Canada’s Ontario province released a discussion paper on its climate policy on Thursday, asking for input on how to best drive emission cuts, including setting a price on carbon.

Over the next 45 days, the Ministry for the Environment and Climate Change will hold a series of public meetings and arrange other ways for the public to comment.

“We will address Ontario’s needs for a low-carbon economic transition and explore the use of market based instruments to make that possible,” the discussion paper said.

It listed cap-and-trade, baseline and credit, and a tax as potential options, and said the provincial government will announce this spring which pricing mechanism it will use.

Last week, Ontario Finance Minister Charles Sousa said his spring budget is unlikely to contain a carbon tax.

“There is no such thing. There is no discussion at this point in regards to what you’re asking about,” Sousa told reporters, according to local media.

“I don’t want to speculate about what may or may not be in the budget, but it’s important for us to look into the future,” he added, not ruling out some other form of carbon pricing.

Neighbouring Quebec operates an emissions trading scheme together with California. Alberta has had a baseline and credit scheme in place since 2007, while British Columbia has opted for a carbon tax.

“We hope that Ontario strongly considers the use of flexible market-based instruments, while leveraging the model and lessons from Québec and California’s linked cap-and-trade program,” Katie Sullivan, director of North America at the International Emissions Trading Association, said.

“Ontario could have an important and exciting role to play in joining sub-national climate leadership across the continent through a linked emissions trading program.”

Ontario emits 166 million tonnes of CO2 equivalent per year, with transport (57 mt), industry (50 mt) and buildings (29 mt) as the biggest-emitting sectors.

The government aims to cut emissions to 15 percent below 1990 levels by 2020, and 80 percent by 2050. Current emissions are down just over 10 percent from 1990, but are still increasing in some sectors, especially transport.

By Stian Reklev – stian@carbon-pulse.com