On June 28, 2019, the Ontario Court of Appeal released its much-anticipated ruling on the constitutionality of the federal Greenhouse Gas Pollution Pricing Act (GHGPPA). It is the second reference case involving this Act, following the previous Saskatchewan Court of Appeal ruling that the Act was a valid federal exercise of jurisdiction under the national concern branch of POGG. Both cases, while also dealing with other issues (such as whether the pricing mechanism amounts to a tax, or whether it may be justified under the emergency branch of POGG), focus on the question whether greenhouse gas (GHG) emissions, or some other appropriate subject matter, meet the national concern test under POGG so as to grant the federal government jurisdiction to pass the GHGPPA. The Saskatchewan case upheld the GHGPPA on the narrow basis that the pith and substance of the Act is the “establishment of minimum national standards of price stringency for GHG emissions”.
With the two cases clearly heading to the SCC in December, 2019, a key question with respect to the Ontario Court of Appeal is whether it offers any new perspectives on the application of POGG’s national concern branch to GHG emissions. Ultimately, the short answer to this question is yes. The decision offers three perspectives on how the POGG national concern analysis should be carried out. One of the three follows the majority of the Saskatchewan Court of Appeal. The other two offer new perspectives that may be helpful to the SCC as it grapples with the issue.
There is little doubt that the applicable test for the national concern branch of POGG is as set out by Le Dain J. in the SCC decision in Crown Zellerbach, at pp. 431-32:
1. The national concern doctrine is separate and distinct from the national emergency doctrine of the peace, order and good government power, which is chiefly distinguishable by the fact that it provides a constitutional basis for what is necessarily legislation of a temporary nature;
2. The national concern doctrine applies to both new matters which did not exist at Confederation and to matters which, although originally matters of a local or private nature in a province, have since, in the absence of national emergency, become matters of national concern;
3. For a matter to qualify as a matter of national concern in either sense it must have a singleness, distinctiveness and indivisibility that clearly distinguishes it from matters of provincial concern and a scale of impact on provincial jurisdiction that is reconcilable with the fundamental distribution of legislative power under the Constitution;
4. In determining whether a matter has attained the required degree of singleness, distinctiveness and indivisibility that clearly distinguishes it from matters of provincial concern it is relevant to consider what would be the effect on extra-provincial interests of a provincial failure to deal effectively with the control or regulation of the intra-provincial aspects of the matter.
As was the case in previous environmental cases that considered the national concern test under POGG, a critical issue in the analysis of all three judgements by the Ontario Court of Appeal (two for the majority, one dissenting judgement) was how they define the “subject matter” to which they then proceed to apply the Le Dain test.
• Minimum standards to reduce GHG emissions (Strathy C.J.O.)
• Minimum national GHG emissions pricing standards to reduce emissions (Hoy A.C.J.O.)
• GHG emissions (Huscroft, J.A.)
The majority (Strathy C.J.O., Hoy A.C.J.O., MacPherson, and Sharpe JJ.A.), in two separate judgements, applies the first two subject matters to the Le Dain test to conclude that the federal government has jurisdiction under the national concern branch of POGG to enact the GHGPPA. The dissenting judge, Huscroft, J.A., applies the third subject matter to conclude that the federal government does not have jurisdiction under POGG to enact the GHGPPA.
The choice of subject matter, of course, has important implications. It drives the POGG analysis with respect to the third and fourth part of the Le Dain test, and has particular implications for the singleness, distinctiveness, and indivisibility test and the impact on the distribution of power between federal and provincial governments. A more narrowly defined subject matter will more easily pass the requirements of the POGG test. At the same time, however, the choice of subject matter also has implications for the ultimate ability of the federal government to take effective measures to control GHG emission in Canada. The more narrowly defined the subject matter, the more limited the federal power to control GHG emissions.
In this post, I briefly explore the implications of this fundamental choice, and offer some perspectives on the choices made and the analysis applied, particularly with respect to parts three and four of the Le Dain test in the three sets of reasons offered by the Ontario Court of Appeal.
