In Saskatchewan this week, the first of two reference cases to challenge federal jurisdiction over climate change is going to court. The two cases, brought by the governments of Saskatchewan and Ontario respectively, both involve the federal Greenhouse Gas Pollution Pricing Act. The key aim of the Act is to impose a federal carbon price for provinces that either do not have one at all, or who have developed a carbon price that does not meet the minimum federal requirements. The federal pricing mechanism distinguishes between large industrial emitters and emissions that result from the use of gasoline, heating oil and similar uses at the individual level. The price imposed on individuals starts at $10 per ton and goes up to $50 by 2022. Notably, most of the revenues generated will be returned to citizens on the basis that the price will encourage individuals to reduce emissions where they can, and the rebate will compensate them for the additional cost, while still creating an incentive to reduce emissions where possible.
The province of Saskatchewan is going to court to argue that the federal carbon pricing backstop is an invasion of provincial jurisdiction. The case has attracted an unprecedented number of intervenors, with almost 20 in support of the federal position and 6 in support of Saskatchewan’s position. The immense interest in this case is not surprising. Constitutional arguments have been at the center of efforts to undermine strong environmental laws in Canada for a long time. Some have been resolved through court cases, cases which the federal government has mostly won. Others, such as the jurisdiction of the federal government to regulate greenhouse gas emissions, have lingered in the background of efforts at federal-provincial cooperation on this issue for the last two decades. As I have explored in previous posts, we have gone through cycles of federal leadership with provincial resistance, followed by federal apathy with some provinces leading the way. Questions over the limits of federal jurisdiction to deal with climate change have brewed below the surface every time the federal government has sought to lead on this issue. This, however, is the first time the legal issue is going to court.
There is such broad interest in this case, because the stakes are high. In the past two decades of lack of effective cooperation and action on climate change, we have lost valuable time in ensuring a smooth and just transition to a carbon free world. The longer these battles continue, the less we will be able to take advantage of the economic opportunities associated with the transition, the more our economy will suffer from the unplanned and abrupt loss of the jobs of the past, and the harder the transition will be for the workforce that currently relies on jobs in sectors in need of transition.
There are different ways the court can resolve the case. It may just decide narrowly whether the federal government has jurisdiction to implement the specific carbon pricing backstop it has introduced through the Greenhouse Gas Pollution Pricing Act. It could, however, also answer more general questions about federal jurisdiction over climate change. This is in part because the federal government has a number of arguments it can make. They include the federal government’s power over taxation, the federal criminal law power, and the power of the federal government to legislate in case of matters of national concern and emergencies. Some of these federal powers offer opportunities to clarify that the federal government has broad powers to regulate greenhouse gas emissions. Declaring climate change to be a matter of national concern or an emergency would be a way for the court to grant broad powers to the federal government. Federal powers to regulate greenhouse gas emissions would be more narrow if the court decided to grant federal jurisdiction using the federal taxation power or the criminal law power.
What is least likely is that the courts will depart from the well-established principle of cooperative federalism in dealing with this case by holding the federal government has no power to regulate greenhouse gas emissions. The court will be looking for ways to ensure the federal government has the legislative power to deal with climate change, while not excluding provinces from sharing this responsibility. One way to do that would be for the court to limit the federal power to a specific tool, such as the taxation power or the criminal law power. Another option for the court would be to grant broad federal jurisdiction based on federal national concern or emergency powers, but to clarify that those powers do not take away from the ability of provinces to also regulate the same activities.
A final option would be for the courts to reverse old case law in Canada and decide that the federal government has the power to implement international treaties, such as the Paris Climate Agreement. This would bring Canada in line with countries with similar constitutions, such as Australia, and avoid jurisdictional squabbles over the implementation of Canada’s international commitments and obligations.
Ultimately, whatever the specifics of the outcome, there is every reason to expect that the guiding principle for the courts will be cooperative federalism. This was emphasized most recently in the Orphan Wells decision of the SCC on the relationship between federal bankruptcy law and provincial environmental regulation, and it is a point the SCC has made again and again on environmental cases over the past few decades. The courts will be looking for ways to ensure both levels of government have the ability to address climate change, the greatest environmental emergency of our time. It is hard to see how a court will find that the federal government, after 20 years of efforts at a common approach, was unreasonable in imposing a carbon price on provinces unwilling to set their own.
The stakes are high, but the court, with the active involvement of well over 20 intervenors from all segments of Canadian society, has the opportunity in this case to remove a long-standing barrier to the effective regulation of greenhouse gas emissions, and thereby ending a two decade long stalemate on one of the most critical issues facing Canada and the world.
Professor, Schulich School of Law