1. Close the carbon tax loophole
A carbon tax is a market-based tool to reduce carbon dioxide (CO2) emissions, which contribute to climate change. By making it more expensive to emit carbon, policymakers hope that people and businesses will move toward low-carbon alternatives. Canada took a bold step in the right direction by creating a federal carbon tax, and Ontario in turn adopted a slightly modified version of it.
But Ontario’s carbon tax has a major loophole: fossil gas plants, which are the only significant emitters on the grid, are almost entirely exempt.
Gas plants are taxed above a certain emissions threshold, but the threshold is so high that 90% of emissions get a free pass.
To be specific, gas plants emit around 400 grams of CO2 per kilowatt-hour (gCO2/kWh). Yet only emissions over 370 gCO2/kWh will be taxed as part of Ontario's "Emission Performance Standards" program. This means gas plants pay the carbon tax on just 30 gCO2/kWh, less than 10% of their actual emissions.
Because Ontario’s carbon tax puts no real penalty on burning fossil gas, it fails to incentivize clean energy alternatives.
In fact, it encourages us to replace our low-carbon nuclear plants with polluting, imported, fracked fossil gas.
We call for a carbon tax on all gas plant emissions, not just 10% of them. This means lowering Ontario's carbon tax threshold (known as the performance standard) for new and existing electricity generation sources from 370 gCO2/kWh to zero by 2030.
90% of gas plant emissions go untaxed
Currently, the carbon tax gives little incentive to protect low-carbon power sources
2. Rebuild Pickering
Nuclear power in Ontario is made possible by CANDU technology with a supply chain that is almost totally within the province. Nuclear power not only sustains tens of thousands of jobs in Ontario, but it provided 90% of the electricity needed to kick coal off the grid in the early 2000s.
If Pickering closes as planned in 2024-2025, it will be the largest loss of low-carbon power in Canada’s history.
Let there be no mistake: gas plants, not hydropower or renewables, will replace the bulk of the lost output from Pickering. To prepare for Pickering's closure, Ontario Power Generation (OPG) has invested $2.8 billion in gas plants, and Ontario has around 10 gigawatts (GW) of gas capacity sitting mostly idle that can be called upon to fill the gap.
The government's plan is to replace Pickering's low-carbon output with high-carbon fossil gas — the same gas that is practically exempt from the carbon tax. This will raise emissions, lead to the loss of thousands of unionized jobs, and jeopardize Ontario's power supply at a time of rising electricity demand due to electrification goals.
We call for the rebuilding of Pickering Nuclear Generating Station or concrete plans to fully replace its 3100 MW of lost capacity with new made-in-Canada nuclear power.
Pickering Nuclear Generating Station, photo by John McArthur
Gas is set to replace the emission-free power from Pickering
How are these two goals related?
Lowering our carbon emissions is vital for our future. When we have the opportunity to keep emissions low while saving thousands of jobs and our energy independence, doing so is a no-brainer.
But if the government continues to protect gas plants and neglect nuclear, we will sacrifice jobs, throw away our energy security, and raise our emissions to pre-coal phaseout levels.
The gas burned to replace Pickering's yearly output of 21,000 gigawatt-hours will result in almost 10 megatonnes of CO2 emissions every year. This will more than double the carbon footprint of Ontario's electricity sector and immediately raise Canada's overall emissions by a minimum of 1%. This is a huge step in the opposite direction of Canada's commitment under the Paris Agreement to reduce greenhouse gas emissions by 40% from 2005 levels.
A proper carbon tax could in fact make Pickering's refurbishment more economical. If the real cost of carbon emissions were reflected by a proper carbon tax covering all gas plant emissions, the amount paid would total $514 million per year.
In under 20 years, this would exceed the $8.6 billion estimated for Pickering's refurbishment.
And money spent on nuclear is money well spent. Pickering alone provides nearly 7,600 direct and indirect jobs in Ontario, many of them highly skilled. And with 95% of the supply chain in Ontario, nearly every dollar spent on nuclear stays in the province, sustaining economic opportunity as we recover from the impacts of the COVID-19 pandemic.
In contrast, money spent on gas is money drained from the province, with 65% of Ontario's fracked gas being imported from the United States.
Wouldn't the cheapest option be to replace nuclear with gas and keep the carbon tax as it is?
In terms of money spent on electricity in the short term, yes. In terms of local jobs and economic activity, no. In terms of energy security and independence, no. In terms of the long-term costs of carbon emissions and climate change, no.
We want to preserve our low-carbon power, and we want carbon emissions to bear their real cost to society. Business as usual is the way to a worse Ontario — one where basic needs such as jobs and clean, reliable power are ignored, and imported fossil gas gets a free pass.
Can't we replace Pickering with renewables?
We support all low-carbon energy sources proven to displace fossil fuels, as nuclear has in Ontario and elsewhere. It is currently infeasible to replace a source of electricity that runs 24/7, like nuclear, with those that run intermittently and with large seasonal variations, like wind and solar.
Ontario is fortunate to have hydropower, but we have no realistic ability to expand Ontario's dams nor import more hydropower from Quebec year-round. Already, Ontario must sometimes export power to Quebec during times of high demand.
As we push to electrify our economy, we will require doubling or tripling our reliable sources of electricity. This means keeping nuclear power.
All new renewables should displace the fossil gas that continues to emit carbon and pollute Ontario's air, rather than run in place trying to make up for the senseless abandonment of 3.1 gigawatts of emission-free power from Pickering.
It's nuclear or gas, you Pickering.