News & Updates

    The Morning Brief - 05.06.19

    Posted by Bruce Carson on May 6, 2019 8:11:51 AM

    NATIONAL ISSUES

    Economy—Saskatchewan Court of Appeal Decision in the Carbon Tax Case

     

    Constitutionality of Federal Carbon Tax

    Background:

    On Friday, The Saskatchewan Court of Appeal delivered its decision on the constitutionality of the Trudeau government’s Greenhouse Gas Pollution Pricing Act. This decision was the first in at least three cases involving the legality of this act. The Ontario Court of Appeal having heard four days of argument a few weeks ago reserved its decision in a case somewhat similar to the Saskatchewan case. Manitoba will be referring the legislation to its Court of Appeal shortly. Arguments in that case may be somewhat different as Manitoba believes its action on climate change is more stringent than that contained in the federal legislation.

    No doubt all of the Court of Appeal decisions will be appealed to the Supreme Court of Canada. It is unfortunate because of the timing of court decisions that they all couldn’t be bundled together in one reference to the Supreme Court of Canada. There is also a federal election in October which could come before or around the time when a decision is delivered by the Ontario Court of Appeal but much before the Manitoba case is heard and decided.

    Those opposed to the carbon tax made the point over the weekend that a decision on the tax will be rendered by the people of Canada long before the courts are through dealing with it.

    This matter, not unlike the Patriation Reference case of 1981 involves both legal and political issues laid before a court for a decision; more on this below. 

    Court Decision:

    The Saskatchewan court decided in a 3-2 decision that the federal act was constitutional, within the authority of the federal government to enact. Both, the majority and minority decisions dealt with climate change and the purpose of the act.

    The majority opinion written by Chief Justice Richards states “climate change is doubtless an emergency in the sense that it presents a genuine threat to Canada.” The emission of greenhouse gasses “is one of the great existential issues of our time.” The majority wrote that climate change “presents a genuine threat to Canada.”

    Richards stated in his judgement “significantly the factual record before the court indicates that GHG pricing is not just part and parcel of an effective response to climate change. It indicates that GHG pricing is regarded as an essential element of the global effort to limit GHG emissions.”

    The dissenting opinion was that the federal levy was a tax “enacted in a constitutionally repugnant manner.” The dissent held that the situation that is the subject of this act fails to meet the threshold for action under the Constitution Act, 1867, Section 91, the Peace, Order and Good Government section.

    The substance of the dissent was that this was a matter that fell within the jurisdiction of a province and there should be the opportunity for local, provincial action on climate change, GHG emission reduction so that local conditions would be taken into consideration.

    Dealing again with the majority decision the court held that as this is a vital national issue and the federal government has the power to set GHG standards that provinces must meet. But the majority also said that climate change is an area of shard jurisdiction where the provinces and federal government have to work together.

    The fact that this is an area of shared jurisdiction where to effect a solution, provinces and the federal government should work together, did not receive the attention it should have from the entire court.

    Comments on the Decision:

    The comments by political actors after the decision were predictable and did not take into consideration the closeness of the decision; it was not a unanimous decision or a complete victory either for or against the carbon tax. Federal Environment and Climate Change Minister McKenna was quoted as saying that those who oppose the carbon tax, Conservative politicians, should “stop playing partisan games and join in on serious and effective climate action.”

    Those opposed to the carbon tax and therefore critics of the decision said there would be an appeal to the Supreme Court and Premier Moe of Saskatchewan said “no one in this nation should confuse climate action with the carbon tax.” He added that we in this province will continue with our fight against climate change and continue to implement the Prairie Resilience Plan.

    The new premier of Alberta, Jason Kenney said “we disagree with the narrow ruling by the majority that the federal government has the power to ensure a provincial minimum price on carbon and will be supporting Saskatchewan in their appeal to the Supreme Court of Canada.”

    No olive branches were held out by either side.

    But then again, why would they as this is as much a political as it is a legal issue in an election year and the court missed the opportunity to lay out a path which would lead to some form of reconciliation of positions.

    Patriation Reference Case, 1981:

    In the 1981 Patriation Reference the Supreme Court of Canada was asked two questions; was there a convention requiring the consent of the provinces be obtained before the federal government requested that the United Kingdom parliament enact an amendment to the constitution of Canada that would affect the powers of the provinces and the Court was also asked whether there was a legal requirement of provincial consent?

    The Court decided there was no legal requirement of provincial consent but did venture into the political and a majority of the Court held there was a convention requiring the federal government to obtain a “substantial measure” or “substantial degree” of provincial consent before requesting action from the U.K.

    As Peter Hogg points out in his text “Constitutional Law of Canada” “the only possible effect of answering the convention question in the Patriation Reference was to influence the outcome of the political negotiations over the 1981-82 constitutional settlement.” While Hogg has taken the position that the Court should not have gone beyond the legal question in its answer, the decision did lead to a compromise in the matter.

    The Patriation Reference is not a perfect analogy to the present situation on climate action and a carbon tax, but it does illustrate the need on rare occasions for a court to look beyond the four corners of the statute and at the matters which brought about the litigation.

    While opportunity for innovative action by the court in Saskatchewan is moot, it is still present with the Ontario Court of Appeal. The federal government could be found to have the authority to establish national standards and the provinces working with each other and the federal government determine how these standards are to be implemented. The important matter is the achievement of the overall goal; reduction in GHG emissions by the most effective means, whatever that may be, in each jurisdiction which together allow Canada to reach its goal.

    Hopefully the Ontario Court of Appeal will provide a path to do just that.


    To Come

    --today, federal byelection in Nanaimo-Ladysmith—maybe a surprise!

    --today, the federal government to announce an increase in Canada Child Benefit payments

    --today, Bank of Canada Governor Poloz delivers a speech in Winnipeg

    --March 7, international trade numbers for March to be released

    --March 8, Ms. Meng appears in a Vancouver Court

    --March 10, building permit numbers for March to be released

    --March 10, job numbers for April to be released--bc 

    Topics: Morning Brief

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