SCC rules Federal Carbon Tax is Constitutional

In 2018, Parliament enacted the Greenhouse Gas Pollution Pricing Act (the Act). The Act:

1. establishes a fuel charge that applies to producers, distributors and importers of various types of carbon-based fuel;
2. sets out a pricing mechanism for industrial greenhouse gas emissions by large emissions-intensive industrial facilities;
3. authorizes the Governor in Council to make regulations providing for the application of provincial law concerning greenhouse gas emissions to federal works and undertakings, federal land and Indigenous land located in that province, as well as to internal waters located in or contiguous with the province; and
4. requires the Minister of the Environment to prepare an annual report on the administration of the Greenhouse Gas Pollution Pricing Act and have it tabled in Parliament.

Saskatchewan, Ontario and Alberta challenged the constitutionality of certain parts of the Act and asked whether the Greenhouse Gas Pollution Pricing Act is unconstitutional in whole or in part. In split decisions, the courts of appeal for Saskatchewan and Ontario held that the Greenhouse Gas Pollution Pricing Act is constitutional, while the Court of Appeal of Alberta held that it is unconstitutional. The Attorney General of British Columbia, who had intervened in the Court of Appeal of Alberta, the Attorney General of Saskatchewan and the Attorney General of Ontario appealed to the SCC as of right to the Court.

Justice Côté J. dissented in part and Justices Brown and Rowe JJ. Dissented):

The appeals by the Attorney General of Saskatchewan and the Attorney General of Ontario should be dismissed, and the appeal by the Attorney General of British Columbia should be allowed. The reference questions are answered in the negative.

Justices Abella, Moldaver, Karakatsanis, Martin and Kasirer  held that:

The Greenhouse Gas Pollution Pricing Act is constitutional. It sets minimum national standards of Greenhouse Gas price stringency to reduce Greenhouse Gas emissions. Parliament has jurisdiction to enact this law as a matter of national concern under the peace, order, and good government clause of section 91 of the Constitution Act, 1867.

The decision is being lauded as a landmark ruling on climate change.

You may view the case in brief at: https://www.scc-csc.ca/case-dossier/cb/2021/38663-38781-39116-eng.aspx.

The full decision can be found at: https://scc-csc.lexum.com/scc-csc/scc-csc/en/item/18781/index.do.