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Canada Supreme Court rules federal carbon tax is constituntional

March 31, 2021

In rejecting a request from some provinces to strike down national carbon pricing, the court declared that the measure meets an important national need.

In a decision rendered March 25th that marked an important victory for Prime Minister Justin Trudeau’s climate change agenda, Canada’s Supreme Court ruled that the federal government’s imposition of carbon taxes in provinces that oppose them was constitutional according to a March 25, 2021 New York Times report

Citing Parliament’s power to legislate on matters related to “peace, order and good government,” the court said that fighting climate change by reducing greenhouse gas emissions was a matter of “national concern” protected under the Constitution.

“This matter is critical to our response to an existential threat to human life in Canada and around the world,” the court wrote in a 6-to-3 decision.  “Climate change is real. It is caused by greenhouse gas emissions resulting from human activities and it poses a grave threat to humanity’s future.”

Setting minimum carbon prices as a way to reduce emissions and encourage efficiency is a cornerstone of Mr. Trudeau’s climate change program. During the 2015 election campaign that first brought him to power, Mr. Trudeau emphasized the need for provinces to implement carbon pricing, an approach opposed by his Conservative predecessor, Stephen Harper.

Like Republicans in the United States, conservative premiers in the oil-producing provinces of Alberta and Saskatchewan have long strenuously campaigned against carbon pricing. They were joined by Doug Ford, another Conservative, who canceled the carbon pricing program in Ontario shortly after he became premier of Canada’s most populous province in 2018.

Court challenges by those three provinces of Mr. Trudeau’s carbon pricing law ultimately led to the Supreme Court’s decision.

In 2019, Mr. Trudeau set a minimum price for carbon. It will become 40 Canadian dollars a metric ton on April 1 and will reach 170 dollars a ton in 2030. Most provinces have their own programs to meet those targets, either through a direct charge on fuels and industry emissions or by setting a cap on emissions and then creating a marketplace for industries that exceed the limit to buy emission permits from other businesses who fall below the cap.

The federal government has stepped in only when a province, like Ontario under Mr. Ford, refused to price carbon. In those cases, it placed a tax on fuel and set other fees for industrial emissions.

The Supreme Court upheld the constitutionality of the law in part because the federal plan kicks in only if provinces do not set up their programs, thus maintaining the shared jurisdiction the two levels of government hold on environmental issues.

It also concluded that setting a single national minimum price for carbon is necessary for effectively reducing greenhouse gases, which makes federal involvement essential

“Addressing climate change requires collective national and international action,” the court wrote. “This is because the harmful effects of GHGs are, by their very nature, not confined by borders.”

What this means to you
In a March 25th decision that marked an important victory for Prime Minister Justin Trudeau’s climate change agenda, Canada’s Supreme Court ruled that the federal government’s imposition of carbon taxes in provinces that oppose them was constitutional. In 2019, Mr. Trudeau set a minimum price for carbon. It will become 40 Canadian dollars a metric ton on April 1, 2021 and will reach 170 dollars a ton in 2030.  Court challenges by three oil producing provinces of Mr. Trudeau’s carbon pricing law ultimately led to the Supreme Court’s decision.

MIRATECH can help
CONTACT MIRATECH for stationary engine emission solutions in Canada.