Jurisdictional Wrangling over Climate Policy in the Canadian Federation: Key Issues in the Provincial Constitutional Challenges to Parliament’s Greenhouse Gas Pollution Pricing Act
Nathalie J. Chalifour
Jurisdictional tensions are nothing Les tensions qui existent entre les gou- new in the Canadian federation, and vernements de la fédération canadienne they have often arisen in the context of ne sont certes pas nouvelles, souvent, environmental laws. Climate policy is elles s’aggravent dans le contexte des no exception. Parliament’s enactment lois environnementales. La politique of the Greenhouse Gas Pollution Pricing sur les changements climatiques ne Act (GGPPA) in 2018, which establishes fait pas exception. L’entrée en vigueur a country-wide minimum carbon price, de la Loi sur la tarification de la pollu- has raised the ire of some provinces, tion causée par les gaz à effet de serre two of which have challenged its (LTPGES) en 2018, qui a établi un tarif constitutionality. minimal sur le prix du carbone, a suscité In this paper, I examine three cen- la colère de certaines provinces, dont tral issues that the courts will need to deux d’entre elles qui ont contesté sa grapple with in the Saskatchewan and constitutionnalité. Ontario references cases. First, I analyze Dans le présent texte, j’examinerai the main basis of jurisdiction argued trois questions centrales auxquelles by Canada to justify the GGPPA: Parlia- les tribunaux devront s’attaquer dans ment’s authority to legislate for peace, les affaires renvoyées à l’arbitrage en order and good government (POGG) Saskatchewan et en Ontario. Première- under the national concern branch. In ment, j’analyserai le fondement principal particular, I address the argument made de la compétence telle qu’invoquée par le by the challenging provinces that con- Canada pour justifier laLTPGES : l’auto- ferring jurisdiction to Parliament over rité qu’a le Parlement de légiférer lorsque greenhouse gas (GHG) emissions as a la situation affecte la paix, l’ordre et le matter of national concern would effect- bon gouvernement (POBG) du Canada, ively displace provincial jurisdiction to selon la branche de la dimension legislate in relation to GHGs. Second, I nationale. Plus précisément, je réponds examine the prospects for justifying the à l’argument avancé par les provinces GGPPA under the emergency branch of ayant soumis une contestation, selon POGG, with an emphasis on the tem- lequel le fait de conférer au Parlement poral contours of this power. Third, I la compétence en matière d’émissions review the arguments characterizing de gaz à effet de serre (GES) en tant que the carbon price as a regulatory charge question d’intérêt national empiète sur versus a tax, and discuss an opportunity la compétence des provinces de légiférer the courts have to clarify the existing en matière de GES. Deuxièmement,
197 jurisprudential tests for appropriately j’analyserai les perspectives de l’invoca- characterizing behaviour-modifying eco- tion d’un état d’urgence pour justifier la nomic instruments like carbon pricing. LTPGES, selon la branche des pouvoirs These legal issues are quite inter- d’urgence de POBG, en mettant l’ac- esting, but they raise much broader cent sur les limites temporelles de ces questions about the balance of powers pouvoirs. Troisièmement, je passerai en in our federation and the ability of our revue les arguments qui définissent le Constitution to adapt to the stark and prix du carbone comme étant redevance humbling reality of climate change. règlementaire plutôt qu’une taxe, et dis- Effective climate policy requires decisive cuterai de l’occasion qu’ont les tribunaux action at all levels of government. If the de clarifier les critères jurisprudentiels courts decide that Parliament does not qui existent pour mieux catégoriser have the authority to enact laws aimed les instruments économiques pouvant at reducing the country’s overall GHG modifier le comportement comme la emissions, this will leave a gaping hole tarification du carbone. in Canada’s jurisdictional ability to meet Ces questions juridiques sont très its national and international climate intéressantes, mais elles soulèvent des commitments, and should give us pause questions beaucoup plus générales sur to think about whether the Constitution l’équilibre des pouvoirs au sein de notre is equipped to safeguard us through the fédération et sur la capacité de notre turbulent and uncertain years ahead in a Constitution de s’adapter à la dure et la warming world. triste réalité du changement climatique. Une politique efficace sur les change- ments climatiques nécessite des actions décisives à tous les niveaux de gouver- nement. Si les tribunaux décident que le Parlement n’a pas le pouvoir d’adopter des lois visant à réduire les émissions globales de GES du pays, ceci laisse un trou béant dans les compétences des autorités du Canada de respecter ses engagements nationaux et internatio- naux en matière de changement clima- tique, et devrait nous faire réfléchir à savoir si la Constitution sera en mesure de nous protéger au cours des années turbulentes et incertaines, à venir, dans un monde qui se réchauffe.
