Ontario now has a carbon tax on industry. What will Doug Ford's government do with the revenue?

Premier Doug Ford's government expects to bring in more than $2 billion through a carbon tax on industrial emitters over the next eight years, CBC News has learned. 

The Ontario government hasn't said yet what it will do with the revenue. That's got everyone from corporate lobbyists to environmental groups calling on the province to clarify its plans for this new source of income.

Ontario is poised to start collecting what it calls "compliance payments" from the biggest industrial producers of greenhouse gas emissions, including auto manufacturers, steel mills, cement makers, chemical plants and oil refineries. 

This marks the transition from the federal program for industrial carbon pricing that's been in place since 2019, imposed by Ottawa when the Ford government scrapped Ontario's cap-and-trade system.

Previously unpublished figures that the provincial government provided to CBC News show Ontario forecasts it will collect $131 million in compliance payments from industry in 2023, with the annual total estimated to hit $446 million in 2030. 

The question now: how will the Ford government spend that money?

"We are developing an approach for the use of proceeds collected under the program," said Gary Wheeler, a spokesperson for Ontario's Ministry of the Environment, Conservation and Parks, in an email to CBC News. 

There's no shortage of advice for the government on what that approach should be. 

Dennis Darby, president and CEO of Canadian Manufacturers and Exporters, says the government should put the money back into the industries that pay the fees in ways that help them reduce their greenhouse gas (GHG) emissions. 

"I think Ontario's got a great opportunity," said Darby in an interview. "If they do it right, this can be net beneficial to industry, but also of course net beneficial to the environment." 

For industries to decarbonize, Darby says governments need not only to show them the stick of carbon pricing but also the carrot of funding for technologies that reduce emissions. 

"I think we have an opportunity right now to do this in a way that will ultimately lead to the outcome we want, which is helping companies improve their GHG performance," he said. 

Ford and his government have been opposed to all forms of carbon pricing since taking office in 2018. But the Supreme Court of Canada upheld the federal carbon pricing law, so the provinces face a choice: either put a price on emissions (and collect the revenue) or Ottawa imposes a carbon price anyway (and the feds get to collect the revenue).

The latter is what happens with the carbon tax that's drawn the most public attention: on fuel at the pumps. The Trudeau government has collected that revenue in Ontario, Alberta, Saskatchewan and Manitoba, handing it back to taxpayers in those provinces through income tax rebates.