Saskatchewan fights federal carbon tax in court
Seeks reference to decide if pricing is ‘unconstitutional’
OTTAWA • The Saskatchewan government launched its long-awaited constitutional challenge of the federal carbon price Wednesday, the opening volley in what could become a much larger battle between Ottawa and the provinces over carbon taxation.
Saskatchewan has long been the most outspoken opponent of carbon pricing in Canada, but the legal challenge comes as opposition leaders in Ontario and Alberta signal they will fight the tax if elected, raising the possibility that the battle could spread far outside Saskatchewan’s borders.
The provincial government submitted a reference question to the Saskatchewan Court of Appeal on Wednesday morning, asking the court to decide whether the new federal carbon tax bill, the Greenhouse Gas Pollution Pricing Act, is “unconstitutional in whole or in part.”
Saskatchewan premier Scott Moe said the federal government is infringing on provincial jurisdiction over natural resources by imposing a federal carbon price on only those provinces that don’t establish their own.
“This does not make sense according to our Canadian Constitution, and fails to respect the sovereignty and autonomy of the provinces with respect to matters under their jurisdiction,” he said. “Saskatchewan should not be subject to this tax simply because the Trudeau Liberals do not like our climate change plan.”
Responding to the challenge in Ottawa on Wednesday, Prime Minister Justin Trudeau said that “there are still people out there who think there’s a choice to be made between what’s good for the environment and good for the economy.”
Saskatchewan has been threatening a legal challenge of the carbon tax since 2016, under Moe’s predecessor, Brad Wall. In December 2016, when most other provinces signed a pan-Canadian framework to fight climate change and agreed to put a price on carbon, Saskatchewan refused to sign on, and has since remained in staunch opposition to any type of price on carbon.
“This tax would reduce competitiveness here in the province of Saskatchewan,” Moe said. “And I would put forward it is a very slippery slope for our federal government to be infringing on what is provincial jurisdiction in this case.” If necessary, he said, he will take the province’s case to the Supreme Court of Canada.
Still, some constitutional lawyers have cast doubt on the odds of Saskatchewan’s challenge succeeding. “It’s a long shot,” said Stewart Elgie, professor of law and economics at the University of Ottawa. Elgie said provinces have challenged many federal environmental laws, including the Canadian Environmental Protection Act, the Species at Risk Act and the Canadian Environmental Assessment Act, but all have been upheld by the courts. The federal government can legislate “over any matter that is of national or international concern,” he said, and climate change is the “poster child” for an issue of international concern.
Saskatchewan’s argument that the federal government is unfairly imposing a tax on certain provinces is similar to a previous legal challenge of the Canadian Environmental Protection Act, Elgie said, which also allows Ottawa to impose regulations only if the provinces don’t have adequate measures in place. That law was upheld by the Supreme Court of Canada, said Elgie. “This is not untrodden ground.”
The federal government has said it expects provinces to provide details on their carbon pricing plans by September 2018, and any province that fails to do so will be subject to a federal backstop carbon tax as of January 2019. The federal tax will start at $20 per tonne in 2019, increasing by $10 per tonne annually to $50 per tonne in 2022.
Manitoba premier Brian Pallister, who held out on signing the pan-Canadian framework until February, has said he’s received legal advice that were Manitoba to challenge the federal carbon tax it would lose.
On Wednesday, Environment Minister Catherine McKenna said Saskatchewan’s decision was “disappointing, but certainly we’re very clear that we have the authority to do this.” She added that Canada’s four largest provinces — Ontario, Quebec, B.C. and Alberta — already have carbon prices in place.
Still, there are signs that ground could shift. Conservative opposition parties in Alberta and Ontario, under Jason Kenney and Doug Ford, considered favourites to win government in their provinces’ next elections, have promised to cancel their provinces’ carbon pricing schemes, and both have hinted they might challenge the federal tax in court.