198 CONTENTS
Jurisdictional Wrangling Over Climate Policy in the Canadian Federation: Key Issues in the Provincial Constitutional Challenges to Parliament’s Greenhouse Gas Pollution Pricing Act Nathalie J. Chalifour, PhD
Introduction 5
I. Background and Context 10 A. Carbon Pricing in Canada 12 B. Summary of Arguments in the Provincial Constitutional References 15 1. Saskatchewan’s Arguments 15 2. Ontario’s Arguments 17 3. Canada’s Arguments 18
II. Key Issues in the Litigation 21 A. Can the Subject Matter of GHG Emissions be Justified as a Matter of National Concern Under Parliament’s Authority to Make Laws for Peace, Order, and Good Government? 21 1. Are GHG Emissions a Matter of National Concern? 24 2. Are GHG Emissions Sufficiently Single, Distinct, and Indivisible? 25 3. Is the Scale of Impact on the Provinces Reconcilable With the Distribution of Powers in the Constitution? 29 a. Proper Characterization of the Subject Matter 30 b. Exclusivity 32 c. Scale of Impact of Federal Regulations on GHG Emissions 39 B. What Are the Contours of “Temporary Measures” in the Context of POGG’s Emergency Branch, Given the Planetary and Geological Scale of Climate Change? 41 1. A Climate Emergency? 42 2. Is the GGPPA a Temporary Measure? 44 C. Will the Courts Clarify Their Criteria for Distinguishing Between Regulatory Charges and Taxes to Take Better Account of Economic Instruments Such as Carbon Pricing for Constitutional Purposes? 47
199 1. Is the Carbon Price a Tax or a Regulatory Charge? 49 2. Is the Carbon Price Connected to a Regulatory Scheme? 50 a. Step 1: Is There a Relevant Regulatory Scheme? 50 d. Step 2: Is There a Relationship Between the Regulatory Charge and the Regulatory Scheme? 51
Conclusion 55
200 Jurisdictional Wrangling Over Climate Policy in the Canadian Federation: Key Issues in the Provincial Constitutional Challenges to Parliament’s Greenhouse Gas Pollution Pricing Act
Nathalie J. Chalifour, PhD* **
INTRODUCTION Debates about the division of powers in the Canadian federation are noth- ing new. They have been central to Canadian environmental law from its beginnings, as illustrated by the fact that several major Supreme Court of Canada jurisdictional cases have featured environmental legislation.1 Can- adian climate law is proving to be no different,2 raising novel questions about how we should interpret jurisdiction in a way that is respectful of our federalist makeup, yet also responsive to an issue that could, as Sas- katchewan Court of Appeal Chief Justice Richards said during questioning,
* Associate Professor, Faculty of Law, University of Ottawa. The author wishes to thank the Social Sciences and Humanities Research Council of Canada (SSHRC) for the research support provided. The author wishes to acknowledge and thank Taylor Wormington and Mari Galloway, JD Candidates, for their excellent research assistance. The author also wishes to thank the many reviewers who provided comments on drafts of this paper or engaged in discussions relating to its content, including Professor Joseph Magnet, Profes- sor Peter Oliver, Professor Stewart Elgie, and many anonymous reviewers. Any errors are the author’s responsibility. ** An earlier version of this paper was presented at “Symposium on Environment in the Court- room: Enforcing Canadian GHG Emissions Laws” (Laval University, 25–26 October 2018). 1 See e.g. R v Crown Zellerbach Canada Ltd, [1988] 1 SCR 401, 49 DLR (4th) 161 [Crown Zeller- bach cited to SCR]; Friends of the Oldman River Society v Canada (Minister of Transport), [1992] 1 SCR 3 at 64, 88 DLR (4th) 1; R v Hydro-Québec, [1997] 3 SCR 213, 151 DLR (4th) 32 [Hydro-Québec cited to SCR]; 114957 Canada Ltée (Spraytech, Société d’arrosage) v Hudson (Town), 2001 SCC 40. 2 See e.g. Syncrude Canada Ltd v Canada (AG), 2014 FC 776; Syncrude Canada Ltd v Canada (AG), 2016 FCA 160 (in which Syncrude challenged the constitutionality of federal renew- able fuel regulations, but lost).
201 202 Revue de droit d’Ottawa • 50:2 | Ottawa Law Review • 50:2 “literally imperil the future of the planet.”3 The response to climate change not only raises challenging legal questions, but has become highly politi- cized in these divisive times, with some predicting the 2019 federal elec- tion will turn on its outcome.4 While considerable ink has been spilled on discussing how jurisdiction over greenhouse gas (GHG) emissions could be allocated in Canada, most of the analysis came before Parliament enacted the Greenhouse Gas Pollution Pricing Act5 (GGPPA) in June 2018.6 While this is not the first piece of fed- eral legislation about GHGs,7 it is one that has triggered sufficient prov- incial opposition to generate two legal challenges — one by Saskatchewan
3 Arthur White-Crummey, “Carbon Tax Legal Battle: Court Reserves Decision in Carbon Tax Case, Where High Stakes Are Only Certainty”, Regina Leader-Post (last modified 15 February 2019), online:
and one by Ontario — over whether the GGPPA is intra vires of Parliament.8 This article builds upon the existing body of analysis on the division of pow- ers over GHG emissions in Canada as well as the factums of the parties and intervenors in the case to examine the constitutionality of the GGPPA. This question has many dimensions, including the scope and applicabil- ity of multiple heads of powers, such as the national concern and emer- gency branches of the residual peace, order, and good government (POGG) power, taxation, criminal law, and the trade and commerce powers. It also raises related issues about the relevance of international commitments, Indigenous rights and the Canadian Charter of Rights and Freedoms9 (Char- ter), unwritten constitutional principles of federalism and the protection of minorities, and interpretive principles such as cooperative federalism. The carbon pricing litigation raises many other related constitutional law questions, such as the scope of the federal criminal law power to jus- tify economic incentives,10 the relevance of the treaty implementing power, the incorporation of Indigenous sovereignty and rights into the division of powers analysis, and the prospects for applying a normative lens of interpretation to jurisdictional disputes when those disputes threaten to undermine the fundamental rights of Canadians.11 I do not attempt to exhaustively analyze all of these issues — the courts will have an oppor- tunity to do this, after benefitting from the written and oral arguments of counsel representing the parties and intervenors, and research will con- tinue alongside the litigation. My goal in this paper is to delve deeply into a subset of three key constitutional law questions that are central to the litigation.12 How these issues are resolved will not only answer the ques-
