Canada: View From The Prairies: Saskatchewan's Top Court Upholds Federal Carbon Price & Carbon Policy Update From Alberta

Last Updated: June 14 2019
Article by Canadian ERA Perspectives

Most Read Contributor in Canada, August 2019

As the political rhetoric on carbon pricing [rages on], the Saskatchewan Court of Appeal recently delivered a much-anticipated decision in response to the reference question posed by the Saskatchewan government pursuant to The Constitutional Questions Act, 2012 (SS 2012, c. C-29.01). In particular, the province asked the Court for a legal opinion on the following question:

The Greenhouse Gas Pollution Pricing Act was introduced into Parliament on March 28, 2018 as Part 5 of Bill C-74. If enacted, will this Act be unconstitutional in whole or in part?

In a 3-2 decision, the Court upheld the constitutionality of the federal Greenhouse Gas Pollution Pricing Act (GGPPA) on the basis that the legislation falls within the scope of the federal government's "Peace, Order and Good Government" (POGG) authority. In its decision, the Court took a classic approach to Canadian federalism, which seeks to balance power between the two orders of government in a way that ensures unity (federal order), while allowing for the expression of diversity (provincial order). This is consistent with the approach that is used to manage health and social programs.

While the dissenting judges found that the GGPPA did not meet constitutional requirements, both the majority and dissenting judges agreed that the federal government has the constitutional power to price carbon – where they diverged was the constitutional basis for that federal power. Both the majority and dissenting judges also pointed out that carbon pricing has been proven to be effective and that all levels of government must take action on climate change.

Background to the Reference Case

The GGPPA came into force on June 21, 2018 and sets out the regulatory framework for the federal carbon pricing backstop system, which consists of two components: (i) a fuel levy, and (ii) an output-based pricing system (OBPS) for large industrial emitters. More information on the mechanics of the federal backstop program and its application to the backstop jurisdictions is available in our earlier blogs. The purpose of the GGPPA is to ensure there is a minimum national price on greenhouse gas (GHG) emissions to spur emission reductions across the economy. Part 1 of the GGPPA imposes a levy on GHG-producing fuels and combustible waste, while Part 2 implements the OBPS.

Under the Constitution Act, 1867, the federal and provincial governments have shared jurisdiction over environmental matters. This means that each level of government can legislate in relation to issues such as GHG emissions, provided that the federal and provincial governments stay within their prescribed areas of authority.  Saskatchewan challenged the GGPPA on the following basis:

  • The GGPPA imposes taxes in the constitutional sense of the term. While Parliament enjoys broad taxing authority, Saskatchewan argued that the Act is invalid because the Governor in Council determines the provinces in which it operates. As a result, this offends the principle of federalism in that the application of the GGPPA depends on whether a province has exercised its own jurisdiction in relation to pricing GHG emissions to a standard considered appropriate by the Governor in Council.
  • The GGPPA runs afoul of section 53 of the Constitution Act, 1867, which requires that taxes be authorized by legislative bodies rather than by executive government (or otherwise).

By way of alternative argument, Saskatchewan submitted that the GGPPA is unconstitutional because it is concerned with property and civil rights and other matters of a local nature that fall within the exclusive legislative authority of the province.

The federal government responded by seeking to uphold the GGPPA as a valid exercise of Parliament's jurisdiction under the national concern branch of its POGG power, which applies to matters of national consequence that have a singleness, distinctiveness and indivisibility clearly distinguishing them from matters coming within provincial jurisdiction. In particular, Canada argued that it should be recognized as having jurisdiction over the "cumulative dimensions of GHG emissions".

The Court noted that the science of climate change and the impacts of anthropogenic emissions of GHG emissions as summarized in the Climate Change 2014 Synthesis Report Summary for Policymakers (prepared by the Intergovernmental Panel on Climate Change) were not contested or challenged by any of the participants in the case.

Key Findings of the Court

The majority of the Saskatchewan Court of Appeal rejected Saskatchewan's arguments. In particular, it held that the principle of federalism is not a free-standing concept that can override an otherwise validly enacted law. Rather, the Court said that it is value to be taken into account when interpreting the Constitution. On the issue of section 53, the Court held that Saskatchewan's argument cannot be sustained because, in constitutional terms, the levies imposed by the GGPPA are regulatory charges, not taxes. The Court went on to say that even if these levies were taxes, the GGPPA does not offend section 53 because Parliament has clearly and expressly authorized the Governor in Council to decide where the Act will apply.

