Commentary: Reference re Greenhouse Gas Pollution Pricing Act [Draft 1.0]



On May 3, 2019, the Saskatchewan Court of Appeal rendered a landmark decision with respect to Canada's position in relation to climate change when a 3-2 majority found that the federal carbon tax imposed under the federal government's Greenhouse Gas Pollution Pricing Act is constitutional, not only in part but in whole. Because the decision was rendered by an Appeal Court, the decision is binding on all Courts across Canada, subject only to the final authority of the Supreme Court of Canada. While the Province of Saskatchewan is in the process of preparing its appeal to the Supreme Court of Canada. Until such time, the issues that were decided addressed by the Saskatchewan Court of Appeal remain the current state of law in Canada. The below post highlights some of the key arguments and findings that made in Saskatchewan's constitutional challenge to the federal carbon tax.

A. Saskatchewan Accepts Climate Change as an Urgent Existential Issue

1. Climate Change is a "Great Existential Issue"


From the onset, the Saskatchewan Court of Appeal gave a meaningful and purposeful direction to the constitutional challenge: "The issue is not whether GHG pricing should or should not be adopted or whether the Act is effective or fair. Those are questions to be answered by Parliament and by provincial legislatures, not by courts." Aside from a settle reference to the separation of powers (not to be confused with the 'division of powers') between the judicial, legislative, and executive branches of government, the value of this statement stems from the highly politicized nature of climate change and the federal carbon tax. Politicians (and their million dollar advertising campaigns) have been relentless in their efforts to twist and turn the carbon tax debate to gain political advantage. 

The Saskatchewan Court of Appeal made three further important remarks that hinted towards the majority's decision: (1) climate change is a "great existential issue"; (2) climate change is of "pressing importance"; and (3) the Province of Saskatchewan acknowledges and accepts points (1) and (2):
"The actual record presented to the Court confirms that climate change caused by anthropogenic greenhouse gas (GHG) emissions is one of the great existential issues of our time. The pressing importance of limiting such emissions is accepted by all of the participants in these proceedings".
Chief Justice Richards' choice of the words "[...] great existential issues of our time [...]" sets the tone early on in the constitutional challenge by characterizing climate change as a matter of human existence, a matter that is indisputably transnational in essence and character. While no actionable legal implications attach to this particular comment by Chief Justice Richards, it is nevertheless very telling as to the Chief Justice's state of mind. Short of being contradictory to its position, the Province of Saskatchewan's concession to these same remarks at least 'softened' the province's position.

2. Climate Change is an Issue Requiring Immediate Assistance

Chief Justice Richards' second important remark spoke to the immediacy of climate change. Immediacy is integral to the global climate change problem; it is a sense that States must act now. The federal carbon tax makes it abundantly clear that it will not remain passive in the face of provincial complacency towards climate change. It achieved this through legal verbiage that triggered the application of the federal carbon tax on April 1, 2019, to any province or territory that did not yet have a climate change action plan that met national standards. In different terms, the federal carbon tax will not allow a province or territory to remain inactive in the face of Canada's fight against climate change.

B. Saskatchewan's First Line of Argumentation

1. How the Saskatchewan Court of Appeal Framed the Issues

a. The Environment is Not Exclusive to the Federal or Provincial Governments


After eloquently setting the tone for the constitutional challenge in its opening statements, the Saskatchewan Court of Appeal proceeds lucidly to explain that the legislative distribution of powers operated in sections 91 (federal) and 92 (provincial) of Canada's Constitution make no express mention of "the environment".  The Court of Appeal for Saskatchewan further explained that the environment is not a legislative subject-matter that is exclusive to the provinces or federal government, and that a provincial and federal legislation on the environment would be valid so long as it did not overstep into the other's sphere of competence. 
  
b. The Federal Government Can Legislate in Relation to Issues such as GHGs

More to the point, the Saskatchewan Court of Appeal affirmed that the core issue before it was not whether the federal government had the power to legislate in relation to issues such as GHGs but rather whether in doing so, the federal government stayed “within the four corners of its prescribed subject matters”. In its own words:
“Parliament can legislate in relation to issues such as GHGs so long as it stays within the four corners of its prescribed subject matters and the provinces can do the same so long as they stay within their prescribed areas of authority”. [Emphasis added]
According to this statement by the Saskatchewan Court of Appeal, the Province of Saskatchewan's primary line of argumentation should have spent at least some time clarifying what it believed to be the the delineating constitutional boundaries or, in the Court's own words, the "four corners" of the federal government's prescribed subject matter. Once clarified, the province of Saskatchewan should then have argued that the federal carbon tax went beyond these constitutionally permissible boundaries. What did the Province of Saskatchewan argue instead?

2. How the Province of Saskatchewan Approached the Issues

Far off the mark set by the Saskatchewan Court of Appeal, the province perplexingly advanced, as its first argument, that: (1) the Greenhouse Gas Pollution Pricing Act was "a tax in the constitutional sense of the term"; (2) that it was unconstitutional because the federal government determines in which province the federal carbon tax applies, and that this offends the principle of federalism; and (4) that it violates section 53 in that all taxes must be approved by legislative bodies rather than by executive government.

3. How the Court of Appeal Addressed the Province's First Arguments

Interestingly, the Saskatchewan Court of Appeal did not spend much of its attention on determining whether or not the federal carbon tax was or not a true tax "in the constitutional sense of the term". The Saskatchewan Court of Appeal instead underscored the fact that the federal government "enjoys broad taxation authority" under the Constitution. Indeed, section 91(3) of the Constitution expressly mentions "The raising of Money by any Mode or System of Taxation".

With respect to the Province of Saskatchewan's argument that the federal carbon tax violates Canada's federalism, the Saskatchewan Court of Appeal rightly underscored the following:
"The principle of federalism is not a free-standing concept that can override an otherwise validly enacted law. Rather, it is a value to be taken into account when interpreting the Constitution".
The Saskatchewan Court of Appeal did not directly address the Province of Saskatchewan's second argument that the carbon tax is unconstitutional because the federal government determines in which province the federal carbon tax applies. However, it could easily be argued that the federal carbon tax in fact gives a choice to every province between: (a) implementing their own provincial climate change action plan that meets national standards; and (b) not implement a provincial climate change action plan and allow the federal carbon tax to fill the void. 


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