8 For Saskatchewan’s reference question, see OIC 194/2018 (“[t]he 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?” at Schedule “A”). For Ontario’s reference question, see OIC 1014/2018 (“[i]s the Greenhouse Gas Pollution Pricing Act, Part 5 of the Budget Implementation Act, 2018, No. 1, SC 2018, c.12, unconstitutional in whole or in part?”). 9 Part 1 of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c 11. 10 For an analysis of this issue, see Chalifour, “Constitutional Authority to Legislate GHG Emissions”, supra note 6 at 380–84. 11 See e.g. Lynda Collins & Lorne Sossin, “In Search of an Ecological Approach to Constitu- tional Principles and Environmental Discretion in Canada” (2019) 52:1 UBC L Rev 293 (argu- ing for the recognition of the unwritten constitutional principle of ecological sustainability). 12 The analysis in this paper engages with the GGPPA and the provincial challenges from a base of prior research, including: Chalifour, “Constitutional Authority to Legislate GHG Emissions”, supra note 6; Chalifour, “Carbon Taxes”, supra note 6; Chalifour, “Constitutional Authority to Levy Carbon Taxes”, supra note 6; Nathalie J Chalifour, “Drawing Lines in the Sand: Parliament’s Jurisdiction to Consider Upstream and Downstream Greenhouse Gas (GHG) Emissions in Interprovincial Pipeline Project Reviews” (2018) 23:1 Rev Const Stud 129. 204 Revue de droit d’Ottawa • 50:2 | Ottawa Law Review • 50:2 tion of whether the GGPPA is intra vires of Parliament, but also of how cer- tain unresolved constitutional law issues will be addressed. The outcome of the challenges also has deep implications for Canada’s ability to deal effectively with climate change. The first question I address relates to the national concern branch of POGG, which is the main basis of jurisdiction claimed by the Attorney Gen- eral of Canada (Canada) to justify the GGPPA. This power has been narrowly construed by the courts in the past, and the provinces have mounted a vehe- ment objection to its use in this case, largely on the basis that it would con- fer exclusive and plenary powers to Parliament over GHGs and, in effect, displace provincial laws relating to GHG emissions. The Attorney General of Saskatchewan (Saskatchewan), for example, characterizes the national concern branch of POGG as explicitly conferring a ground of “exclusive jurisdiction of Parliament” that would have the effect of “displacing prov- incial powers altogether.”13 In oral submissions, the Attorney General of Ontario (Ontario) characterized POGG as a power with a special kind of exclusivity that is not open to the double aspect doctrine. These consti- tutional references provide an opportunity for the courts to clarify some misconceptions about the nature of the national concern branch of POGG that have emerged in contemplation of its applicability to environmental laws, and in response to strong dissenting language in R v Hydro-Québec.14 I examine the relevant jurisprudence to identify the source of confusion, and explain what I believe is the correct interpretation of this power in the con- text of the current challenges — an interpretation which offers solace for the federalism cautions espoused in the dissents in Hydro-Québec and R v Crown Zellerbach Canada Ltd.15 The second question relates to the contours of temporary measures in the context of POGG’s emergency branch. While Canada did not claim jurisdiction for the GGPPA as an emergency, some intervenors’ arguments brought the issue before the courts.16 How should courts interpret the
13 In the Matter of the Greenhouse Gas Pollution Pricing Act, Bill C-74, Part V and in the Matter of a Reference by the Lieutenant Governor in Council to the Court of Appeal Under The Constitutional Questions Act, 2012, ss 2012, c C-29.01 (Reply Factum of the Attorney General of Saskatchewan at para 3) [Saskatchewan Reply Factum]. 14 See e.g. Hydro-Québec, supra note 1 at para 67. 15 Supra note 1. 16 For example, the David Suzuki Foundation in the Saskatchewan and the Ontario cases, and the United Chiefs and Councils of the Mnidoo Mnising in the Ontario case, presented argu- ments in support of the emergency branch. On 14 February 2019 at the Court of Appeal for Saskatchewan during oral argumentation, the lawyer representing Canada stated that Can- ada had no objections to the court holding the legislation intra vires under one of the powers Jurisdictional Wrangling Over Climate Policy in the Canadian Federation 205
requirement that legislation be temporary in light of the geological and planetary scale of climate change? I will consider the relevant jurispru- dence to determine whether the Act could meet the temporal requirement. Third, the constitutional challenges will require the courts to deter- mine whether the carbon pricing mechanisms contained in the GGPPA qualify as taxes or regulatory charges. This distinction is important, because when a measure is constitutionally justified as a tax, sections 53 and 125 of the Constitution Act, 186717 apply. Both provincial challenges allege the carbon price enacted by the GGPPA is a tax that does not con- form to section 53, which embodies the “no taxation without representa- tion” principle.18 They may also claim it is a tax because this would trigger the application of section 125, which exempts provincially owned entities from paying federal taxes.19 While the jurisprudential test for distinguish- ing between taxes and regulatory charges is well established, one part of the test is relatively unchartered territory, and the provinces have invited the courts to eliminate it. The courts will need to clarify how this part of the test applies to a measure like the carbon price, which has behaviour modification, versus cost-recovery, as its primary goal. While the constitutional law questions addressed in this paper and by the courts merit discussion in and of themselves, the analysis contributes to a broader conversation about whether the Constitution is equipped to handle what many have characterized as the greatest collective action and public policy challenge of our times, while respecting our federalist make- up.20 I conclude that it is so equipped, but only if courts are willing to allow the living constitutional tree to adapt to the very different context in which it serves Canadians today. This adaptation requires recognizing the critical role that all governments in Canada must play in addressing climate change, and interpreting the division of powers in a way that mini- mizes conflict and maximizes progress and cooperation. The answer to
argued by the intervenors, which includes the emergency branch of peace, order, and good government (POGG). See CBC Saskatchewan, “Saskatchewan v. Canada — Day 2” (14 February 2019) at 03h:05m:07s, online (video): YouTube
