Introduction
On March 25, 2021, the Supreme Court of Canada (the “SCC”) released its decision in Reference re Greenhouse Gas Pollution Pricing Act, upholding the constitutionality of a federal law establishing minimum national standards for carbon pricing in Canada.[1] The SCC’s ruling will allow the federal government to move forward with its plan to ensure each Canadian province and territory has a price on carbon to curb greenhouse gas (“GHG”) emissions, helping Canada meet its emission targets under the Paris Climate Agreement.[2]
In its decision, the SCC ruled that the Greenhouse Gas Pollution Pricing Act (the “GGPPA”) is constitutional because the law is within the federal government’s jurisdiction to legislate in relation to matters of national concern, under the federal “peace, order, and good government” power (the “POGG Power”) of Canada’s Constitution Act, 1867 (the “Constitution”).[3] The governments of Alberta, Ontario and Saskatchewan had challenged the GGPPA’s constitutionality for encroaching on the provincial power to legislate over their natural resources.
The GGPPA
The GGPPA is a federal law which aims to put a price on GHG emissions in Canada through binding “minimum national standards” on Canada’s federal government and its provinces and territories. The pricing standards are divided in two parts: a regulatory charge on carbon-based fuels and an output-based emissions trading system for polluting industries.
The GGPPA requires that all provincial and territorial governments establish a pollution pricing scheme that meets the national minimum price per tonne of carbon dioxide equivalent and establish emission caps. A federally managed backstop system under the GGPPA would apply in provinces or territories that do not have a system that meets the criteria or if the province or territory requests the federal system be used.
Procedural History
The governments of Alberta, Ontario, and Saskatchewan each challenged the constitutionality of the GGPPA, submitting the matter to their provincial courts of appeal. The Alberta Court of Appeal held the GGPPA to be unconstitutional on the basis the legislation exceeded the federal jurisdiction.[4] In contrast, the Saskatchewan Court of Appeal and the Ontario Court of Appeal held that the GGPPA was within the federal legislative jurisdiction.[5] Both Ontario and Saskatchewan appealed their respective appellate courts’ decisions to the SCC.
The SCC’s Decision
The majority in Reference re Greenhouse...
