You can agree with carbon taxes in principle and still be troubled by federal incursion into provincial jurisdiction – and cabinet ignoring the legislature
Carbon tax advocates and the federal government are probably still celebrating the recent decision of the Saskatchewan Court of Appeal in favour of federal carbon pricing (The Greenhouse Gas Pollution Pricing Act). Those, like me, concerned about keeping the balance of power in our federation properly adjusted, are not.
After all, as the court put it, “Put simply, an unqualified jurisdiction in relation to such emissions would lead Parliament deeply into areas of historically exclusive provincial authority,” and, “federal initiatives must not be allowed to intrude so heavily into the provincial domain as to distort the basic shape of Canadian federalism.”
It doesn’t matter how brilliant (or otherwise) a carbon tax is, the federal government cannot take over provincial authority.
That is the foundation of our federation, enshrined in our founding documents.
The court was right to worry about federalism. To lead to its rightful conclusion, if the federal government can impose carbon pricing, it can reach into every single aspect of our lives: how we heat our homes, what kind of vehicles we drive, whether we put wood into a fireplace, highway speeds, building standards, livestock operations. All these things relate to CO2 emissions. And regulation of them by the federal government would be the end of federalism.
In fact, because only one government can occupy this territory, provincial carbon tax laws would thus become unconstitutional.
At this point, following this logic, the court could well have ruled unanimously in Saskatchewan’s favour, and against Canada’s carbon pricing. That would have been a fatal blow to the federal legislation.
The federal lawyers and Canada were bailed out by British Columbia.
In its enthusiasm for carbon taxes, BC had regrettably decided to enter the fray. Regrettably, because in doing so BC spoke in support of decreased provincial authority and increased federal power.
BC argued that what the federal government was doing was not a tax at all, merely setting minimum national standards of price stringency for GHG emissions. This, they argued, is within federal authority and constitutional.
The majority of the court gratefully jumped on that reasoning and ruled in favour of the federal government.
The minority of the court said (in effect) that this was dancing on the head of a pin. They were right.
Although the federal/ provincial division of power was the main issue before the court, it was not the only one. The majority and the minority disagreed on another matter. The majority said carbon pricing is a regulatory charge and, because of the arguments above, is constitutional.
The minority said carbon pricing is a tax and were scathing in their criticism of the regime. It is fundamental that taxes and spending be placed before the legislature and approved by that body. Only the legislature, made up of elected representatives, has taxing authority.
In the carbon pricing regime set out in the Act, however, all kinds of powers and decisions are delegated to cabinet. Not good enough, said the minority decision. Cabinet cannot be the taxing authority – only the legislature.
In finding the Act created a tax, a tax which was both invalid and unsupportable under constitutional law, the minority would have disallowed the Act and supported Saskatchewan’s position. Their reasons had much to recommend them, in my view.
So the celebrations may be short lived. The Ontario Court of Appeal recently heard a similar set of arguments and will make its ruling in due course.
Other governments may follow. The carbon tax no longer has widespread provincial government support in Canada. All decisions will likely be appealed to the Supreme Court of Canada. The Greenhouse Gas Pollution Pricing Act debate is far from over.
Suzanne Anton, QC, is a former Minister of Justice and Attorney General of British Columbia and a former Vancouver City Councillor