated account representatives of the transferor a notice of the intent to transfer emission allowances or credits, setting out the information mentioned in section 51.2.
2. A second designated account representative of the transferor must, no later than two days following the submission of the notice of intent under paragraph 1, submit to the Minister and to all other designated account representatives of the transferor and to all designated account representatives of the intended transferee a confirmation of the transferor’s intent to transfer the emission allowances and credits specified in the notice.
(3) Subject to subsection (5), if the intended transferee wishes to accept the transfer, a designated account representative of the intended transferee must, no later than three days following the submission of the notice under paragraph 1 of subsection (2), submit to the Minister a confirmation of the intent to accept the transfer.
(4) Subject to subsection 50 (1), the Minister shall ensure that upon receipt of a confirmation mentioned in subsection (3) of this section, the emission allowances and credits specified in the confirmation are transferred.
(5) If either the transferor or the intended transferee is an Ontario clearing house,
(a) subsection (3) does not apply; and
(b) subject to subsection 50 (1), the Minister shall ensure that upon receipt of the confirmation mentioned in paragraph 2 of subsection (2) of this section, the emission allowances and credits specified in the confirmation are transferred.
Transfers, registered participant to externally authorized participant
51.1.1 (1) This section applies in respect of the transfer of emission allowances or credits from a registered participant’s holding account to an external account of an externally authorized participant.
(2) The registered participant may submit a request to the Minister to transfer the emission allowances or credits by taking the following steps:
1. A designated account representative of the registered participant must submit to the Minister and to all other designated account representatives of the registered participant a notice of the intent to transfer emission allowances or credits, setting out the information mentioned in section 51.2.
2. A second designated account representative of the registered participant must, no later than two days following the submission of the notice of intent under paragraph 1, submit to the Minister and to all other designated account representatives of the registered participant and to all external account representatives of the externally authorized participant a confirmation of the registered participant’s intent to transfer the emission allowances and credits specified in the notice.
(3) Subject to subsection (4), the Minister shall transfer the emission allowances or credits specified in the notice if the Minister is satisfied of the following:
1. That an external account representative of the externally authorized participant has submitted a confirmation of the intent to accept the transfer in accordance with the requirements of the corresponding program.
2. That the confirmation mentioned in paragraph 1 was submitted no later than three days following the submission of the notice of intent under paragraph 1 of subsection (2).
(4) If the registered participant is an Ontario clearing house,
(a) subsection (3) does not apply; and
(b) subject to subsection 50 (1), the Minister shall ensure that upon receipt of the confirmation mentioned in paragraph 2 of subsection (2) of this section, the emission allowances and credits specified in the confirmation are transferred.
Transfers, externally authorized participant to registered participant
51.1.2 (1) This section applies in respect of the transfer of emission allowances or credits from an external account of an externally authorized participant to the holding account of a registered participant.
(2) If the registered participant is not an Ontario clearing house, a designated account representative of the registered participant must, no later than three days following the submission of a notice of intent to transfer the emission allowances or credits that was submitted in accordance with the requirements of the corresponding program by an external account representative of the externally authorized participant, submit to the Minister a confirmation of the intent to accept the transfer.
(3) Subject to subsection 50 (1), the Minister shall ensure that upon receipt of a confirmation mentioned in subsection (2) of this section, the emission allowances and credits specified in the confirmation are transferred.
(4) Subject to subsection 50 (1), if the registered participant to whom the emission allowances and credits would be transferred is an Ontario clearing house, the Minister shall transfer the emission allowances or credits specified in a notice of intent to transfer and a confirmation of intent to transfer if the Minister is satisfied of the following: that the notice and the confirmation were submitted in accordance with the requirements of the corresponding program by an external account representative of the externally authorized participant.
23. (1) Subsection 51.2 (1) of the Regulation is amended by striking out “subsections 51 (1) and 51.1 (3)” in the portion before paragraph 1 and substituting “subsections 51.1 (2) and 51.1.1 (2)”.
(2) Paragraphs 1 and 2 of subsection 51.2 (1) of the Regulation are amended by striking out “holding” wherever it appears.
