Carbon tax court fight continues
FEDERAL, PROVINCIAL BATTLE OVER CARBON TAX GOES BEFORE SUPREME COURT THIS WEEK
Prime Minister Justin Trudeau’s carbon tax is going on trial today. The Supreme Court of Canada is set to hear appeals in three separate cases to determine if the federal carbon-tax legislation is constitutional or if it encroaches unacceptably on areas of provincial jurisdiction.
Appeals courts in Saskatchewan and Ontario upheld the law, while the Alberta Court of Appeal ruled it unconstitutional.
The Supreme Court case could be a make-or-break decision for one of the central pillars of the Liberal climate agenda. It accounts for as much as 40 per cent of the cuts to greenhouse-gas emissions needed to meet Canada’s obligations under the Paris climate change agreement.
The case is to be heard over two days, including submissions from at least seven provinces, the federal government, the Assembly of First Nations and nearly two dozen interveners that include provincial utilities, environment groups and unions.
Stewart Elgie, director of the Environment Institute at the University of Ottawa, says the case is not going to decide if carbon pricing is good policy, but rather who has jurisdiction over it.
“The basic issue is who has the constitutional power to price carbon,” said Elgie.
The Alberta, Ontario and Saskatchewan governments argue the law steps into their jurisdiction over natural resources and provincial taxation, while Ottawa conversely says carbon emissions are an issue of national concern, which do not respect provincial boundaries and require a national approach to address.
The federal Greenhouse Gas Pollution Pricing Act was passed in June 2018 and sets minimum national thresholds for a price on carbon pollution, starting at $10 a tonne, and rising each year until it hits $50 a tonne in 2022.
The idea is that making it more expensive to produce greenhousegas emissions will change behaviour, provoking people to drive less, buy more efficient cars or homes, or adjust their buying habits so they pay less tax. At the same time, it spurs the development of technologies to allow individuals to curb their emissions.
Ottawa is returning 90 per cent of the revenues in the form of incometax rebates to individuals in provinces where the carbon price is paid, and the rest is going to funds to help businesses make themselves more climate-friendly. The rebates are designed with the premise that you can save yourself even more money if you reduce your personal carbon footprint.
The law allows provinces to meet the price threshold however they want, but if a province doesn’t have a carbon tax or a provincial cap-andtrade type program that meets the standard, Ottawa steps in and imposes a federal carbon tax on that particular province.
In 2019, when the law took effect, four provinces — Saskatchewan, Manitoba, Ontario and New Brunswick — didn’t meet some or all of the federal thresholds so Ottawa stepped in.
New Brunswick’s government has since introduced its own system after Premier Blaine Higgs conceded following the 2019 federal election that voters in his province had voted in favour of a carbon tax by electing mostly Liberal MPs.
Alberta was added to the federal carbon-tax program in January, after Premier Jason Kenney killed the provincial carbon tax that had been introduced by the previous NDP government.
Environment Minister Jonathan Wilkinson expressed confidence Ottawa would ultimately prevail, pointing to the fact two out of three provinces agreed with the federal government’s interpretation of the Constitution. He said as well pollution does not suddenly stop at a provincial border.
“Greenhouse gas emissions have no boundaries,” he said. “Our argument is establishing a nationwide minimum standard to release greenhouse gas emissions is a national concern. It is hard for me to imagine it is not a matter of national concern.”