Emissions are pictured coming out of the chimneys of the Portlands Energy Centre in Toronto, on Tuesday, January 19, 2016. On that day, the final cap-and-trade auction took place before the Ontario market was conbined with the carbon markets in Quebec and California. THE CANADIAN PRESS/Chris Young

TORONTO — The Ford government tabled its bill Wednesday to repeal Ontario’s price on carbon, setting up a fight that could trigger a federally imposed carbon tax.

The province says it estimates it will only have to reimburse companies for $5 million of the $2.87 billion they have already paid into provincial coffers.

“It’s a punishing, regressive tax that forces low and middle income families to pay more. It’s a job killing tax that would impose massive new costs on businesses and cripple our economy at a time of economic sensitivity,” Environment Minister Rod Phillips said about the cap-and-trade program.

[READ MORE: Ottawa to impose Ontario carbon tax when Ford scraps cap-and-trade]

Premier Doug Ford campaigned on ending the program with the goal of reducing energy and gas prices for consumers and businesses. He’s announced the legislature will sit for another two to three weeks, but didn’t say whether the new bill will be passed in that time.

At a technical briefing not for attribution, the government said the move will save the average household $260 in 2019, but if a federal carbon tax applied, it would wipe out those savings and increase the costs to consumers in subsequent years.

Brought into force in January, the cap-and-trade market with California and Quebec was first announced in 2015. In Ontario, electricity importers and fuel suppliers are among the companies that were required to take part in the system.

The agreement allows for any jurisdiction to pull out of the market, but it sets limits on when. Specifically it says Ontario is expected to give California and Quebec 12 months notice if it wants to bail on the shared carbon market. Phillips said there is a separate agreement that allows a jurisdiction to give only 30 days notice.

The Tories said their legislation was drafted with the goal to quickly lower energy costs and minimize the impact to taxpayers of any compensation to companies.

Phillips said allowances given for free to companies will not be compensated, nor will companies that bought allowances to be in compliance with the emissions caps up until July 3. The Cap and Trade Cancellation Act also doesn’t require the government to reimburse companies that were speculating in the market or bought allowances for the next compliance cycle after 2020.

“For people who speculated in the market we don’t believe that we owe them compensation,” Phillips said. “If people were choosing to purchase credits in the interest of making a profit that’s speculation and from our perspective, when we’re protecting the taxpayers’ dollars, those are the people we choose to compensate.”

[READ MORE: Abrupt scrapping of cap-and-trade in Ontario sparking anxiety for businesses]

According to Phillips, the only companies that will be reimbursed for allowances are those that bought more than were needed, or those that weren’t able to pass on the costs of them to customers. He said the total cost to taxpayers for unwinding cap-and-trade will be “up to $5 million.”

Industry groups that have spoken with iPolitics said their members expected to be compensated for the allowances that have already been bought. So far though, Phillips said the response he’s received from the business community has been “quite positive.”

The NDP are accusing the government of introducing an unconstitutional bill because it stops companies from suing the government over the changes. However, Phillips said government lawyers have advised him the bill would stand up to a constitutional test.

He also said he wasn’t expecting companies in California to launch complaints at the World Trade Organization because the plan his government set up is “fair.”

Ottawa’s carbon tax will cost Ontarians more than cap-and-trade

Provincial bureaucrats confirmed in the technical briefing that the federal back-up plan for any province that doesn’t have a carbon price by January 2019 will cost consumers more than the cap-and-trade program the Tories are axing.

Phillips reconfirmed his government’s plan to join Saskatchewan in challenging any carbon tax imposed by the feds in court. That battle is budgeted to cost the province $30 million.

“We are very confident in our position. We’re certainly confident in our legal position, but we’re also confident in our position vis-a-vis the people of Ontario,” Phillips said. “We received a clear mandate to get rid of the Kathleen Wynne’s cap-and-trade program and I don’t think there’s any more enthusiasm out there than there was for that with the Trudeau carbon tax”

But Green Party Leader Mike Schreiner is calling the pending court case a “frivolous lawsuit that is doomed to fail.”

NDP MPP Peter Tabuns said the higher costs that will come with the federal replacement will be a “problem for a lot of people.”

Ontario will set new emissions reduction targets

Repealing the Climate Change Mitigation and Low-carbon Economy Act also means the Tories are scrapping the emissions targets Ontario needed to meet the goals in the Paris Climate Agreement.

The new bill requires the government to set new targets, but it doesn’t put a timeline on that commitment and it doesn’t say whether they will still be high enough to meet Canada’s international commitments.

Phillips said the requirement for new targets shows his government will have a “plan” to tackle climate change which he called a “very important issue.”

He wouldn’t say what tools the government was considering now that it has written off a carbon price to lower emissions.

Greenpeace released a statement Wednesday afternoon saying the province’s moves meant “Ontarians will pay twice.”

“First as we miss out on the jobs that come with the growing clean energy industry and secondly as we clean up after the ever more extreme weather that damages crops, homes and businesses,” the statement from Keith Stewart at Greenpeace Canada said.

Environmental Defence is urging Ford’s government to “support Ontario’s current science-based pollution reduction targets.”

Programs director Keith Brooks said those targets need to be “nearly carbon neutral by mid-century, which is what is required if we hope to limit global warming to 1.5 degrees, as agreed to by 195 countries in Paris.”

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