On 1 January 2018, Ontario linked up to the California and Québec cap-and-trade programs, forming the third largest carbon market in the world following China and the European Union. This is in line with the linking agreement that was signed by all three parties on 22 September 2017. Under a linked program, allowances from any of the jurisdictions can be used interchangeably for compliance. Allowances for all three jurisdictions will also be auctioned jointly with the first one scheduled for 21 February 2018.

Québec had launched its cap-and-trade program in 2012 with California following a year later. Both programs have been linked since 1 January 2014. Ontario’s cap-and-trade program became operational at the beginning of 2017.

All three jurisdictions are part of the Western Climate Initiative (WCI) and had designed their programs to closely resemble one another, following the WCI design recommendations.