I. BACKGROUND AND CONTEXT Creating the legal and policy infrastructure needed to address climate change within the timeframe required presents a major public policy chal- lenge for any country. It is especially challenging in the context of Can- adian federalism, since the rapid interventions needed at multiple levels and in many domains call for considerable intergovernmental coordin- ation and cooperation in largely unchartered territory. While Canadian governments necessarily have abundant experience with intergovern- mental coordination, multi-dimensional issues such as climate change have proven to be especially tricky.22 Canada has been internationally committed to taking steps to mitigate GHG emissions since 1992, when it signed the United Nations Framework Convention on Climate Change23 (UNFCCC). In 2015, Canada reaffirmed its commitments to addressing climate change by signing the Paris Agree- ment.24 The Paris Agreement is based on the cumulative efforts of parties to implement their own nationally determined targets, and commits parties to pursue efforts to limit global warming to 1.5 degrees Celsius above pre- industrial levels.25 Canada submitted a target of reducing GHG emissions by 30 percent below 2005 levels by 2030.26 Under the Paris Agreement,
21 For readers interested in a more comprehensive explanation of the evolution of climate policy, I address these issues in more detail in prior papers. See e.g. Nathalie J Chalifour & Jessica Earle, “Feeling the Heat: Climate Litigation Under the Charter’s Right to Life, Lib- erty and Security of the Person” (2018) 42:4 Vermont L Rev 689 at 701–04 (for the inter- national policy response), 704–10 (for the Canadian policy response). 22 See Office of the Auditor General of Canada, “Report 1 — Progress on Reducing Green- house Gases — Environment and Climate Change Canada” (12 June 2017) at paras 1.9, 1.11, online:
27 Paris Agreement, supra note 24, art 4(1). 28 For a more detailed overview of this evolution, see Chalifour, “Constitutional Authority to Legislate GHG Emissions”, supra note 6 at 338–45. 29 See Carbon Tax Act, SBC 2008, c 40 [Carbon Tax Act]. 30 See Regulation respecting a cap-and-trade system for greenhouse gas emissions allowances, CQLR c Q-2, r 46.1 [Cap and Trade System]. 31 See Renewable Electricity Regulations, NS Reg 150/2018. 32 See e.g. Renewable Fuel Regulations, SOR/2010-189; Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations, SOR/2010-201; Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations, SOR/2013-24. 33 Government of Ontario, “Feed-In Tariff Program” (last modified 6 December 2017), online:
A. Carbon Pricing in Canada There are many different policies that can be used to mitigate GHG emis- sions, including regulations limiting or eliminating coal-fired energy pro- duction, energy efficiency standards, and carbon pricing.42 Carbon pricing has emerged as an increasingly common policy option because it is effective in reducing GHG emissions and does so in a cost-effective manner across the economy.43 Whether in the form of a charge (e.g. carbon tax) or quantity
38 “Vancouver Declaration on Clean Growth and Climate Change” (3 March 2016), online (pdf): Inuit Tapiriit Kanatami
(e.g. cap and trade system), carbon pricing works by attaching a price to the externality (in this case carbon), which influences economic choices in a direction that is less expensive (i.e. less carbon intensive).44 Economic modelling has shown that using price-based regulations to achieve GHG reductions is efficient. For instance, one study showed that had Canada used carbon pricing to meet its 2020 GHG targets, it would have saved some $70 billion annually (representing 3.4 percent of Can- ada’s GDP), as compared to prescriptive regulations.45 One of the reasons why pricing mechanisms are cost-effective is that they maximize flexibil- ity among economic actors, letting them determine how best to achieve reduction. Most importantly, carbon pricing is known to be effective in reducing GHG emissions.46 This is not to suggest that there is no role for prescriptive regulations.47 On the contrary, they are an essential part of the policy toolkit for address- ing climate change. While all policies create distribution impacts, these impacts are quite visible in the case of pricing instruments, and have gen- erated concerns about how to ensure GHG emissions are reduced in a way that does not create hardship for those with lower average incomes or other identity characteristics that could make adjusting to GHG emis- sions reductions more challenging. I have written about this important issue elsewhere and suggest that policies must be designed to avoid dis- tributional impacts and environmental racism or injustice. In the case of pricing mechanisms that generate considerable revenues, this can be achieved through choices about how to use those revenues.48
(pdf): Canada’s Ecofiscal Commission< ecofiscal.ca/wp-content/uploads/2018/04/Ecofiscal- Commission-Carbon-Pricing-Report-Clearing-the-Air-April-4-2018.pdf>. 44 The World Bank, “Pricing Carbon: What Is Carbon Pricing?” (last accessed 19 February 2019), online:
49 See Carbon Tax Act, supra note 29. 50 See Climate Leadership Act, SA 2016, c C-16.9. 51 See Cap and Trade System, supra note 30. 52 See The Cap and Trade Program, O Reg 144/16. But see Prohibition Against the Purchase, Sale, and Other Dealings with Emission Allowances and Credits, O Reg 386/18 (the Cap and Trade program was cancelled on 3 July 2018 by the Ford government, s 2). 53 GGPPA, supra note 5, Schedule 4 (sets out the relevant price floor, specifically $10 per CO₂ tonne emitted in 2018, $20 in 2019, $30 in 2020, $40 in 2021, and $50 in 2022). 54 Ibid, Part 2. See also Canada, Parliamentary Information and Research Service, Carbon Pricing Policy in Canada, by Jesse Good, Publication No 2018-07-E (Ottawa: Library of Par- liament, 26 February 2018) at 2. 55 Because carbon dioxide (CO₂) is the most prevalent GHG, the pricing of GHG emissions is commonly referred to as “carbon pricing.” 56 GGPPA, supra note 5, Schedule 1. Jurisdictional Wrangling Over Climate Policy in the Canadian Federation 211
be listed in Schedule 1 because they requested it,57 while Saskatchewan, Ontario, Manitoba, and New Brunswick would be listed because their poli- cies do not meet the benchmark established within the GGPPA.58 Saskatchewan was opposed to a carbon price from the start, refusing to sign the Pan-Canadian Framework and threatening to challenge the fed- eral law.59 The province initiated its constitutional reference even before the GGPPA was brought into force. Following a change in government, the province of Ontario followed suit, filing its own constitutional challenge.60 I will not attempt to provide an exhaustive overview of the arguments made by both provinces, but rather will offer a summary here, and return to relevant arguments in the detailed analysis in the rest of the paper.
B. Summary of Arguments in the Provincial Constitutional References 1. Saskatchewan’s Arguments Saskatchewan’s arguments were contained in two factums, the original fac- tum outlining its constitutional objections to the GGPPA, and a reply fac- tum in which it responded to Canada’s argument that the law is justifiable under POGG.61 Saskatchewan’s arguments fell into three main camps. First, before turning to the standard division of powers analysis of characteriz- ation (pith and substance) and classification, the province challenged the GGPPA on the basis that it violates the unwritten constitutional principle (UCP) of federalism. Specifically, Saskatchewan took issue with what it characterized as the uneven application of the law, submitting that “the
