Canadian Supreme Court Rules in Favour of Federal Carbon Tax

Steph Q.
26.03.21 10:53 AM Comment(s)

Ontario, Alberta, and Saskatchewan have been informed -  the Federal Carbon Tax is constitutional.  The Court ruled that putting a nation-wide price on pollution is within Ottawa’s authority.

The recent 6-3 split decision by the Supreme Court of Canada stymies the efforts of three provinces who considered the law unconstitutional. The majority of justices determined the specific focus of the legislation gave enough latitude for provinces to create their own legislation to respond to the reduction of greenhouse gas emissions.

Chief Justice Wagner disagreed with the argument put forth by the provinces, stating the law did not regulate all industrial activity, rather it was meant to cope with “the profound nationwide harm associated with a purely intraprovincial approach to regulating GHG emissions.”

The Supreme Court considered the national effect of greenhouse gas (GHG) emissions and how much leeway the Act gave each jurisdiction to develop with their own legislation and policies to reduce GHGs. Justices found that the Federal and Provincial division of powers was not impacted in such a way to rule in favour of the provinces.

The Greenhouse Gas Pollution Pricing Act was created to implement a country-wide standard for pricing GHG Emissions. Provinces have the option to create their own minimum standard, but the Federal legislation is applied if a province doesn’t meet the minimum requirements outlined in the Act. A Federal Carbon Tax is initiated, and revenue generated is given back to consumers in the form of a rebate. Jurisdictions must meet the Federal outcome-based targets, but they have the freedom to create any system to do so.

Because there is no Federal interference in the way each jurisdiction regulates them, Parliament was within its constitutional right to create a Statute that provides a clear minimum for carbon pricing.

The logic behind the decision is that Canada as a country is impacted negatively if a single province declines to price GHG Emissions. The National Concern Doctrine allows the Federal Government to exercise jurisdictional power not specified in the Constitution Act.

It isn’t clear whether Alberta or Ontario will re-establish the carbon tax systems that had been put in place by previous provincial leaders. Jason Kenney said that Albertans would be consulted on how to move forward with a plan, and Ontario Environment Minister Jeff Yurek did not say if they will reintroduce a cap-and-trade process similar to the one they dismantled after their last election. Saskatchewan has already decided to implement a fuel charge similar to the one found in New Brunswick.



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