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On August 28, 2019 the Minister of Environment, Conservation and Parks announced Ontario’s appeal of the Court of Appeal’s decision on the constitutionality of the federal Greenhouse Gas Pollution Pricing Act to the Supreme Court of Canada.

In making the announcement the Minister stated:

“In June, we were disappointed to learn that in a split decision, the Ontario Court of Appeal did not accept our position that the federal carbon tax is unconstitutional. Despite this decision, we remain committed to using every tool at our disposal to fight against the job-killing carbon tax, which is making life more expensive for Ontario’s hardworking individuals, families and businesses. That is why we filed our appeal of the decision on the carbon tax to the Supreme Court of Canada today.”

On June 28, 2019, Ontario’s Court of Appeal found that the Federal Government’s Carbon scheme is constitutional, “regulatory in nature”, and “not a tax.” The Honourable Strathy, Chief Justice of Ontario, wrote that the Act[1] “is within Parliament’s jurisdiction to legislate in relation to matters of ‘national concern’ under the ‘Peace, Order, and good Government’ (‘POGG’) clause of s. 91 of the Constitution Act, 1867” (para 3).

In making its determination the Court of Appeal noted “With the longest coastline in the world, high altitude areas where warming is amplified, and significant Arctic territory, Canada has been disproportionately impacted by global warming. In the Canadian Arctic, for instance, the rate of warming has been even higher than in southern parts of Canada, estimated at three times the global rate.” (para 10).

The Ontario Court of Appeal reasoned that Canada would be heavily impacted by climate change according to uncontested evidence. The minimum national standards to reduce greenhouse gas emissions, was established through a Pan-Canadian commitment to address the impact of climate change. Finally, these Pan-Canadian efforts would be undermined if one or several province(s) did not participate.

Four provinces – Manitoba, Saskatchewan, Ontario and New Brunswick – have refused the federal government’s requirement that the provinces enact their own type of carbon levy – either carbon tax or a cap and trade program. As result of failing to impose a carbon levy the federal government imposed its own “carbon” tax in these provinces. 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 Ontario government is taking the position that the imposed federal carbon pricing regime is a violation of the Constitution on the basis that the federal government is encroaching on provincial jurisdiction.

On May 30, 2019 Alberta ended its carbon tax regime that was implemented in January 2017. The repeal placed Alberta being subject to the federal backstop carbon pricing regime that is in effect in Ontario, Manitoba, Saskatchewan, and New Brunswick.

What remains unclear with the repeal of Alberta’s legislation is what will happen to the numerous projects funded by the carbon tax

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 issue considered by the Court of Appeal was whether the federal government’s Greenhouse Gas Pollution Pricing Act (“GGPP Act”), is unconstitutional in whole or in part?

The Saskatchewan 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 federal government’s Greenhouse Gas Pollution Pricing Act (“GGPP Act”) that imposes a charge on greenhouse gas producing fuels and waste is invalid and represents an unconstitutional use of federal powers.

The province of Saskatchewan introduced its own carbon plan, referred to as the Prairie Resilience that failed to place a price on carbon.

Both Alberta and Saskatchewan appealed 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 ability of the federal government to impose a carbon tax will now be subject to review by the Supreme Court of Canada.

[1] Being the Greenhouse Gas Pollution Pricing Act, Part 5 of the Budget Implementation Act, 2018, No.1, S.C. 2018, c. 12.

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