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Supreme Court carbon tax ruling: The last ride of the resistance?

This column is an opinion from Andrew Leach, an energy and environmental economist at the University of Alberta. For more information about CBC’s Opinion section, please see the FAQ.

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In November of 2015, I stood off to the side of the stage as then-premier Rachel Notley announced a policy that I’d played a large role in designing — an economy-wide carbon tax complemented by a so-called output-based pricing system for large emitters. A very similar approach was soon adopted by the federal government in the Greenhouse Gas Pollution Pricing Act (GGPPA), passed in 2018.

For a time, at least among the provinces, only Saskatchewan’s Brad Wall and then Scott Moe stood in staunch opposition to carbon pricing as the solution to our emissions dilemma.

Two events — the election of Jason Kenney in Alberta and the downfall of Patrick Brown in Ontario — changed that and set the stage for a once-in-a-generation constitutional fight.

Brown had championed an Ontario carbon tax but, after his fall from grace, Doug Ford rose to power campaigning against carbon pricing. Kenney did the same, railing against the carbon tax while travelling around Alberta in a gas-guzzling pickup. His first act as premier was to cancel the carbon tax.

“The Resistance,” as Maclean’s magazine termed the coalition Kenney, Moe and Ford built — and which came to include both New Brunswick and Manitoba’s conservative premiers — would fight carbon pricing all the way to the top court in the land and at every doorstep and podium in between.

Never a sure thing

On the way to the Supreme Court, three provincial reference cases tested the question.

In Ontario and Sasktachewan, courts held the federal legislation constitutional, albeit with dissenting opinions from three of the eight judges who heard the case. In Alberta’s Court of Appeal, a much more political decision saw four judges reject the legislation as beyond Parliament’s powers, with Justice Kevin Feehan alone in dissent.

The 8-7 split across the three provincial courts of appeal speaks to the complexity of the decision. Don’t think of this as having ever been a sure thing.

As it happened, six of nine justices of the Supreme Court of Canada found Thursday that the GGPPA was within the legislative reach of the federal government. The decision is relatively narrow and technical, but it establishes that federal carbon pricing, at least insofar as it serves to set a minimum carbon price in Canada, is constitutionally valid.

WATCH: Alberta Premier Jason Kenney reacts to carbon tax ruling

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Jason Kenney expressed disappointment with the Supreme Court’s decision in favour of the federal Liberals’ carbon tax 1:18

As a result of this ruling, federal carbon prices currently applied in Alberta, Ontario, New Brunswick, Saskatchewan, Manitoba, Yukon, and Nunavut remain in place and, as the federal carbon price level increases toward the $170-per-tonne price announced by Prime Minister Justin Trudeau in December, provinces currently exempt from the federal carbon pricing legislation will either need to charge higher prices or Ottawa will impose its prices in those locations as well.

Perhaps more importantly, this ruling — in the first climate change policy case to reach the Supreme Court — defines a guidepost for how far the federal government can go in its efforts to constrain greenhouse gas (GHG) emissions and what policy tools it might access to do so.

The GGPPA is a fairly unique piece of legislation though, and so today’s decision doesn’t tell us a lot about what else the federal government could or could not do to combat climate change.

The role of the court

In deciding constitutional cases, the role of the court is to determine two things: first, the courts assess the primary purpose and legal effects — the pith and substance — of the law being challenged, and then they determine whether the law falls within the reach of the powers of the enacting level of government as set out in the Constitution.

Courts don’t ask which level of government would be best suited to enact a particular piece of legislation, or whether the legislation in question is likely to be in the public interest, or even whether it would be particularly effective at addressing the problem it seeks to solve.

They also don’t focus on the importance of the problem at hand. Trust me, the number of constitutional division-of-powers cases that focus on sand and gravel quarries is far greater than you’d imagine. But, in this case, the nature of the climate change threat clearly played a role in framing the majority opinion.

The role of the court is not generally to set out the bounds of jurisdiction, but only to determine whether the government can do what it seeks to do in the particular piece of legislation at issue, and so this is unlikely to be the last word on the constitutionality of GHG policies. 

The majority of the court decided that the legislation’s purpose and effect to, in its words, “establish minimum national standards for GHG emissions pricing,” met the legal requirements established by more than a century of jurisprudence with respect to the Peace, Order and Good Government clause of the Constitution.

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The role of the court is to determine whether the government can do what it seeks to do in the particular piece of legislation at issue, and so this is unlikely to be the last word on the constitutionality of GHG policies, says Andrew Leach. (Mike dePaul/CBC)

The three who dissented, notably including Alberta’s Justice Russell Brown, took issue primarily with the degree of discretionary authority and federal overreach into areas of provincial jurisdiction. I’d been worried that these issues could carry the day, and I’m glad they didn’t.

Ho hum, but also, ‘wow’

In some ways, the whole thing is a bit anticlimactic; the decision means that the carbon pricing plan set out by Prime Minister Trudeau’s Liberals in December will remain in place. Ho hum. Much of my day today was spent telling people how little would change because the law hadn’t been overruled. 

But also, wow. After more than five years of fighting and posturing, we now know that the federal government can price GHG emissions, and we have a constitutionally valid national carbon price.

But, today is not the end.

First, there will be more legal fights. So far as I can tell, we’ve never had a major economic policy fight resolved by a single decision at the Supreme Court or Canada’s previous high court, the Judicial Committee of the Privy Council.

Issues of this magnitude take decades or more for legal clarity over jurisdiction to be established.

Disputes over prohibition began before Confederation, and the last major case was settled at the Supreme Court in 1946. Disputes over the grain trade and agricultural supply management began in the early 1900s, and cases were still before our highest courts as recently as the early 2000s. Disputes over competition policy and interprovincial trade barriers have also come before the courts for more than a century. Climate change promises the same.

More fights to come

There will be different types of cases too, both from those arguing a charter right to a clean environment, and from those who would seek to force the federal government to establish more stringent policies to reduce emissions.

The regulations determining who will pay a federal carbon tax will also almost certainly be challenged. A roadmap for such a challenge was perhaps provided in his dissent today by Justice Malcolm Rowe, who called further challenges of federal government encroachment in areas of provincial jurisdiction “inevitable.” This is the first time, not the last time, the country’s highest court will opine on climate change.

And, there’s also the political fight.

In his reaction today, Kenney was far from laying down arms in his fight against carbon pricing. Moe called it bad policy. Ford also expressed disappointment in the ruling.

But the conservative resistance will also know that a change in federal policy is only an election away, and the decision today does nothing to bind future governments to price carbon or to take any action at all on climate change.

So, for today, those pushing for better and more stringent climate policy should savour a big win. But they should also start getting ready for the next fight. It starts tomorrow.

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