(3) Subparagraphs 4 i and ii of subsection 51.2 (1) of the Regulation are revoked and the following substituted:
i. the type of allowance or credit: emission allowance, offset credit or early reduction credit,
ii. the vintage year, if any, or, in the case of an offset credit, the year in which it was issued, and
(4) Paragraph 5 of subsection 51.2 (1) of the Regulation is revoked and the following substituted:
5. For each allowance of the same type and vintage year and for each credit of the same type that has the same year in which it was issued, the method used to determine the price to be paid.
(5) Subsection 51.2 (2) of the Regulation is amended by striking out “a clearing house” at the end and substituting “an Ontario clearing house or an external clearing house”.
24. Subparagraphs 4 i and ii of subsection 51.3 (1) of the Regulation are revoked and the following substituted:
i. the type of allowance or credit: emission allowance, offset credit or early reduction credit, and
ii. the vintage year, if any, or, in the case of an offset credit, the year in which it was issued.
25. (1) Paragraphs 1 and 2 of subsection 52 (1) are revoked and the following substituted:
1. A designated account representative of the registered participant must submit to the Minister and to all other designated account representatives of the participant a notice of the participant’s intent to remove emission allowances and credits, setting out the number of emission allowances and credits and a description of the emission allowances and credits to be removed.
2. A second designated account representative of the registered participant must, no later than two days following the submission of the notice of intent under paragraph 1, submit to the Minister and to all other designated account representatives of the participant a confirmation of the participant’s intent to remove the emission allowances and credits specified in the notice.
(2) Subsection 52 (3) of the Regulation is revoked and the following substituted:
(3) Despite the requirement in subsection (1) that steps relating to a request for removal be taken by different designated account representatives of a registered participant, the same individual may take the steps if the registered participant is a market participant that is an individual and has only one designated account representative.
26. (1) Subsection 53 (2) of the Regulation is amended by striking out “Ontario” in the portion before paragraph 1 wherever it appears.
(2) Paragraph 1 of subsection 53 (2) of the Regulation is amended by striking out “Ontario”.
(3) Paragraph 2 of subsection 53 (2) of the Regulation is revoked and the following substituted:
2. The Director shall retire from circulation any offset credits issued by designated jurisdictions and any early reduction credits.
27. Section 53.1 of the Regulation is amended by striking out “a clearing house” at the end and substituting “an Ontario clearing house”.
28. Section 54 of the Regulation is revoked and the following substituted:
Ontario emission allowances created for each year
54. For each year set out in Column 1 of the following Table, the Minister shall create the number of Ontario emission allowances set out opposite the year in Column 2 of the Table:
Table
|
Item |
Column 1 Year |
Column 2 Number of Ontario emission allowances |
|
1. |
2017 |
142,332,000 |
|
2. |
2018 |
136,440,000 |
|
3. |
2019 |
130,556,000 |
|
4. |
2020 |
124,668,000 |
|
5. |
2021 |
121,058,000 |
|
6. |
2022 |
117,438,000 |
|
7. |
2023 |
113,818,000 |
|
8. |
2024 |
110,198,000 |
|
9. |
2025 |
106,578,000 |
|
10. |
2026 |
102,958,000 |
|
11. |
2027 |
99,339,000 |
|
12. |
2028 |
95,719,000 |
|
13. |
2029 |
92,099,000 |
|
14. |
2030 |
88,479,000 |
29. (1) Subsection 58 (1) of the Regulation is revoked and the following substituted:
(1) Each year starting in 2017, the Minister shall submit emission allowances for the purposes of an auction to be held on four separate occasions, each consisting of a single round of bidding.
(2) Subsection 58 (2) of the Regulation is amended by striking out “Ontario” wherever it appears.
(3) Subsection 58 (3) of the Regulation is amended by striking out the portion before clause (a) and substituting the following:
(3) At each auction in an auction year, the Minister shall submit for the purposes of the auction,
. . . . .
(4) Subsection 58 (4) of the Regulation is amended by striking out the portion before paragraph 1 and substituting the following:
(4) If, at the end of an auction, any of the emission allowances that were auctioned remain unsold, the Minister shall reserve them for the purpose of subsequent auctions and may submit them subsequently for the purposes of an auction, subject to the following rules:
. . . . .
(5) Paragraph 1 of subsection 58 (4) of the Regulation is amended by striking out “minimum price” and substituting “auction reserve price”.
