Ontario’s top court rules Ottawa's carbon pricing law constitutional; takes effect in Yukon and Nunavut

Federal Environment Minister Catherine McKenna speaks at the Collision 2019 conference in Toronto earlier this year. Image: Collision 2019

TORONTO — The federal government's carbon pricing scheme is constitutionally sound and has the critical purpose of fighting climate change, Ontario's top court ruled in a split decision on Friday.

The Greenhouse Gas Pollution Pricing Act, enacted in April, is within Parliament's jurisdiction to legislate in relation to matters of “national concern,” Chief Justice George Strathy wrote on behalf of the court.

“Parliament has determined that atmospheric accumulation of greenhouse gases causes climate changes that pose an existential threat to human civilization and the global ecosystem,” Strathy said.

“The need for a collective approach to a matter of national concern, and the risk of non-participation by one or more provinces, permits Canada to adopt minimum national standards to reduce (greenhouse gas) emissions.”

Ontario's Progressive Conservative government under Premier Doug Ford, who calls the carbon charge an illegal tax, had argued the act is a violation of the Constitution because it allows the federal government to intrude on provincial jurisdiction.

During four days of submissions in April, Ontario insisted the act would undermine co-operative federalism. Provincial lawyers argued the federal government would end up with the power to regulate almost every facet of life — such as when you can drive, where you can live, or whether you can have a wood-burning fireplace.

For their part, federal lawyers argued the province was fear-mongering. The act, they said, was a legitimate response to potentially catastrophic climate change by creating an incentive for people to change their behaviour.

To the delight of environmental groups, the majority of the Appeal Court agreed with Ottawa, rejecting any contention the carbon levy is an illegal tax.

“They are regulatory in nature and connected to the purposes of the act,” Strathy wrote. “They are not taxes.”

Cutting greenhouse emissions cannot be dealt with “piecemeal” and must be addressed as a single matter to ensure its efficacy, the court said. “The establishment of minimum national standards does precisely that,” it said.

In a dissenting opinion, Justice Grant Huscroft said climate change did not amount to an “emergency case” and warned against allowing rhetoric to colour the analysis. Carbon pricing is only one way to deal with greenhouse gases, he said.

“There are many ways to address climate change, and the provinces have ample authority to pursue them,” Huscroft said.

The federal act currently only applies in four Conservative provinces — Ontario, Manitoba, New Brunswick and Saskatchewan — which Ottawa says don't meet national standards. Alberta is in the process of its own challenge against the law.

Ford said in a statement he was disappointed with Friday's decision and would continue to challenge the carbon tax, while his environment minister said the province would appeal.

Alberta Premier Jason Kenney said that his government is reviewing the decision, “but our initial reaction is that this second split decision, following the Saskatchewan Court of Appeal’s split decision in May, has again rejected the federal government's bid for a sweeping power to regulate GHG emissions in the provinces.”

Kenney said that “Alberta has a strong and credible plan to reduce GHG emissions without punishing Albertans with a retail carbon tax”; a case his government will make to the federal government, to the Supreme Court of Canada and to the Alberta Court of Appeal in its own reference case this fall.

Federal Environment Minister Catherine McKenna called the judgment good news for Canadians who believe climate action is urgent. She took aim at its critics, such as Ford, Alberta Premier Jason Kenney and federal Conservative Leader Andrew Scheer.

“It is unfortunate that Conservative politicians…continue to waste taxpayers' dollars fighting climate action in court rather than taking real action to fight climate change,” McKenna said in a statement.

In all, 14 interveners — among them some provinces, Indigenous groups and environmental and business organizations — lined up to defend or attack the law, with most siding with Ottawa. Some observers said the challenge was more about politics than the environment.

The issue is expected to be ultimately decided by the country's top court.

In May, Saskatchewan's top court in a 3-2 decision upheld the carbon pricing law as constitutional. The Supreme Court of Canada has said it will hear Saskatchewan's appeal of that ruling in December — after the October federal election. Scheer said he would scrap the act as his “first action” if he becomes prime minister.

Federal price on carbon takes effect in Yukon Nunavut

Starting Monday, the federal carbon levy will be applied in Yukon and Nunavut, while the Northwest Territories is set to implement its own price on carbon in September.

The Yukon government says carbon emissions will be taxed at a rate of $20 per tonne for the rest of 2019, before rising each year starting on April 1 until the tax reaches $50 per tonne in 2022.

The costs of gasoline, diesel and propane will go up, while the federal carbon pricing act includes targeted relief for aviation fuel in the northern territories, diesel for electricity generation in remote communities and partial relief for greenhouse operators.

The federal carbon pricing act also includes relief for farmers using fuel in tractors, trucks and other farm machinery, as well as relief for eligible fishing activities.

According to the Yukon government, the average individual is expected to pay less in carbon levies than they get back in rebates and the first rebates are expected in October of this year.

In Nunavut, the territory's finance minister has announced a new rebate program that would subsidize half the costs of the federal carbon tax at the pump, while Ottawa has said it will return all carbon tax revenue it earns from Nunavut back to the territory.

© 2019 The Canadian Press

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