57 See Order Amending Part 2 of Schedule 1 to the Greenhouse Gas Pollution Pricing Act, PC 2018- 1292, (2018) C Gaz II, 3760 at 3774, 3776. 58 Ibid. 59 See Environment and Climate Change Canada, “Pan-Canadian Framework”, supra note 39 at Foreword; OIC 194/2018, supra note 10. 60 Specifically, the government of Saskatchewan has asked the following constitutional ques- tion to the Court of Appeal for Saskatchewan: “[t]he 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?” (OIC 194/2018, supra note 8). The government of Ontario has asked the following constitutional question to the Court of Appeal for Ontario: “[i]s the Greenhouse Gas Pollution Pricing Act, Part 5 of the Budget Implementation Act, 2018, No. 1, SC 2018, c.12, unconstitutional in whole or in part?” (OIC 1014/2018, supra note 8). 61 Normally, the party challenging the constitutionality of a law would outline its objections in a factum, and the responding party would reply in their own factum. In this case, Sas- katchewan asked the Court for permission to respond to Canada’s POGG arguments in a reply. Canada consented to this, which is why Saskatchewan’s arguments are split across two factums. 212 Revue de droit d’Ottawa • 50:2 | Ottawa Law Review • 50:2 federal government cannot condition the application of its laws in par- ticular provinces based on how the Province has chosen to exercise its own legislative jurisdiction.”62 Saskatchewan characterized the GGPPA as the “antithesis of cooperative federalism,”63 branding it “coercive federal- ism” because it forces carbon pricing on unwilling provinces. Saskatchewan’s second argument was that the charge imposed in Part 1 of the GGPPA is, in pith and substance, a tax (versus a regulatory charge).64 Surprisingly, Saskatchewan conceded that Parliament has the constitutional jurisdiction under subsection 91(3) of the Constitution Act, 1867 to impose a carbon tax, if that tax is applied uniformly across Canada. The province argued, however, that the backstop mechanism renders the alleged tax unconstitutional because the backstop leads to uneven appli- cation of the tax across provinces.65 It also claimed that the tax violates the “no taxation without representation” clause in section 53 of the Constitu- tion Act, 1867.66 Saskatchewan argued that the GGPPA confers too much discretion on the executive branch of government to decide whether the national benchmark for stringency is met, thereby violating section 53, which requires taxes to emanate from Parliament.67 Saskatchewan’s third argument was contained in its reply factum and related to whether the GGPPA is justifiable under the national con- cern branch of POGG.68 Saskatchewan argued that GHG emissions are far too pervasive to constitute a distinct matter,69 and are predominantly intra-provincial.70 Pointing to Saskatchewan’s climate change plan, Prai- rie Resilience, the province argued it is entirely capable of legislating on GHG emissions and that there is no provincial inability at play.71 While the province reiterated its concerns about the backstop features of the Act and its objections to Parliament imposing a carbon price on an unwilling
62 In the Matter of the Greenhouse Gas Pollution Pricing Act, Bill C-74, Part V and in the Matter of a Reference by the Lieutenant Governor in Council to the Court of Appeal Under the Constitutional Questions Act, 2012, ss 2012, c C-29.01 (Factum of the Attorney General of Saskatchewan at para 38) [Saskatchewan Factum]. 63 Ibid at para 48. 64 Ibid at para 44. 65 Ibid at paras 2, 34, 39. 66 Ibid at para 2. 67 Ibid at para 63. 68 Saskatchewan Reply Factum, supra note 13 at paras 2, 8. 69 Ibid at para 19. 70 Ibid at para 20. 71 Ibid at para 35. Jurisdictional Wrangling Over Climate Policy in the Canadian Federation 213 province,72 the main thrust of its objection was that granting Parliament jurisdiction to regulate GHG emissions would intrude too deeply into provincial jurisdiction. Saskatchewan characterized the national concern branch of POGG as having an “extraordinary” nature that confers exclu- sive jurisdiction on the federal government, so to grant Parliament juris- diction over GHG emissions this way would displace provincial powers over GHG emissions altogether.73
2. Ontario’s Arguments Ontario’s challenge to the GGPPA was founded on similar arguments, though framed differently from Saskatchewan’s. Notably, Ontario raised the concerns made by Saskatchewan under the banner of the UCP of federalism within its POGG analysis. Ontario submitted that the national concern branch of POGG should be interpreted narrowly to avoid “radically alter[ing]” the division of powers.74 A central theme of Ontario’s argument was that a broad interpretation of the national concern branch of POGG could lead to “a wholesale transfer of jurisdiction from the provincial legislatures to Parliament.”75 “If Parliament has jurisdiction over green- house gas emissions,” Ontario argued, “it could control the activities of the largest to the smallest undertakings, industries, and trades.”76 Ontario placed great emphasis on the fact that GHG emissions are generated by so many different activities, and submitted that granting Parliament juris- diction over GHG emissions would grant Parliament the “near-plenary power to regulate almost all aspects of Canadian society and economy.”77 Ontario added that “[t]he provinces are not only entirely capable of com- batting greenhouse gas emissions, they are already doing so”78 and doing so “in their own preferred manner.”79 Unlike Saskatchewan, Ontario argued that the GGPPA is neither a valid regulatory charge nor a tax. Whereas Saskatchewan conceded Parliament’s
72 Ibid at para 8. 73 Ibid at para 3. 74 In the Matter of a Reference to the Court of Appeal Pursuant to Section 8 of the Courts of Justice Act, RSO 1990, c. C.34, by Order-in-Council 1014/2018 Respecting the Constitutionality of the Greenhouse Gas Pollution Pricing Act, Part 5 of the Budget Implementation Act, 2018, No 1, SC 2018, c. 12 (Factum of the Attorney General of Ontario at para 82) [Ontario Factum]. 75 Ibid at para 62. 76 Ibid at para 65. 77 Ibid at para 82. 78 Ibid at para 74. 79 Ibid at para 75. 214 Revue de droit d’Ottawa • 50:2 | Ottawa Law Review • 50:2 authority to implement a uniform carbon tax under its taxation powers in subsection 91(3), as long as it is in conformity with section 53, Ontario accepted Canada’s submission that the GGPPA is not about raising rev- enue for general purposes and thus is not taxation.80 Ontario’s main argu- ment here was that the regulatory charge is invalid because the revenue it generates is not mandated to be spent on achieving the regulatory pur- poses of the Act.81 This, Ontario submitted, violates the jurisprudential test for what constitutes a regulatory charge.
