Constitutional Law and the Politics of Carbon Pricing in Canada
Which level or levels of government can regulate greenhouse gas (GHG) emissions under the Canadian constitution? In a new study published by the Institute for Research on Public Policy, “Constitutional Law and the Politics of Carbon Pricing in Canada”, I argue that this is one of the most difficult policy and constitutional issues Canada has ever faced.
Climate change is the greatest challenge now confronting humanity. A scientific consensus has emerged that GHG emissions reductions are necessary to stabilize global temperatures. For Canada to meet its GHG emissions reduction targets under the Paris Agreement will require significant reductions in carbon producing activities. But Canada’s provinces and territories vary considerably in per capita carbon emissions. A central question of Canadian climate politics is how to distribute the burden of GHG emissions reductions. What makes this political challenge even greater is that these variations are due to major structural differences in the economies of the provinces and territories.
For Alberta and Saskatchewan, GHG emissions reductions pose a fundamental economic challenge. Those provinces have decided to launch constitutional challenges against the Greenhouse Gas Pollution Pricing Act (GGPPA), the federal government’s legislation to reduce GHG emissions. Their goal is to gain leverage to renegotiate the framework for Canadian GHG emissions reductions. Moreover, the constitutional litigation should be seen as part of a larger strategy to promote the “carbon economy,” which is built on the extraction and processing of fossil fuels, the building of infrastructure to deliver them and the shipping of these products to foreign markets.
The Supreme Court of Canada will hear the Ontario and Saskatchewan cases in March 2020 as the Greenhouse Gas Reference. This will be one of most important cases the Supreme Court has ever heard.
The GGPPA sets a floor for carbon pricing across Canada, known as the benchmark. Jurisdictions that do not meet it are subject to the backstop. The backstop has two components: fuel charges and a cap-and-trade system for large industrial emitters. Fuel charges apply to all fuel delivered or used within a province or imported into a province. The cap-and-trade scheme subjects each facility that is not subject to the fuel charge to a carbon price (equal to the benchmark) on the portion of emissions above a facility emissions limit. The federal government has applied the backstop in Manitoba, New Brunswick, Ontario and Saskatchewan, and it intends to do so in Alberta.
There is a strong constitutional case to be made for the GGPPA. However, it is not the case that Canada has made thus far: that GHG emissions are a matter of national concern under the POGG power. That argument has been singularly unsuccessful — indeed, it was rejected by all 10 judges who have considered it, including those who upheld the GGPPA. The federal government should abandon it before the Supreme Court. Instead, it should justify the GGPPA on the basis of federal authority under the national dimensions branch of POGG to regulate the systemic risks posed by GHG emissions — that is, a self-reinforcing feedback loop in global warming that, once commenced, cannot be stopped.
Finally, for Canada to make this alternative argument persuasively, it will need to supplement its record to establish the systemic risk posed by GHG emissions. It must draw on the latest scientific research to provide evidence of a self-reinforcing feedback loop in global warming that cannot be stopped. Alternatively, the Supreme Court could require that such evidence be presented.
The Greenhouse Gas Reference is not the only occasion on which the Supreme Court of Canada will wade into this politically and constitutionally complex terrain. On January 16, 2020, it is scheduled to hear British Columbia’s appeal from a decision of its Court of Appeal that the province lacks constitutional authority to amend its environmental protection legislation to permit it to restrict or prohibit oil that would be shipped by the Trans Mountain pipeline expansion from crossing its territory. British Columbia has challenged Alberta legislation that would authorize Alberta to cut off its oil exports and has persuaded the Federal Court of Canada to issue an injunction to temporarily suspend this law. Alberta has launched a constitutional challenge to the 2019 federal Impact Assessment Act that could also end up before the Supreme Court.
These four cases — which will likely be joined by others — raise a set of complex constitutional issues in a highly politicized environment. They could define the Court’s legacy for a generation.
Download “Constitutional Law and the Politics of Carbon Pricing in Canada”.
Sujit Choudhry is a leading expert on the Canadian constitution and an internationally recognized authority on comparative constitutional law. He has written extensively on the Canadian Charter of Rights and Freedoms and federalism. He has advised on, and been involved in litigating, a broad range of constitutional matters, and appeared before the Supreme Court of Canada. The principal of choudhry.law, he is the founding director of the Center for Constitutional Transitions, which generates and mobilizes knowledge in support of constitution-building across the world.
