A victory for common sense
SASKATCHEWAN APPEAL COURT RULES IN FAVOUR OF FEDERAL CARBON TAX
Climate change, the Saskatchewan Court of Appeal declares at the outset of its ruling on the constitutionality of federal carbon pricing legislation, “is one of the great existential issues of our time.” Indeed, it was accepted as such by all of the interveners before it, as was the necessity of limiting greenhouse gas emissions to combat it.
Ah, but what is an existential issue — existential, as in existence — beside the “principle of federalism”? The continuing existence of the species not previously having been classified as either a federal or provincial responsibility, the government of Saskatchewan hoped to establish,
in referring the matter to the court, that it is indeed strictly a provincial concern — or certainly nothing to warrant anything so radical as a federal carbon tax.
That three-fifths of the Court of Appeal was unpersuaded by the province’s arguments may therefore be counted as something of a victory for the planet, federalism and the rule of law, not to say common sense. Had the court shot down the federal plan, it would have effectively doomed any chance of Canada meeting its international commitments for greenhouse gas emissions under the Paris Agreement, though that would not have stopped governments from switching to vastly more expensive means to sustain the attempt.
That two of the five could not, on the other hand, see past their co-operatively federalist noses is worrisome.
For the issue will inevitably end up in the Supreme Court of Canada — the same Supreme Court whose obtuse ruling in R. v. Comeau, the “free the beer” case, figures prominently in the minority’s reasoning. The glass may be two-fifths empty.
At first blush it would seem a stretch to argue that a federal tax intended to reduce emissions of a gas that, in present atmospheric concentrations, represents (to quote the Paris Agreement) “an urgent and potentially irreversible threat to human societies and the planet,” is unconstitutional.
Not having been top of mind to the Fathers of Confederation, the environment is not among the powers enumerated as being exclusively federal or provincial, meaning each may legislate in the area in the furtherance of its other responsibilities. Parliament may likewise raise revenues, it says in the Constitution, “by any Mode or System of Taxation” it likes.
And, as a practical matter, an emissions-reduction scheme that was not, at a minimum, enforced by the feds would be unlikely to succeed: the incentive, if it were left to the provinces, for one or more of them to free ride on the others would be overwhelming.
Still, the feds went to some length to accommodate provincial concerns. So long as they met the federal minimum price, each could implement its own form of carbon pricing. Or if a province refused to have anything to do with it, it could leave it to the federal government to implement its own backstop tax — and keep the revenues.
But there’s the rub: by levying the charge on - ly in some provinces and not others, Saskatchewan argued, the feds had violated the “principle of federalism.” That may be so, the court’s majority responded — but it’s not actually a legal concept.
“Federalism,” the maj o r i ty w r i t e s , “is not a free-standing constitutional imperative that somehow independently trumps the distribution of powers prescribed by the Constitution … Rather, it is a value that informs how the Constitution … is to be understood and interpreted.” Neither is there any law or precedent that says the federal government can’t legislate in different ways for different parts of the country.
Perhaps the provinces find it objec tionable to have the feds sit in judgment of their handiwork, or to be told that Ottawa would tax their population if they failed to legislate as it preferred. But they do not have a constitutional objection. That federal action is predicated on provincial inaction does not mean the feds are legislating for the provinces; neither are the provinces impeded from legislating for themselves.
Saskatchewan had another argument. The discretion left to the “Governor in Council” — cabinet — to impose the tax or not, it said, violates an explicit constitutional rule: that only Parliament may levy taxes. The court makes even shorter work of this.
In the first place, the carbon tax, as designed, does not meet the constitutional definition of a tax — something that raises revenue for the government that collects it — in as much as any revenues from the tax are returned to the province (whether to the government or the population) in which it is collected. It’s more in the nature of a regulatory charge — something intended to alter behaviour.
Suppose it were a tax. In deciding where and when it should apply, the government would not be usurping Parliament’s prerogatives. Parliament itself gave it that power: it’s right there in the legislation Parliament voted for.
Saskatchewan had one final try. For the federal government to assert a general authority to regulate greenhouse gas emissions, it argued, would involve it in so many areas of the economy as to inevitably encroach upon a wide range of provincial jurisdictions — everything from “highway speeds” to “the content of livestock feeds.” To which the appropriate reply is: POGG.
That’s wonk shorthand for the general residual power clause in the Constitution, allowing the federal government “to make laws for the Peace, Order and good Government of Canada, in relation to all Matters not … assigned exclusively to the Legislatures of the Provinces.”
The clause doesn’t give the feds carte blanche to regulate emissions however it likes, the court ruled. That really would encroach on provincial turf. But a simple benchmark price, that leaves consumers and business free to choose how to respond, and provinces free to pass their own additional measures? There’s no violation of the principle of federalism in that.