3. Canada’s Arguments Canada argued that the GGPPA is intra vires of Parliament under POGG’s national concern branch. In the alternative, it argued that the measure is justifiable as a tax and meets the requirements of section 53. Interest- ingly, Canada did not attempt to justify the GGPPA under the criminal law power, although several intervenors did so.82 At the end of her oral submissions in both cases, counsel for Canada stated that Canada did not object to the court finding the GGPPA intra vires on one of the additional powers raised by the intervenors. Counsel even alluded to the situation in Hydro-Québec83 where Canada argued that the Canadian Environmental Protection Act, 199984 (CEPA) was justifiable under POGG, but in which the Supreme Court upheld the Act under criminal law, as per some of the intervenors’ arguments.85
80 Ibid at para 98. 81 Ibid at para 112. 82 See e.g. In the Matter of the Greenhouse Gas Pollution Pricing Act, Bill C-74, Part 5 and in the Matter of a Reference by the Lieutenant Governor in Council to the Court of Appeal for Saskatch- ewan Under The Constitutional Questions Act, 2012, ss 2012, c C-29.01 (Factum on application to intervene of Canadian Environmental Law Association and Environmental Defence Canada Inc at paras 7–19); In the Matter of the Greenhouse Gas Pollution Pricing Act, Bill C-74, Part 5 and in the Matter of a Reference by the Lieutenant Governor in Council to the Court of Appeal Under The Constitutional Questions Act, 2012, ss 2012, c C-29.01 (Factum and record of the intervener, Canadian Public Health Association at paras 40–51); In the Matter of the Greenhouse Gas Pollution Pricing Act, Bill C-74, Part 5 and in the Matter of a Reference by the Lieutenant Governor in Council to the Court of Appeal for Saskatchewan Under The Consti- tutional Questions Act, 2012, ss 2012, c C-29.01 (Factum of Canada’s Ecofiscal Commission (Intervenor) at paras 34–47) [Ecofiscal Commission Factum]. 83 Supra note 1. 84 Supra note 7. 85 See CBC Saskatchewan, “Day 2”, supra note 16 at 03h:05m:20s. Jurisdictional Wrangling Over Climate Policy in the Canadian Federation 215
Canada characterized the purpose of the GGPPA as to “incentivize the behavioural changes necessary to reduce GHG emissions.”86 In its factum for the Saskatchewan reference, Canada described the subject matter of jurisdiction under national concern to be “GHG emissions.”87 In response to Saskatchewan’s emphasis on the UCP of federalism, Canada submitted that “while federalism is undoubtedly a foundational principle, Saskatch- ewan’s view that the federalism principle, in the abstract, renders the Act unconstitutional regardless of its pith and substance or fit with s. 91 of the Constitution Act, 1867 should be rejected” and that “[t]here is no constitu- tional requirement that federal laws operate equally throughout Canada.”88 In light of the objections by the provinces to the breadth of “GHG emissions” as a subject matter, Canada reframed the subject matter in its oral arguments before the Saskatchewan Court of Appeal, and in its fac- tum in the Ontario challenge. Specifically, it framed the subject matter as addressing the cumulative dimensions of GHG emissions, which include the cumulative atmospheric concentrations of GHG emissions, the cumu- lative global and national impacts of climate change, and the cumulative GHG emissions from each province on Canada’s total GHG emissions.89 This refined subject matter, Canada argued, helps to distinguish the edges of the subject matter for the purpose of determining what falls within POGG, and targets the matter to the things that provinces cannot do (i.e. enact a federal minimum standard of stringency for carbon pricing). With respect to applying the Crown Zellerbach test to the GGPPA, Can- ada placed considerable emphasis on the extraterritorial nature of GHG emissions (which have radiative impacts at the level of the atmosphere), and the provincial inability test. While Canada conceded that the environ- ment and pollution in general are too broad to be assigned to either level of government,90 it argued that GHG emissions themselves are a sufficiently single, distinct, and indivisible form of pollution to meet the Crown
86 In the Matter of the Greenhouse Gas Pollution Pricing Act, Bill C-74, Part V and in the Matter of a Reference by the Lieutenant Governor in Council to the Court of Appeal for Saskatchewan Under The Constitutional Questions Act, 2012, ss 2012, c C-29.01 (Factum of Attorney General of Canada at para 73) [Canada Factum for Saskatchewan]. 87 Ibid at paras 2, 71. 88 Ibid at para 107. 89 See In the Matter of a Reference to the Court of Appeal Pursuant to Section 8 of the Courts of Justice Act, RSO 1990, c. C.34, by Order-in-Council 1014/2018 Respecting the Constitutionality of the Greenhouse Gas Pollution Pricing Act, Part 5 of the Budget Implementation Act, 2018, No. 1, SC 2018, c. 12 (Factum of the Attorney General of Canada at paras 2–3) [Canada Factum for Ontario]. 90 Canada Factum for Saskatchewan, supra note 86 at para 88. 216 Revue de droit d’Ottawa • 50:2 | Ottawa Law Review • 50:2 Zellerbach test.91 Next, Canada argued that no single province is consti- tutionally capable of enacting legislation that has the effect of creating a benchmark carbon price that applies across the country. It added that the “[f]ailure by one province to reduce GHG emissions will harm other provinces and territories, harm Canada’s relations with other countries, and impede international efforts to mitigate climate change.”92 In reply to intervenors, Canada elaborated on how the provincial inability test defines the limits of Parliament’s jurisdiction by confining federal jurisdiction to matters that are both “substantively related to reducing Canada’s cumula- tive GHG emissions” and “implement[ing] a national measure for which the failure to include one or more provinces would jeopardize successful operation in other parts of the country”. This, Canada argued, “transcends provincial constitutional competence.”.93 In response to provincial objections about the reach of Parliament’s powers under POGG, Canada argued that the double aspect and ancillary powers doctrines would ensure that provinces could continue to utilize their constitutional powers to regulate intra-provincial GHG emissions, including implementing carbon pricing systems.94 It emphasized that the GGPPA was in fact designed to “intrude minimally” on provincial jurisdic- tion by applying only in the event that provinces do not enact their own carbon pricing system that meets the federal benchmark.95 In the alternative, Canada argued that the GGPPA is a valid exercise of federal taxation powers under subsection 91(3) and conforms to section 53.96 It noted that the GGPPA was introduced in the House of Commons, and that its delegation of decision-making authority in subsection 166(3) of the GGPPA to the Governor in Council is appropriate, as the Governor in Council must take into account criteria related to the stringency of the carbon price.97
91 Ibid at para 90. 92 Ibid at para 71. Canada also cites the phenomenon of carbon leakage as a negative impact of provincial inconsistency regarding carbon pricing (ibid at para 96). 93 In the Matter of a Reference to the Court of Appeal Pursuant to Section 8 of the Courts of Justice Act, RSO 1990, c. C.34, by Order-in-Council 1014/2018 Respecting the Constitutionality of the Greenhouse Gas Pollution Pricing Act, Part 5 of the Budget Implementation Act, 2018, No. 1, SC 2018, c. 12 (Factum of the Attorney General of Canada in Response to Intervenors at para 19) [Canada Reply to Intervenors Factum for Ontario]. 94 Ibid at paras 98–101. 95 Ibid at para 103. 96 Ibid at para 5. 97 Ibid at paras 135, 138. See also GGPPA, supra note 5, s 166(3). Jurisdictional Wrangling Over Climate Policy in the Canadian Federation 217