Strathy C.J.O. concludes that the subject matter that offered the most appropriate basis for the POGG analysis was “the setting of minimum national standards to reduce GHG emissions”. He differs from the Saskatchewan majority ruling in defining the subject matter more broadly than the specific subject matter of the GHGPPA. The starting point for this determination is the pith and substance of the legislation being challenged. Clearly the pith and substance is setting a minimum national price for carbon. While the Saskatchewan Court of Appeal proceeded to also accept this as the subject matter for purposes of the POGG analysis, it is clear from the case law that this is not necessary, and that the question of the subject matter is a separate determination that flows from, but is not prescribed by the determination of the pith and substance of the impugned Act.
Having selected minimum national standards for GHG emission reduction efforts, the majority then went on to conclude that this subject matter met the third and fourth parts of the Le Dain test.
Hoy A.C.J.O., who agreed with Strathy C.J.O. and the rest of the majority on the ultimate outcome, reached her conclusion on the basis of the same subject matter as the Saskatchewan Court of Appeal. She appears to apply the narrower subject matter based on case law that has suggested that the subject matter should be defined as narrow as reasonably possible to prevent unnecessary intrusion into provincial areas of jurisdiction. Having selected the narrow subject matter of setting a minimal national carbon price, she had little difficulty concluding that the subject matter met the third and fourth parts of the Le Dain test.
The dissenting judge, Huscroft, J.A., applied the broadest subject matter, and proceeded to conclude that the GHGPPA was not valid federal law. He defined the subject matter to be the reduction of GHG emissions. He did so on the basis that the reference to minimum national standards and a minimum national carbon price went beyond defining a subject matter to defining the tools that could be used to address the subject matter. Huscroft, J.A. concluded that while it was appropriate to seek to define the subject matter narrowly to avoid any unnecessary intrusion into provincial areas of jurisdiction, this did not allow the court to define the subject matter with reference to a particular method or other tool to address the subject matter.
Having concluded that the subject matter is the reduction of GHG emissions, Huscroft, J.A. concluded that this subject matter did not meet parts three and four of the Le Dain test. He did so on the basis that the reduction of GHG emissions does not have a sufficient singleness, distinctiveness and indivisibility to be a federal head of power separate from existing provincial heads of power, and that the scale of impact on provincial jurisdiction was not reconcilable with the distribution of powers under the Constitution. In other words, the impact on provincial jurisdiction of granting exclusive federal jurisdiction over the subject matter in question was too high.
The case raises three key questions with respect to the application of the POGG test to GHG emissions:
1. What is most the appropriate way to choose the subject matter for purposes of the POGG test?
2. How should the court determine whether the subject matter meets the singleness, distinctiveness and indivisibility requirement under part three of the Le Dain test?
3. How should the court determine whether the scale of impact on provincial jurisdiction is reconcilable with the distribution of powers under the Constitution?
With respect to the first issue, the reasoning of justice Huscroft has some attraction. It certainly does seem preferable to narrowing the federal government’s ability to address the subject matter to the single issue of carbon pricing. The more difficult question is whether justice Huscroft is correct in suggesting that limiting the subject matter to setting minimum national standards of efforts to reduce GHG emissions more broadly is also an inappropriate way to narrow the subject matter. What is interesting is that he criticizes the majority for narrowing the subject matter by limiting the tools at the federal government’s disposal, while at the same time criticizing Strathy C.J.O. for not specifying the type of standard. A reasonable interpretation of the subject matter defined by Strathy C.J.O. is that it actually addresses Huscroft’s concern, as it narrows the scope of the subject matter to setting minimum national standards of mitigation, but it does not limit what the federal government can do, as it does not limit what type of standard the government can set. Rather than limiting the tools available, as the focus on carbon pricing would do, justice Strathy’s reasoning allows the federal government to use any tool, but only for the purpose of setting minimum standards, thereby allowing flexibility for provinces on how to meet the standard, and, perhaps more importantly, to exceed the standard. Under the subject matter as defined by Strathy, the government can set a minimum carbon price, or any one of a range of emission, efficiency, performance, or technology standards.
