Ottawa’s Carbon Pricing Ruled Constitutional

By Ben Hamill - March 27 2021

Ottawa’s Carbon Pricing Ruled Constitutional

Now that Canada’s Supreme Court has ruled the federal Liberal government’s carbon pricing approach as being fully in line with the country’s constitution, Ottawa will be at full liberty to forge ahead with its plan of ensuring that every province and territory imposes a price on carbon for the curbing of the emission of greenhouse gasses.

Several provinces, including Ontario, Saskatchewan, and Alberta, have vehemently opposed the imposition of carbon tax while attempting to lean on the argument that natural resources fall under the provinces’ jurisdiction under the larger umbrella of the Constitution. Chief Justice Richard Wagner has however ruled that federal government is indeed well within its constitutional right to impose minimum pricing standards. Justice Wagner supported his ruling by saying the threat of climate change fully justified a strategic and coordinated national approach instead of a provincial game of tug-and-pull.

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Ottawa To Stand On POGG

Wagner furthermore ruled that Ottawa can act under the Constitution’s so-called “peace, order and good government” principle, which clause is better known as POGG. This bestows upon federal government the authority to pass certain laws aimed at dealing with those issues known to affect and concern Canada as a country.

The POGG principle applies whenever there exists an inability on the part of the provinces to deal with country-wide matters, and more specifically, whenever there is a general failure to co-operate by one or more. POGG is therefor deemed fully justified when this failure to co-operate leads to the inability of other provinces to successfully deal with a challenge of national importance.

Justice Wagner also said that a patchwork or tug-and-pull approach would only create a major hurdle for the country’s larger fight against the effects of climate change.

Significant Tax Hikes Expected

According to Wagner, his interpretation of federal government’s Greenhouse Gas Pollution Pricing Act leads him to the conclusion that there exists no explicit ruling in as far as how provinces and territories are supposed to put a tax-price on carbon emissions – only that it should be done.

Federal government in 2018 passed legislation intended to reduce the emission of greenhouse gasses to the extent that Canada is able to meet its commitments within the context of its Paris climate accord. Ottawa as part of that particular legislation then proceeded to publish national pricing standards for the purpose of significantly reducing the use of fossil fuels.

The current rate of $40/tonne is expected to undergo a significant price-hike over the next decade.

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