On the issue of POGG, while the Court rejected the federal government's argument on the basis that it would hamper and limit provincial efforts to deal with GHG emissions, the Court held that Parliament does have authority over a narrower POGG subject matter, i.e. the establishment of minimum national standards of price stringency for GHG emissions. By establishing minimum standards of stringency for GHG pricing, the scope and reach of federal power is minimized, thus leaving the provinces with room to tailor GHG legislation to their circumstances. Based on the foregoing, the Court concluded that the GGPPA is "constitutionally valid because its essential character falls within the scope of this POGG authority".

A number of intervenors in the case suggested that the GGPPA can be sustained under such federal heads of power such as trade and commerce, the emergency doctrine, criminal law and treaty powers. Ultimately, the Court found that none of these arguments are viable in light of how Parliament chose to frame the legislation.

The Dissenting View

The two dissenting judges came to a different conclusion than the majority. In particular, they found that:

  • Part 1 of the GGPPA (dealing with the carbon levy) is an unconstitutional delegation of Parliament's law-making power under section 91(3) of the Constitution Act, 1867 and is contrary to section 53 of the Constitution Act, 1867.
  • Part 1 of the GGPPA (dealing with the carbon levy) is a tax, and not a regulatory charge. Since the tax does not apply uniformly across Canada, it does not meet the constitutional requirements of the tax power. The minority said that the carbon levy was not properly drafted as a tax, at least in constitutional terms (since the carbon levy was designed as a regulatory charge). The dissenting judges did make it clear that Parliament could enact a carbon price if it designed the law as a tax. The minority held that Part 2 of the GGPPA is a regulatory charge.
  • Although the GGPPA is unconstitutional, the dissent made it clear that Parliament could enact a carbon price if it is designed as a tax and that it can regulate GHG emissions under its criminal law power.
  • The GGPPA cannot be sustained under POGG because setting national standards is not a narrow power; it is a broad power to regulate GHG emissions. The minority said the real issue is that the federal government does not agree with the provincial approach and stringency.

In their decision, the dissent reiterated two points: (i) that all levels of government in Canada must take action to address climate change – anthropogenic emission of GHGs is an issue of pressing concern to all Canadians and the world; and (ii) Parliament has a number of constitutional powers, legislative means and administrative mechanisms at its disposal to achieve its objectives in this regard. The dissenting judges went on to say that federalism in Canada means that all governments of Canada must bring all law-making power to bear on the issue of climate change, but in a way that respects the divisions of power under the Constitution.

Looking Ahead

Saskatchewan has announced its intent to appeal the Court of Appeal's decision to the Supreme Court of Canada. Ontario had launched a similar constitutional challenge of the federal backstop, which was heard by the Ontario Court of Appeal in April 2019. A decision is expected shortly. It is anticipated that whatever the outcome, the decision will also be appealed to the Supreme Court of Canada. Manitoba has also launched a legal challenge of the federal backstop, which consists of two components: (i) a constitutional challenge, and (ii) a judicial review of the decision of the federal government to impose the federal backstop in Manitoba. Finally, the new United Conservative Party (UCP) in Alberta recently announced that it will launch its own constitutional challenge of the federal backstop.

Carbon Pricing Update from Alberta

During the recent Alberta election campaign, the UCP pledged to eliminate the carbon tax that had been implemented by the previous NDP government under Rachel Notley. On May 22, 2019, Alberta Premier Jason Kenney introduced Bill 1 – An Act to Repeal the Carbon Tax, which will repeal the Climate Leadership Act (and the carbon levy enacted under it) effective May 30, 2019.  Federal Environment Minister Catherine McKenna has announced that once Alberta repeals its carbon levy, the federal backstop will be applied as soon as possible. 

It should be noted that Bill 1 does not affect the Carbon Competitiveness Incentive Regulation (CCIR, enacted under the Climate Change and Emissions Management Act), which sets out the carbon pricing regime for large industrial emitters. The Alberta government has indicated that it plans to release a climate change plan later this summer, which is expected to modify the CCIR, including lowering the compliance price from $30 to $20/tonne, and directing the revenue to fund technology initiatives (rather than using the proceeds to invest in low-carbon initiatives and lower other taxes). The program will also be renamed the Technology Innovation and Emissions Reduction regime. The Alberta government has not provided any indication whether the carbon price for large emitters will increase in line with federal requirements. In any case, it appears that Alberta will become a backstop jurisdiction, at least in part.  Stay tuned for further developments.

To view the original article click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions