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On March 25, 2021 the Supreme Court of Canada (SCC) released its decision References re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11.1 While the question before the Court was the scope of the federal government’s jurisdiction, the practical effect of the decision was describing how climate change prevention could be legislated in Canada. If the SCC had found the federal Greenhouse Gas Pollution Pricing Act (GGPPA) ultra vires, an additional stumbling block would have been raised on the already difficult road towards reducing climate change. Fortunately, the decision made helps pave the way towards a greener future.

Summary of the Greenhouse Gas Pollution Pricing Act Decision

The question of jurisdiction in this matter was quite a specific one, but still crucial in its importance. The SCC was not asked whether the federal government could create legislation to address climate change, but what the contents of such legislation could entail. The federal government must rely on specific constitutional heads of power to stay within its jurisdiction, but the specificity of such heads raises concerns when a regulatory regime is particularly complex, with sections that do not fit within the enumerated heads of power set out in S.91 and S.92(10) of the Constitution Act, 1867.  

The SCC’s ruling was on whether the GGPPA could be upheld through the national concern branch of the federal government’s Peace, Order and Good Government power. Justice Wagner noted that finding a matter fell within the national concern doctrine is permanent, and for this reason raises special concerns about maintaining the constitutional division of powers. The significance and far reaching implications of permitting the federal legislation to fall under this power means that it is not often invoked, and Courts will give such claims careful scrutiny.

In this case, the Supreme Court ruled that the national concern doctrine did apply to the GGPPA for the following reasons:

  • To perform the constitutional analysis, the legislation at issue must first be characterized based on its pith and substance. The SCC found that considering both intrinsic and extrinsic evidence, the pith and substance of the GGPPA were directed towards minimum national standards of GHG price stringency to reduce GHG emissions, as opposed to a broader characterization of simply regulating GHG emissions or establishing national standards to do so.
  • The SCC found that new matters of national concern should be framed in terms of the subject matter of the statute, maintaining the narrow window on permissible federal powers to the matter before it. Issues of regulatory exclusivity and overlap with provincial powers caused by the national concern doctrine should be addressed through the double aspect doctrine, which recognizes that the same fact situations can be regulated from different perspectives.
  • The SCC clarified a three-step approach for identifying matters of national concern. First, a threshold question is asked as to whether the matter is of sufficient concern to Canada as a whole to warrant consideration under the doctrine. Second, the matter “must have a singleness, distinctiveness and indivisibility that clearly distinguishes it from matters of provincial concern”. Third, the federal government must show that the intrusion on provincial autonomy is outweighed by the scale of impact that would occur if it was unable constitutionally address the matter at a national level.
  • In the case of the GGPPA, all three steps were fulfilled. As a threshold question, the SCC recognized carbon pricing as integral to reducing GHG emissions. The GGPPA was distinct from provincial regulation and did not regulate the GHG emissions generally. It was a scheme complementary to provincial regulation and performed a role the provinces acting alone or together would not be able to take on. Finally, while upholding the GGPPA under the national concern doctrine would lead to a previously unidentified area of double aspect in which federal law is paramount, this impact to provincial freedom is minimal, and to find national legislation under this power unconstitutional would lead to irreversible consequences on the environment and human health and safety.  

Effect on climate change litigation

So what is the effect of the highest court in Canada upholding a significant piece of legislation combating climate change? A key takeaway is that while the test for satisfying the national concern test remains stringent, the SCC has presented a clearer roadmap to do so. It is also worthwhile to note that the SCC fully acknowledged the realities of climate change and that it is a global problem requiring international efforts.

Currently there are some major climate change actions winding their way through the Canadian courts and this SCC decision may potentially impact both them and future climate change litigation.

One effect of the decision may be that upholding federal legislation relating to regulating climate change has become slightly easier by virtue that the federal government could craft legislation with the SCC’s direction in mind. The difficulty is that the application of the test has room for interpretation. Provinces may still challenge federal legislation on areas the SCC has left undecided, such as the validity of regulations enacted under the GGPPA. It is also possible that with a clearer test, provinces may be better able to hone their arguments against the national concern doctrine findings in the future.

The second effect of the decision is that it lays groundwork for other climate change cases which argue that the federal and provincial governments are failing to meet their climate change obligations. For example, Mathur, et al. v. Her Majesty the Queen in Right of Ontario2 and La Rose v. Her Majesty the Queen3 argue that these failures violate Section 7 and Section 15 of the Charter.

While the SCC decision is not directly applicable to the above cases, it does have related downstream effects. For example, the plaintiffs in Mathur brought claims against the Ontario government after its repeal of the Cap and Trade program. In the Ontario Superior Court’s decision dismissing Ontario’s motion to strike, it cited the Ontario Court of Appeal decision in Reference re Greenhouse Gas Pollution Pricing Act, 2019 ONCA 544 acknowledging the realities of climate change. The plaintiffs in Mathur will be required to establish the harm caused by GHGs, which is aided by the SCC’s positive findings in this case.

Likewise, the case of La Rose was dismissed for lack of justiciability, as the Federal Court found that the plaintiffs were challenging Canada’s “overall approach to climate change policy”. However, with this new decision upholding the GGPPA as constitutional, new claims attaching specifically to the GGPPA may be possible, keeping the GGPPA accountable to its goals and stated purpose.

Gigi Pao practices with the Siskinds Class Action department. If you have questions about the information contained within this article, please write to [email protected] or call 226.636.1615.

[1] References re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11

[2] Mathur v. Ontario, 2020 ONSC 6918 (“Mathur”) aff’d 2021 ONSC 1624

[3] La Rose v. Canada, 2020 FC 1008 (“La Rose”)

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