Saskatchewan Premier Scott Moe said the province will appeal a decision to the Supreme Court of Canada.
In a 3-2 decision, the court said the carbon tax falls within the legislative authority of Parliament.
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Chief Justice Robert Richards wrote in the 155-page decision that establishing minimum national standards for a price on greenhouse gas emissions falls under federal jurisdiction.
He wrote Ottawa has the power to impose its carbon tax under a section of the Constitution that states Parliament can pass laws in the name of peace, order and good government.
Two of the five Appeal Court justices differed in their opinion and ruled the federal government’s actions are not a valid use of that section of the Constitution.
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Moe said he is disappointed with Friday’s ruling.
“Though I am disappointed by today’s ruling, our fight will continue on behalf of Saskatchewan people – who oppose the ineffective, job-killing Trudeau carbon tax,” he said on Twitter.
“It was a 3-2 split decision and we look to appeal to the Supreme Court of Canada.”
Federal Environment Minister Catherine McKenna called the decision a win for Canadians.
“It confirms that putting a price on carbon pollution and returning the revenues to Canadians through the Climate Action Incentive rebate is not only constitutional, it is an effective and essential part of any serious response to the global challenge of climate change,” McKenna said in a statement.
“The court also recognized, as do most Canadians, that climate change is man-made and one of the great existential issues of our time.”
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Moe is expected to respond to the decision at 1 p.m. CT.
The court heard arguments from the Saskatchewan and federal governments, along with dozens of intervenors, on Feb. 13 ad 14.
Saskatchewan’s argument centred on the claim the federal government is intruding on provincial jurisdiction by applying a carbon tax in certain jurisdictions and not others. In addition, the province argued the federal price is, in fact, a tax and not a regulatory charge as described by Ottawa.
On the federal side, the argument centred on climate change being a matter of national concern that no province can address by itself. This is why they should be able to use the constitutional power of Peace, Order and Good Government (POGG) to step into provincial territory and institute a minimum emission price.
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The reasoning is that emissions do not abide by provincial borders and a failure to reduce pollution in one province will adversely affect others.
On Thursday, Saskatchewan’s Justice Minister and Attorney General Don Morgan said a federal win could have unintended consequences of greatly expanding POGG powers.
The federal carbon tax on fuel was applied to Saskatchewan, Ontario, New Brunswick and Manitoba on April 1 as those province’s climate plans did not meet the federal backstop, $20 per tonne of CO2, growing to $50 per tonne in 2022.
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Ontario’s Court of Appeal is also considering a decision on the constitutionality of the federal carbon tax. That case was heard in mid-April.
New Alberta Premier Jason Kenney said he will repeal that province’s carbon tax and also launch a challenge the federal policy in court.
– With files from The Canadian Press