On May 3, 2019 Saskatchewan’s Court of Appeal ruled that the carbon tax imposed on the Province by the federal government is constitutional and valid.
The federal government argued that climate change is a matter of national concern that cannot be addressed by the provinces acting on their own initiative. The federal government took the position that it should be able to use the Peace, Order and Good Government (“POGG”) provisions to establish a minimum price for carbon emissions.
Saskatchewan argued that the federal government, through the implementation of a minimum price on carbon tax on some provinces and not others, is intruding on provincial jurisdiction. The Province also argued that the federal charge is a tax and not a regulatory charge. The basis of Saskatchewan’s argument was that the GGPP Act is unconstitutional on the basis that it relates to property and civil rights and other matters considered to be of a purely local nature and therefore falls exclusively within the jurisdiction of the province.
The Court of Appeal’s decision was not unanimous, three judges confirmed that the carbon tax was constitutional while two judges found that the carbon tax was unconstitutional. The majority of the Court of Appeal held that in establishing a minimum national standard for a price on greenhouse gas emissions the federal government was acting entirely within its jurisdiction.
The two dissenting judges however found that Part 1 of The GGPP Act that imposes a charge on greenhouse gas producing fuels and waste is invalid and represents an unconstitutional use of federal powers.
The federal government’s carbon price starts at a minimum of $20 per tonne and is set to rise $10 per tonne annually until 2022 when it reaches $50 per tonne.
The province of Saskatchewan introduced its own carbon plan, referred to as the Prairie Resilience. This plan however did not place a price on carbon. The Prairie Resilience climate change strategy was released in December 2017 by the province and outlined a series of commitments designed to make Saskatchewan more resilient to the climate, economic and policy impacts of climate change. Saskatchewan developed output-based performance standards that applied to more than 40 Saskatchewan industrial facilities. The facilities subject to the Prairie Resilience generated 11 percent (approximately 8.5 million tonnes) of Saskatchewan’s total emissions.
Saskatchewan Premier Scott Moe indicated that the province intends to appeal the Court of Appeal’s decision on the federal carbon tax to the Supreme Court of Canada.
Alberta Premier Jason Kenney indicated that Alberta will join Saskatchewan in appealing the Court of Appeal’s decision. The Alberta Premier stated: “We disagree with the narrow ruling by the majority that the federal government has the power to ensure a provincial minimum price on carbon.”
In commenting on the Saskatchewan’s Court of Appeal’s decision upholding the federal government’s plan, the federal Minister of Environment and Climate Change stated:
“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.”
The federal carbon tax continues to face a similar challenge in the Ontario courts.