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The Ontario government is setting aside an additional $8 million to support oil and natural gas industry projects as it steps up to meet a federal requirement to get up to $9-billion in new taxes from the energy sector.

Ontario Finance Minister Charles Sousa announced Wednesday the government would provide an additional injection of $7.4 billion to help finance projects including an oil spill mitigation fund, a marine oil spill cleanup fund, an oil and energy storage project and a marine fuel storage project.

The province’s $9.4-billion Oil and Gas Act requires that the government must get a tax increase to offset the increased costs of the tax changes.

“This is an important first step to ensure Ontario remains on the forefront of reducing greenhouse gas emissions,” said Sousas spokesperson Stephanie Macdonald.

“Ontario is the only province in Canada that does not pay its fair share of taxes to the federal government.”

Under the Oil and Natural Gas Act, which has been in place since 2010, the government pays the full costs of energy projects, such as infrastructure projects and environmental mitigation projects.

It has also contributed to an estimated $15-billion increase in federal taxes over the last decade.

The Liberal government’s announcement comes as the province is grappling with its biggest energy crisis in years.

On Monday, the province announced it would be cutting its fuel tax from 20 per cent to 17 per cent from June 1.

The move comes after Premier Kathleen Wynne announced last week that she was going to announce her cabinet’s response to the crisis and would hold a public meeting next week to discuss a federal climate change plan.

“The government is committed to helping ensure Ontario’s economy and environment are protected as we address climate change,” said Macdonald, who said the money will go to infrastructure projects that will benefit residents.

“I am confident that the $7 million that we will receive from the government will provide us with the tools we need to do that.”

The announcement comes after the Liberals announced last month they will ask the provinces to approve $7 billion in new revenues over three years to help reduce carbon emissions.

The federal government is currently asking for an additional 4.7 per cent increase in tax rates.

“We are going to do the right thing by the economy and the environment,” said Liberal Leader Kathleen Wynne.

“These new revenues are going toward climate change mitigation and the funding will help ensure that Ontarians have the flexibility to take steps to mitigate climate change.”

The Liberals have said they plan to introduce a carbon tax in 2018 and a cap-and-trade plan in 2019, but are now also looking at ways to offset those taxes.


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