(6) Subparagraph 3 ii of subsection 58 (4) of the Regulation is revoked and the following substituted:
ii. have a vintage year that is the auction year.
30. Subsection 59 (3) of the Regulation is amended by adding “Ontario” before “emission allowances”.
31. Paragraph 5 of subsection 60 (1) of the Regulation is revoked and the following substituted:
5. In the case of an auction,
i. for each emission allowance being offered for sale at the auction, the vintage year, if any, of the emission allowance, and
ii. the number of emission allowances with no vintage year being offered for sale at the auction and, for each vintage year identified under subparagraph i, the number of emission allowances being offered with that vintage year.
32. Paragraph 1 of subsection 61 (1) of the Regulation is amended by striking out “Canadian dollars” and substituting “Canadian or US dollars”.
33. (1) Subsection 63 (4) of the Regulation is amended by striking out “Ontario” in the portion before clause (a).
(2) Subsection 63 (6) of the Regulation is revoked and the following substituted:
(6) Despite clause (4) (a), the Minister may transfer emission allowances purchased at an auction to a participant’s compliance account if,
(a) the emission allowances are current vintage emission allowances or allowances with no vintage year; and
(b) the limit in section 40 would not apply under section 41 to the emission allowances once they are transferred to the compliance account.
34. Subsection 66 (2) of the Regulation is amended by striking out “a clearing house” and substituting “an Ontario clearing house”.
35. Subsections 69 (1) to (7) of the Regulation are revoked and the following substituted:
Purchase limits
(1) For the purposes of this section, a registered participant is a member of a purchase group if there is at least one related person in respect of the registered participant and the related person is either another registered participant or an externally authorized participant.
(2) For the purposes of this section,
(a) the other members of a purchase group in which a registered participant is a member are the related persons mentioned in subsection (1); and
(b) participation or lack of participation in an auction does not affect a registered participant’s or an externally authorized participant’s membership in a purchase group.
(3) A registered participant shall comply with the following rules in respect of the purchase of emission allowances available at an auction:
1. A capped participant that is not a member of a purchase group shall not purchase more than 25 per cent of the emission allowances available.
2. A market participant that is not a member of a purchase group shall not purchase more than 4 per cent of the emission allowances available.
3. A registered participant that is a member of a purchase group shall ensure that the purchase limit set out in paragraph 1 is allocated among the members of the purchase group.
4. If the purchase group mentioned in paragraph 3 includes a market participant, the allocation under paragraph 3 must be carried out in such a manner as to ensure the rule set out in paragraph 5 is also complied with.
5. A market participant that is a member of a purchase group shall ensure that the purchase limit set out in paragraph 2 is allocated among all members of the group who meet one of the following descriptions:
i. The member is a market participant.
ii. The member is a participant within the meaning of the Quebec Regulation.
iii. The member is a voluntarily associated entity within the meaning of the California Regulation.
6. No registered participant that is a member of a purchase group shall purchase more than the share of the purchase limit allocated to the participant under this section.
36. (1) Section 70 of the Regulation is amended by striking out “Ontario” wherever it appears.
(2) Subparagraph 3 ii of section 70 of the Regulation is amended by striking out “been classified as having”.
37. Section 71 of the Regulation is revoked and the following substituted:
Auction reserve price
71. (1) The auction reserve price of an emission allowance in an auction is the higher of the minimum price in Ontario for the auction year, the minimum price in Quebec for the auction year and the auction reserve price for the auction year in California after applying the following conversion:
1. If, on the day before the day of the auction, the Bank of Canada provided a Canadian dollar exchange rate for that currency, the currency conversion is calculated at that rate.
2. If paragraph 1 does not apply, the currency conversion is calculated at the Canadian dollar exchange rate for that currency as provided by the Bank of Canada for the date that is before, and is as close as possible to, the day of the auction.
(2) The minimum price in Quebec for the auction year is the last price that was set out in the year before the auction year for that jurisdiction on a website of the government of Quebec.
(3) The auction reserve price for the auction year in California is the last price that was set out in the year before the auction year for that jurisdiction on a website of the California Air Resources Board.