II. KEY ISSUES IN THE LITIGATION A. Can the Subject Matter of GHG Emissions be Justified as a Matter of National Concern Under Parliament’s Authority to Make Laws for Peace, Order, and Good Government? Authority to legislate under the national concern branch of POGG stems from the opening language of section 91 of the Constitution Act, 1867.98 The Supreme Court’s most comprehensive treatment of the national concern branch of POGG was articulated in the environmental case of R v Crown Zellerbach Ltd.99 The provincial challenges represent an opportunity for the courts to revisit this 30-year-old test in the context of another environ- mental challenge, but one that involves a more complex and multidimen- sional public policy challenge. In Crown Zellerbach, the Supreme Court was asked to consider the constitutionality of federal legislation that prohibited dumping at sea, even when the dumping was entirely within the coastal waters of a prov- ince (British Columbia). After noting that the national concern branch is separate and distinct from the national emergency branch of POGG,100 the Court summarized the prior jurisprudence pertaining to POGG and offered the following summary:
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 fun- damental 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 extraprovincial interests of a provincial failure
98 Supra note 7, s 91. 99 Supra note 1. 100 Ibid at 431–32 (“[t]he 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”). 218 Revue de droit d’Ottawa • 50:2 | Ottawa Law Review • 50:2
to deal effectively with the control or regulation of the intraprovincial aspects of the matter.101 The heart of the test for whether a matter falls within the national concern branch is captured in point 3, which is largely about finding contours to delimit the federal matter and to ensure the matter, so defined, does not tread too deeply on provincial jurisdiction. Point 4, known as the “provin- cial inability test,” serves as indicia to determine whether an issue has the requisite singleness or indivisibility102 and has proven to be very important in making this determination.103 Applying the test in Crown Zellerbach, the Court began by first outlining what was clearly within Parliament’s jurisdiction. For instance, the Court stated that marine pollution is clearly a matter of national concern, given its predominantly extra-provincial and international character and impli- cation.104 The Court went on to state that Parliament has jurisdiction to regulate dumping in waters outside the territorial limits of any province, and in waters within provincial waters to prevent harm to fish through its fisheries power.105 The Court noted that Parliament also has jurisdiction to regulate dumping in provincial waters of substances “that can be shown to cause pollution in extra-provincial waters.”106 The crux of the issue before the Court was whether federal legislation that regulated the dumping of substances not only in marine waters, but also into provincial marine waters, without necessarily causing pollution, was justifiable.107 The majority held it was, but this question of how far federal law can and should extend into matters otherwise of provincial jurisdiction is what preoccupied the dissent. In finding the federal lawintra vires of Parliament, the Supreme Court majority concluded that the subject matter of marine pollution was
101 Ibid at 432. 102 Ibid at 434.4. 103 See Peter W Hogg, Constitutional Law of Canada (Scarborough: Carswell, 2007) (loose- leaf updated 2016, release 1), ch 17 at 17–15 [Hogg, Constitutional Law]. See also Patrick J Monahan & Byron Shaw, Constitutional Law, 4th ed (Toronto: Irwin Law, 2013) at 279–384 (Monahan & Shaw suggest that provincial inability is a stand-alone way to show a matter is one of national concern). 104 Crown Zellerbach, supra note 1 at 436. 105 Ibid. The Supreme Court added that legislation justified under the fisheries power would need to meet the tests laid out for that in Fowler v The Queen, [1980] 2 SCR 213, 113 DLR (3d) 513, and Northwest Falling Contractors Ltd v The Queen, [1980] 2 SCR 292, 113 DLR (3d) 1. 106 Crown Zellerbach, supra note 1 at 417. 107 Ibid at 436. Jurisdictional Wrangling Over Climate Policy in the Canadian Federation 219
sufficiently single, distinct, and indivisible. The Court pointed to the fact that Canada had signed the Convention on the Prevention of Marine Pollution by Dumping of Wastes and other Matter, an international agreement that treated marine pollution by dumping of substances as a distinct form of marine pollution.108 The international treaty was cited by the Court as part of its justification for finding that the matter was one of national concern. Justice Le Dain found the subject matter to be indivisible because of the potential movement of pollutants between internal waters and the ter- ritorial sea, and because there is no visually ascertainable limit between internal and external waters.109 Disagreement among the bench was centered on the degree of intru- sion that upholding the matter would cause for provincial jurisdiction. While the majority held the matter was sufficiently circumscribed to be intra vires of Parliament, the dissenting judges felt it was too broad and thus ultra vires. The dissent’s concern centred on the legislation’s blanket prohibition against dumping any substance in the water, regardless of its nature or the amount.110 To be justified as a national concern, the minority thought the legislation should have targeted the dumping of substances that were harmful to waters or contributed to pollution.111 This is relevant to the issue of GHG emissions, since it would follow that legislation banning all GHG emissions regardless of their link to climate change could trigger the same concern of being overly broad, whereas a limit or price on the amount of GHG emissions to keep them below a given threshold could be sufficiently circumscribed to satisfy even the Crown Zellerbach dissent. It is also worth noting that neither the majority nor the dissent mentioned the double aspect doctrine. The dissent’s concerns may have been assuaged by the prospect that validly enacted provincial dumping legislation could exist alongside the federal law, as long as there was no direct conflict or frustration of the federal law.112 Of course, the case was decided over 30 years ago, without the benefit of years of jurisprudence favouring concur- rent application of laws and a narrowing of the paramountcy doctrine. In sum, POGG’s national concern branch is available to justify fed- eral legislation on matters of extra-provincial, national, and international
108 Ibid at 436–37. 109 Ibid at 437–38. 110 Ibid at 449–50. 111 Ibid at 442, 449–50. 112 This is the reality today, where the municipality of Victoria, for instance, regulates dischar- ges of sewage into the ocean. See the text accompanying note 194. 220 Revue de droit d’Ottawa • 50:2 | Ottawa Law Review • 50:2 concern that are sufficiently single, distinct, and indivisible, as long as the matter is sufficiently specific and delimited to minimize intrusions into provincial jurisdiction. I will now consider how this test applies to GHG emissions.
