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Ontario's new premier vows to scrap cap-and-trade scheme with Quebec, California

Doug Ford, who was elected premier of Ontario June 7, has vowed to scrap the province's participation in a cap-and-trade emissions program as his first act of office.

Ford, who has yet to form a new government in Canada's most-populous province and has not taken office, said he has given officials "clear direction to immediately withdraw Ontario from future auctions for cap-and-trade credits" conducted by the Western Climate Initiative, which runs the program for Ontario, Quebec and California. He told a press conference in Ontario that the cap-and-trade program, along with an accompanying carbon emissions levy, would be gone by the end of June. Ford claimed scrapping the program will significantly reduce gasoline prices in the province.

"Upon the swearing in of our new cabinet, at the top of our agenda, the very first item will be to pass an order to cancel the Liberal cap-and-trade carbon tax," Ford said at the June 15 conference. "As of June 29, the cap-and-trade, the carbon tax, they're gone, they're done and this will mean relief at the pumps — the first steps to reducing gas prices by 10 [Canadian] cents per liter."

Ontario has reaped almost C$3 billion in revenue from the sale of emissions credits under the Western Climate Initiative. The province became an official member of the organization in September 2017. The most recent auction was in May. Ford said his government would create rules for an "orderly wind-down" of the province's participation in the program.

The province will also challenge a threatened federal tax on emissions. Canada's government plans to levy a federal tax on provinces that do not have emissions taxes of their own. Saskatchewan, and now Ontario, plan to challenge the constitutionality of the law.

"We will officially challenge the federal government's carbon tax on Ontario families," Ford said. "The cap-and-trade and carbon tax does nothing for the environment. All it does is hurt small businesses and hurt families."

Reducing gasoline prices was a key issue in Ford's campaign to lead the province. The (Toronto) Star newspaper reported that Ford said, "The gas companies, I'm putting you on notice. You aren't going to be playing these games out of the blue." Ford was referring to the practice of gasoline sellers boosting prices before busy weekends. Canada's gasoline market is dominated by Exxon Mobil Corp.'s Canadian subsidiaries, Royal Dutch Shell PLC and Suncor Energy Inc. Gasoline prices across Canada averaged US$5.01 per gallon as of June 15, compared with a U.S. average of US$2.90/gallon, according to data compiled by Gasbuddy.com. Regular gasoline in Toronto was selling for about C$5.02/gallon that day.