Presumably, it would also be within the range envisaged by justice Strathy for the federal government to set a carbon budget for each province, and leave it to each province to determine how to stay within the budget. This was raised by the court in oral arguments, with the lawyer for the province of Ontario suggesting he had less difficulty with such an approach than with the approach in the GHGPPA. By defining the subject matter as the power to set minimum national standards of mitigation, Strathy C.J.O. has given the federal government the tools to ensure emissions are reduced sufficiently to meet international commitments or otherwise ensure Canada makes a fair contribution to the global effort, while allowing the provinces still lots of room to act in the field of GHG emission reductions.
In short, while perhaps a bit more difficult to defend in light of the details of the legal test as expressed by Le Dain in Crown Zellerbach, the approach taken by Strathy C.J.O. appears most consistent with cooperative federalism, and with the underlying goals of the Le Dain test of ensuring the federal government can act on subject matters of national concern that provinces individually are unable to address effectively. It is also consistent with La Forest’s urging in R. v. Hydro Quebec of a flexible approach to the interpretation of the division of powers to ensure both levels of government have the ability to address what he called “one of the great challenges of our time”. Strathy C.J.O. eloquently points out the need for national jurisdiction over the level of effort by pointing to the discrepancy between emissions and impacts felt in some provinces and the territories.
Strathy C.J.O. and Hoy A.C.J.O. take a similar approach to the application of the Le Dain test to the subject matter. The approach seems sound, as is the conclusion that the subject matter as they have defined it meets the test. This leaves the question whether justice Huscroft’s approach, applying the broader subject matter of GHG emissions, is sound. His reasoning on the singleness, distinctiveness and indivisibility of the subject matter is difficult to follow. As is the case with other decisions on this part of the Le Dain test, he seems to be confusing the singleness, distinctiveness and indivisibility with the impact on provincial powers. A factual comparison with the Crown Zellerbach case is helpful here. In that case, justice La Forest for the dissent pointed to the difficulty of separating marine pollution from fresh water pollution, given that the transition from fresh to marine waters in river estuaries is very gradual. There is no similar difficulty in delineating GHG emissions. Through the UN climate regime, there is clarity on the 6 gases that are included. As a result, the subject matter is easy to delineate and separate from other subject matters.
The impact on provincial jurisdiction would appear to be the real issue. It is unfortunate that none of the three separate reasons actually carry out a detailed analysis. While the majority can be excused for not going into too much detail, as the outcome seemed clear based on their narrower definition of the subject matter, justice Huscroft really needed to deal with the issue given his broader definition of the subject matter. As clear from the oral arguments before the court, no current conflict was ever identified. No examples of a potential future conflict were discussed by justice Huscroft in his reasons. Rather, he seems to assume that because GHG emissions are connected to most human activities, this necessarily meant that giving the federal government control over the reduction of GHG emissions would take away too much power from the provinces.
So what would the impact be? Under the double aspect rule, provinces could still regulate the many activities that contribute GHG emissions for other purposes, such as air pollution or economy or social considerations. What the province could not do is to take action to ensure activities that violate federal GHG rules can still go ahead. More concerning, under justice Huscroft’s definition of the subject matter, provinces might not be able to pass stricter GHG emission reduction laws than those imposed by the federal government, unless they could do so using the double aspect principle or the SCC deviates from the current understanding that the national concern branch of POGG creates exclusive federal jurisdiction. That is the real problem with the broader subject matter applied by justice Huscroft.
The SCC has two reasonable options. It can accept the majority’s approach and define the subject matter as setting minimum standards for GHG mitigation action. Alternatively, it can apply the broader subject matter suggested by the dissent, and clarify that the national concern branch of POGG does not create exclusive federal jurisdiction, but permits provinces to continue to legislate subject only to federal paramountcy. Either approach would result in both levels of government retaining the ability to contribute to addressing the climate crisis, and both approaches would be consistent with the cooperative federalism model, and with justice La Forest’s plea in R. v. Hydro Quebec for pragmatic application of constitutional law principles in the environmental field.
Professor, Schulich School of Law
Canadian Chair, Marine Environmental Protection, World Maritime University, Malmö, Sweden