Ontario challenges federal carbon tax

Ford PCs’ move would create pre-election headache for Trudeau and the Liberals

Ontario is launching a legal fight against the federal government’s plan to impose carbon taxes on provinces that don’t already have them, following a case Saskatchewan filed earlier this year.

“Our government will be launching our own challenge of the Trudeau Liberal carbon tax at the Ontario Court of Appeal,” Attorney General Caroline Mulroney said in a Thursday news conference with Environment Minister Rod Phillips. In fact, she later clarified, it had already filed paperwork. The PCs pledged that they’d do this in the last election campaign. “Promise made, promise kept,” Mulroney said.

The legal cause is iffy at best, but fighting over carbon taxes will last at least until the next federal election. Saskatchewan and Alberta are arguing the federal government doesn’t have the right to decide whether each province’s plan to reduce greenhouse-gas emissions is good enough, which is what the Greenhouse Gas Pollution Pricing Act proposed by PM Justin Trudeau would do.

The federal law, which has been put out in draft form but not introduced as a bill yet, would put a federal tax on fuels and charge businesses with a lot of industrial emissions, but only in provinces that don’t do something along those lines themselves. The federal government would return the proceeds to the provinces.

The feds call it a “backstop.” Ontario and Saskatchewan call it an illegal intrusion into their business.

Both provinces are using an unusual legal tool called a “reference,” asking their top provincial courts to rule on whether the Greenhouse Gas Pollution Pricing Act would be constitutional before it’s actually passed.

Saskatchewan’s conservative government submitted its reference last April, and Ontario is also applying to make arguments when the Saskatchewan case is heard.

The provinces and federal government share jurisdiction over the environment — unlike, say, defence, which is exclusively federal, or education, which is exclusively provincial. Both can make laws and rules to protect the environment, and both can charge taxes.

The federal government says the Greenhouse Gas Pollution Pricing Act is an example of “co-operative federalism,” where the federal government has a national goal of reducing carbon emissions but gives provincial governments a lot of room to decide what they’ll do about it.

Alberta and British Columbia have carbon taxes, and those are fine as far as the feds are concerned; until this month, Ontario had a cap-and-trade market in emissions permits, and that was cool, too. It’s only if a province does basically nothing that the federal government will step in.

Saskatchewan’s detailed legal argument, which it filed to support its case earlier this week, says that’s the opposite of cooperative federalism.

“There will, quite simply, be no need for co-operative federalism if the federal government can unilaterally pursue its policy objectives with respect to matters falling within provincial jurisdiction without the need for the willing and voluntary participation of the provinces,” Saskatchewan says. “Co-operative federalism” should include the right for a province to not co-operate, if that what its people want.

Legal experts don’t seem to think this will work.

Manitoba’s government, also run by Progressive Conservatives, commissioned a legal assessment that concluded in 2017 that the Supreme Court of Canada won’t likely buy the argument the dissenting provinces are making.

The federal government can tax things, and, “The mere fact that federal legislation will be inactive in compliant provinces would not by itself make the law unconstitutional,” Manitoba’s lawyers told their bosses.

What these cases can do, though, is drag out the discussion. If the Saskatchewan and Ontario courts give the provinces answers they don’t like, they can appeal to the Supreme Court. Which will all but have to get involved if two provincial appeals courts have opinions on the same federal legislation that differ even the teensiest bit.

Because references just involve legal arguments without trials and evidence, they can move pretty quickly, by court-case standards.

We’re still talking about many months to over a year. First provincially, then at the Supreme Court. All the while talking about Trudeau-carbon-tax-Trudeaucarbon-tax-Trudeau-carbon-tax, into the next federal election in 2019 and maybe beyond.

A carbon tax “invites economic catastrophe,” Phillips said, and anyway carbon taxes don’t work.

Which is a weird position for supposed conservatives such as him and Mulroney to take — that prices don’t affect people’s choices.

Even weirder from two ministers who both signed up as Ontario Progressive Conservative candidates when pricing carbon was party policy. But politics is politics.

Combine the carbon-tax case with their pursuit of the feds over the costs of supporting refugee claimants (or, as the province always calls them, “illegal border crossers”) and the Progressive Conservatives are setting Ontario up as the major institutional opposition to the federal Liberals.

Andrew Scheer and the federal Tories can criticize. Doug Ford and the Ontario Tories can do things.

“Our message to the prime minister is that it’s never too late to do the right thing,” Phillips said.

“Prime minister, cancel your carbon tax. Put Ontario families and Ontario businesses first.”