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Canada’s carbon price is constitutional, Supreme Court rules

Click to play video: 'Supreme Court of Canada rules on the constitutionality of the federal carbon tax' Supreme Court of Canada rules on the constitutionality of the federal carbon tax
University of Calgary law Professor Sharon Mascher joins Global News Morning Calgary for reaction to the Supreme Court of Canada’s ruling on the constitutionality of the federal carbon tax. – Mar 25, 2021

The Supreme Court of Canada on Thursday has given the federal government the constitutional green light to impose a carbon price on the provinces.

The decision was the culmination of years of disputes between some provinces and the federal government over the Greenhouse Gas Pollution Pricing Act (GGPPA). The law, which was introduced in 2018, laid out a national framework for pricing carbon – one that applies to everyday consumers as well as industrial emitters.

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In a split decision, the judges on the Supreme Court of Canada (SCC) found that climate change poses a real, serious threat to the world — one that’s serious enough to allow the federal government to step on some provincial toes.

“The (Greenhouse Gas Pollution Pricing Act) is constitutional,” Chief Justice Richard Wagner wrote in the decision.

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“Although this restriction may interfere with a province’s preferred balance between economic and environmental considerations, it is necessary to consider the interests that would be harmed — owing to irreversible consequences for the environment, for human health and safety, and for the economy — if Parliament were unable to constitutionally address the matter at a national level.”

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The act details a minimum set of standards for pricing carbon, leaving provinces free to establish their own policies beyond that initial threshold. However, if those provincial policies don’t meet the standards set out in the federal law, Ottawa slaps its federal carbon tax on the province.

This is known as the “backstop.”

Multiple provinces have balked at the prospect of the federal government imposing this backstop, claiming that such a move would trample on their provincial jurisdiction. That’s exactly the issue that Alberta, Ontario and Saskatchewan had front of mind as they brought the question of constitutionality before their appeal courts.

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The provinces said the debate isn’t about climate change – as they all believe in the threat posed by global warming – but rather comes down to the idea that a federally imposed carbon tax would curtail their control over an issue they say should be kept closer to home.

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But as those appeal court rulings came down, the three cases didn’t have the same result – despite the fact that they covered the same topic. In Ontario and Saskatchewan, the courts upheld the constitutionality of the law. However, Alberta’s court ruled against the federal backstop.

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In their decision, Alberta’s appeal court called the carbon price a “constitutional Trojan horse.” They suggested Ottawa could regulate whatever it wanted as a result of this law, because so many aspects of the economy produce emissions.

Alberta’s court claimed that if the law wasn’t struck down, Ottawa could someday force Albertans to heat their homes to certain temperatures, or even ban gas-powered cars. While both suggestions have never seen the light of day within the government’s proposed policies, the chief concern Alberta’s court had lay with the power afforded by the law – that if the government wanted to do either, theoretically, it could.

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British Columbia rejected that idea, intervening in the case and thrusting it up to the Supreme Court level. As the debate raged on, other provinces decided they wanted their voices heard on the issue too: Quebec, Manitoba and New Brunswick all intervened as opponents of the federal law.

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Now the Supreme Court has also rejected the idea, noting that if provinces were to fail to address their GHG emissions, it would have an impact beyond their borders.

“A province’s failure to act or refusal to cooperate would in this case have grave consequences for extraprovincial interests,” Wagner wrote in the decision.

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Underpinning this decision was the government’s invocation of the peace, order and good government clause (POGG) of the Constitution.

POGG gives the federal government room to bring about legislation that might step on the provinces’ jurisdictional toes. The federal government gets that wiggle room if it can prove the issue at hand inherently affects the whole country – but isn’t explicitly mentioned in the Constitution.

Wagner made the rare decision on Thursday that the decision is of sufficient national concern that the government can use the POGG clause — a decision that six judges were entirely in favour of, with one partial dissent and two entirely in disagreement with the majority.

The court also noted that the price on carbon, often referred to by its detractors as a “carbon tax,” isn’t actually a tax in the constitutional sense.

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“They cannot be characterized as taxes; rather, they are regulatory charges whose purpose is to advance the GGPPA’s regulatory purpose by altering behaviour,” Wagner wrote.

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Now, with the news that the bid to quash the carbon tax has failed, the opposing provinces have been sent back to the drawing board.

Given their track record of vocal opposition to the carbon price, however, it’s unlikely they’ll go quietly into the night.

Saskatchewan Premier Scott Moe has already taken to Twitter to react to the decision, saying it “does not change” his province’s “core conviction” that the federal carbon price is “bad environmental policy, bad economic policy, and simply wrong.”

“Our government will continue to make every effort to protect Saskatchewan families, workers and businesses from the negative impacts of the carbon tax,” Moe wrote in a statement accompanying his tweet.

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Alberta Premier Jason Kenney also expressed his dismay at the decision during a Thursday press conference.

“We are obviously disappointed with that decision,” he said.

“The Supreme Court ignored the Alberta Court of Appeal’s warning and discovered a new federal power that erodes provincial jurisdiction and undermines our constitutional federal system. We’ll take time to study that decision in detail.”

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Conservative Leader Erin O’Toole said his party, should they form government, still plans to repeal the carbon pricing plan, despite the SCC ruling.

“Canada’s Conservatives will repeal Justin Trudeau’s Carbon Tax,” O’Toole said in a statement.

“The Supreme Court highlighted the risk of carbon leakage between provinces. The same risk of leakage of jobs and investment exists between Canada and the United States.”

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At least one politician, however, is taking a victory lap Thursday.

In a statement issued immediately after the decision was released on Thursday, Environment Minister Jonathan Wilkinson called the ruling “a win for the millions of Canadians who believe we must build a prosperous economy that fights climate change.”

“Today, the Supreme Court reaffirmed that climate change impacts Canadians no matter where they live in the country,” he wrote, “and that the federal government can continue to ensure pollution isn’t free as one part of its comprehensive climate plan.”

He reiterated the message in a press conference shortly afterwards, stating that the government can now “get on with the job” of addressing climate change.

“I don’t want to be overly partisan today but I will say this. There should be no debate in this country on whether climate change is real.”

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