(4) The minimum price in Ontario for 2018 shall be established in accordance with the following formula:
MP2018 = 13.75 × (0.05 + Ir)
where,
MP2018 = Ontario minimum price for 2018,
Ir = the average monthly Consumer Price Index for Ontario for the 12-month period ending on September 30 in 2017, divided by the average monthly Consumer Price Index for Ontario for the 12-month period ending on September 30 in 2016.
(5) The minimum price in Ontario for a year subsequent to 2018 shall be established in accordance with the following formula:
MPt = MPt-1 × (0.05 + Ir)
where,
MPt = Ontario minimum price for year t,
Ir = the average monthly Consumer Price Index for Ontario for the 12-month period ending on September 30 in the year immediately preceding year t, divided by the average monthly Consumer Price Index for Ontario for the 12-month period ending on September 30 in the year that is two years immediately preceding year t.
38. (1) Subsection 75 (1) of the Regulation is amended by striking out “minimum price” and substituting “auction reserve price”.
(2) Subsection 75 (5) of the Regulation is amended by striking out “The Minister shall sell” at the beginning and substituting “The Minister shall distribute”.
39. Section 75.1 of the Regulation is amended by striking out “a clearing house” and substituting “an Ontario clearing house”.
40. Subsection 76 (1) of the Regulation is amended by adding “Ontario” before “emission allowances” in the portion before paragraph 1.
41. (1) Paragraph 2 of subsection 85 (2) of the Regulation is revoked and the following substituted:
2. Subject to subsection (3), the person is registered no later than September 1 as a voluntary participant in respect of the specified GHG activities engaged in at the facility.
(2) Section 85 of the Regulation is amended by adding the following subsection:
(3) The Director may extend the deadline set out in paragraph 2 of subsection (2) to a day no later than October 23 by providing notice in writing to the public in a manner that the Director considers appropriate.
42. (1) Subsection 86 (2) of the Regulation is amended by striking out “September 1” and substituting “September 8”.
(2) Subsection 86 (3) of the Regulation is amended by striking out “Minister” wherever it appears and substituting in each case “Director”.
43. Subsection 88 (2) of the Regulation is amended by striking out “December 12, 2016” at the end and substituting “November 2017”.
44. Subsection 90 (4) of the Regulation is revoked and the following substituted:
(4) For the purpose of applications made in the first year following a compliance period, the Minister shall transfer emission allowances to the applicant’s holding account no later than October 25 in the year the application was made.
45. (1) Clause (e) of section 2 of Schedule 1 to the Regulation is revoked and the following substituted:
(e) the name of all subsidiaries and parent corporations or partnerships associated with the corporation.
(2) Clause 3 (b) of Schedule 1 to the Regulation is amended by striking out “general partner” at the end and substituting “partner and general partner”.
(3) Section 3 of Schedule 1 to the Regulation is amended by striking out “and” at the end of clause (d), by adding “and” at the end of clause (e) and by adding the following clause:
(f) if a partner in a partnership is a corporation, the name of all subsidiaries and parent corporations or partnerships associated with that partner.
(4) Section 5 of Schedule 1 to the Regulation is amended by striking out the portion before clause (a) and substituting the following:
5. If the person has a business relationship with or is a related person in respect of any registered participant or externally authorized participant or who is required to be registered under the Act or is required to be authorized to participate in a corresponding program of a designated jurisdiction,
. . . . .
(5) Clauses 5 (d) and (e) of Schedule 1 to the Regulation are revoked and the following substituted:
(d) a description of the nature of the business relationship or other relationship as related persons, which must include the percentage of shares, securities or other interests of each person held by others and which must be accompanied by a diagram showing the relationship;
(e) the holding account or external account number of the other person; and
(6) Schedule 1 to the Regulation is amended by adding the following section:
6.1 A statement setting out,
(a) whether any account representative of the person is an account representative of any other registered participant or any externally authorized participant; and
(b) the name of each account representative mentioned in clause (a) and the relevant jurisdictions in which the person is designated or authorized.
(7) Sections 8, 9 and 10 of Schedule 1 to the Regulation are amended by striking out “a clearing house” wherever it appears and substituting in each case “an Ontario clearing house”.
Commencement
46. (1) Subject to subsection (2), this Regulation comes into force on the day it is filed.
(2) Section 4 comes into force on the later of January 1, 2018 and the day this Regulation is filed.