Canadian carbon tax is here to stay: Supreme Court rules Greenhouse Gas Pollution Pricing Act constitutional
In September 2020 the Supreme Court of Canada heard Reference re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11, a case featuring appeals from Ontario, Saskatchewan, and Alberta with respect to the constitutionality of the Greenhouse Gas Pollution Pricing Act (“GGPPA”). Much of the debate focused on two parts of the GGPPA:
- the regulatory charge on fuel imposed under Part I of the GGPPA (“Fuel Charge”); and,
- the Output Based Pricing System (“OBPS”) imposed under Part II of the GGPPA.
See our previous article for a refresher on the Fuel Charge and the OBPS.
On March 25, 2021 the Supreme Court release their decision. A majority of six ruled that: “The GGPPA is constitutional. It sets minimum national standards of GHG price stringency to reduce GHG emissions. Parliament has jurisdiction to enact this law as a matter of national concern under the peace, order, and good government (“POGG”) clause of s. 91 of the Constitution Act 1867”.
The majority also decided that the fuel and excess emission charges under the GGPPA were sufficiently connected to the regulatory scheme of the GGPPA to be considered constitutionally valid regulatory charges that advanced the GGPPA by altering behaviour as opposed to taxes (which are limited to recovery of costs for the government, and require parliament to enact instead of just the Governor in Council).
What this decision means for those subject to the carbon tax
Aside from developing the case law surrounding POGG in a significant way (which is outside the scope of this update), the decision all but assures that carbon pricing in Canada will rise in accordance with the government’s previously published plan: A Healthy Environment and a Healthy Economy. Expected increases are $15 per year per tonne of carbon pollution, starting in 2023, rising to a total of $170 per tonne of carbon pollution in 2030.
Background: Appellate court decisions
In the Reference re Greenhouse Gas Pollution Pricing Act, 2019 ONCA 544 the Ontario Court of Appeal decided (with a lone dissenter) that the GGPPA was constitutional. The majority concluded that the GGPPA was permissible under the national concern branch of the POGG powers of the federal government.
In the Reference re Greenhouse Gas Pollution Pricing Act, 2019 SKCA 40 the Court of Appeal for Saskatchewan decided in a 3-2 decision that the GGPPA was constitutional and that the purpose of the GGPPA (setting a minimum price on greenhouse gas emissions nationally in order to mitigate their use) was of national concern and fell under the POGG authority of Parliament.
In the Reference re Greenhouse Gas Pollution Pricing Act, 2020 ABCA 74 the Court of Appeal of Alberta ruled that the both the Fuel Charge and OBPS were unconstitutional in their entirety but declined to express any opinion on other parts of the GGPPA. In that case a lone dissenter found the GGPPA constitutional.
This update is intended for general information only and should not be relied upon as a substitute for consultation with a lawyer respecting the reader’s specific circumstances. Each legal or regulatory situation is different and requires review of the relevant facts and applicable law.
If you have questions about the above, please contact the authors to discuss your needs for specific legal advice relating to the particular circumstances of your situation.
Due to the rapidly changing nature of the law, Stewart McKelvey is not responsible for informing you of future legal developments related to this update.
Lara Greenough and Sheila Lanctôt Board members, directors, committee members, employees and anyone acting for a regulatory body or under its governing legislation, all have the obligation to act and make decisions in good faith.…Read More
We are pleased to present the eighth issue of Discovery, our very own legal publication targeted to educational institutions in Atlantic Canada. With COVID-19 vaccines rolling out across the country, a renewed sense of hope is…Read More
Dante Manna with the assistance of Kali Robertson (summer student) The Nova Scotia Government recently released regulations reassigning the authority for administering financial hardship unlocking in the province. Effective July 1, 2021, individuals will apply directly…Read More
Brittany Trafford The Canadian borders have been restricted for over a year now and many families have struggled with being separated. Throughout 2020 and early 2021 restrictions have fluctuated as the federal government tried to…Read More
Harold Smith, QC with the assistance of Matthew Raske (summer student) A recent labour arbitration decision, Unifor Local 64 and Corner Brook Pulp and Paper Limited, shows how the permissibility of drug and alcohol testing continues…Read More
Brittany Trafford Last week the Maritime provinces announced various re-opening plans based on vaccine trajectories, with Newfoundland and Labrador making an announcement today¹. These plans address, among other things, who will be able to enter…Read More
Chad Sullivan A recent labour arbitration decision (Canadian Broadcasting Corp. and Canadian Media Guild (Khan), Re, 2021 CanLII 761) provides another example of how privacy law continues to evolve and can directly impact the outcome…Read More
Kevin Landry and Annelise Harnanan (summer student) In April 2021, the federal government introduced the draft Retail Payments Activities Act (“RPAA”) as part of Bill C-30, the Act to implement the 2021 federal budget. Under…Read More