The Supreme Court of Canada has upheld the Trudeau government’s national carbon pricing scheme.
The decision was rendered Thursday, March 25, one week before B.C.’s carbon tax is set to rise by $5 next week to $45 per tonne, and the federal tax by $10 to $40 per tonne.
Both federal and provincial taxes increase annually on April 1.
Not that the ruling matters much for B.C, which has had a carbon tax since 2008, although it may become more of an issue when B.C. is forced to start matching the stringency of the federal carbon tax.
But it does matter for provinces like Saskatchewan and Ontario that hoped to have a federal carbon tax ruled unconstitutional.They argued the tax infringes on the province’s right under Canadian federalism to regulate provincial affairs.
The federal Greenhouse Gas Pollution Pricing Act (GGPPA),was challenged by the provinces of Ontario, Saskatchewan and Alberta as jurisdictional overreach.
In its ruling today, the Supreme Court ruled: “The GGPPA is constitutional. It sets minimum national standards of GHG price stringency to reduce GHG emissions. Parliament has jurisdiction to enact this law as a matter of national concern under the peace, order, and good government.”
Today's decision is being hailed by environmental groups as an important victory in the fight against climate change.
"Canada has the most ambitious economy-wide carbon pricing system in the world," said Michael Bernstein, executive director for Clean Prosperity. "Today’s court decision leaves that system intact.”
The only way the federal tax can be undone now is if the Conservative Party were to form government in the next federal election. Conservative Party Leader Erin O'Toole has said he would scrap the federal tax, although he would leave it in place for heavy emitters.
Alberta Premier Jason Kenney said he is disappointed with today’s decision, and committed to consulting Albertans and other provinces on how to minimize the impact of the tax on Albertans.
"Obviously, while we are disappointed with this decision, we have to respect that it's a majority decision of the Supreme Court of Canada," he said.
He cited an earlier Alberta Appeal Court decision that called the federal tax a “constitutional Trojan horse” that could see ever more intrusion by the federal government into provincial affairs.
He noted that the federal government has accepted "far less costly emisions policies in other provinces," notably Quebec, where Kenney said the province's cap-and-trade scheme has priced carbon emissions at $20 per tronne, compared to the federal carbon tax of $40 per tonne.
Whether that means Kenney plans to pursue some alternative carbon pricing scheme remains to be seen.
“We’ll also listen to and consult with Albertans and our allied provinces on our next steps on the carbon tax,” he said. “We will do everything in our power to minimize the cost in Albertans and our trade exposed industries that must compete globally.”
One issue that the B.C. government may need to wrestle with at some point is the question of rebates. Some British Columbians get carbon tax rebates, based on income. But they are generally lower than the rebates citizens in places like Saskatchewan get under the federal program. On the other hand, in Quebec, which has a cap-and-trade system, citizens there get no rebates at all.