1. Are GHG Emissions a Matter of National Concern? In Crown Zellerbach, Justice Le Dain stated that “[m]arine pollution, because of its predominantly extra-provincial as well as international character and implications, is clearly a matter of concern to Canada as a whole.”113 He added that the rationale for recognizing federal jurisdiction over marine pollution is logical, since a failure to recognize federal juris- diction for extra-provincial and international subjects could create a legal vacuum, something the courts have described as being “inimical to the very concept of the division of powers.”114 The same could be said of GHG emissions. GHGs are a quintessen- tially global pollutant, impacting the atmosphere regardless of where they are emitted, and causing harm at a planetary scale. The uncontroverted evidence showing the serious implications of climate change in Canada and abroad, combined with understanding that GHG emissions must be abated urgently to reduce these harms, means it is bordering on intellec- tual dishonesty to say they are not of national concern. The first part of the Crown Zellerbach test explains that matters can be of national concern either because they are new matters which did not exist at Confederation, or matters that although of a local or private nature in a province originally, have since become matters of national concern. GHG emissions could be argued to fit within either category. First, we were clearly unaware of the implications of high levels of anthropogenic GHG emissions on the global climate in 1867. Second, even if GHG emissions are a matter of local con- cern, they have become a matter of national concern given the evidence of climate change and resulting imperatives to reduce GHG emissions. The GGPPA’s Preamble supports the characterization of GHG emis- sions as a matter of national concern, referring to the fact that they present
113 Crown Zellerbach, supra note 1 at 436. See also Interprovincial Co-Operatives Ltd et al v R (1975), [1976] 1 SCR 477, 53 DLR (3d) 321 [Interprovincial Co-operatives]; Hydro-Québec, supra note 1. 114 Canada (AG) v PHS Community Services Society, 2011 SCC 44 at para 69 [Insite]. The courts have been clear about the importance of avoiding interpretations of jurisdictional powers that could create legal vacuums from which both levels of government could be excluded from legislating. See also Carter v Canada (AG), 2015 SCC 5 [Carter]. Jurisdictional Wrangling Over Climate Policy in the Canadian Federation 221
“an unprecedented risk to the environment.”115 The Preamble notes that Canada has ratified the UNFCCC116 and the Paris Agreement,117 and reiterates the Government of Canada’s commitment to “achieving Canada’s Nation- ally Determined Contribution — and increasing it over time — under the Paris Agreement by taking comprehensive action to reduce emissions across all sectors of the economy.”118 It points to the consensus reflected in the intergovernmental Pan-Canadian Framework that “climate change is a national problem that requires immediate action by all governments in Canada.”119 The fact that GHG emissions are pervasive and emitted by individuals and entities in provinces does not erase the fact that they are of national significance, but rather speaks to the scale of impact that such a finding would have on provincial jurisdiction — an important part of the Crown Zellerbach test addressed below.
2. Are GHG Emissions Sufficiently Single, Distinct, and Indivisible? At its core, the second part of the Crown Zellerbach test is about setting con- tours around the subject matter. Unlike with other heads of power, where the subject matter (such as “fisheries”) is clearly specified, analyzing juris- diction under POGG requires ascertaining what exactly the subject matter is that Parliament has jurisdiction over. This characterization exercise is at the heart of the Crown Zellerbach test, which uses the adjectives of “single, distinct, and indivisible” to refer to the way in which a matter can be delim- ited and distinguished from matters of provincial concern. There is a solid case for a finding that GHG emissions are a single, dis- tinct, and indivisible form of pollution. GHG emissions comprise a defin- able group of seven gases that have a radiative effect on the atmosphere.120 These gases are known, scientifically measured, and subject to reporting requirements through the UNFCCC,121 and to mitigation commitments
115 GGPPA, supra note 5, Preamble. 116 Ibid. 117 Ibid. 118 Ibid. 119 Ibid. 120 UNFCCC, supra note 23 (GHGs are defined as “those gaseous constituents of the atmos- phere, both natural and anthropogenic, that absorb and re-emit infrared radiation”, art 1). 121 See also Report of the UNFCCC Reporting Guidelines on Annual Inventories for Parties Included in Annex I to the Convention, FCCC Dec 24/CP.19, UNFCCCOR, 2014, UN Doc FCCC/CP/ 2013/10/Add.3, 2 at 11 (the UNFCCC requires Parties to report on seven GHGs, namely: carbon dioxide (CO₂), nitrous oxide (N₂O), methane (CH₄), perfluorocarbons (PFCs), hydrofluorocarbons (HFCs), sulphur hexafluoride (SF₆), and nitrogen trifluoride (NF₃)). 222 Revue de droit d’Ottawa • 50:2 | Ottawa Law Review • 50:2 under the Paris Agreement.122 The GGPPA lists the same GHGs that Canada must report on annually to the UNFCCC.123 Whether they are characterized as a form of international air pollution, an atmospheric pollutant, or even a particular kind of pollution, the fact remains that they are discernible. The case of GHG emissions is distinguishable from that of the toxic substances under evaluation in the Hydro-Québec decision.124 The Supreme Court in that case was asked to consider the constitutionality of provi- sions regulating pollution under the CEPA.125 The majority ended up jus- tifying the provisions under the criminal law power and did not speak to the applicability of POGG, other than to caution that it raises “profound issues respecting the federal structure of our Constitution.”126 The dis- sent, however, expressed its concerns about using the national concern branch of POGG to justify the CEPA provisions because of their breadth and lack of definable boundaries. Writing for the dissent, former Chief Justice Lamer stated that the way in which toxic substances were defined meant that the legislation applied to a wide array of substances without any clear, discernable limits.127 The dissenting judges felt that a more cir- cumscribed definition of toxic substances, such as one that related to their “persistence and diffusion into the environment and the severity of their harmful effect or on the basis of their extra-provincial aspects,”128 would be required to show that the law was aimed at a distinct form of pollution, rather than pollution in general.129 As such, the dissenting judges deter- mined that the CEPA provisions lacked the singleness, distinctiveness, and indivisibility required for the national concern branch of POGG.130 There is a significant difference between the open category of substan- ces at issue in the Hydro-Québec case and GHGs, which are a specific set of gases that are nameable, definable, and measurable. They are listed in the international climate agreements as well as within the GGPPA, and they are subject to extensive reporting requirements. While it is true that GHG emissions are produced from a wide variety of activities, they are much more distinct, singular, and indivisible than the broad, undefinable, and
122 Paris Agreement, supra note 24, art 6. 123 GGPPA, supra note 5, s 190(2), Schedule 3. 124 Hydro-Québec, supra note 1. 125 Ibid. See also CEPA, supra note 7. 126 Hydro-Québec, supra note 1 at para 110. 127 Ibid at paras 69–70. 128 Ibid at para 75. 129 Ibid at paras 70, 74. 130 Ibid at para 75. Jurisdictional Wrangling Over Climate Policy in the Canadian Federation 223
non-discernable swath of substances being discussed by the Hydro-Québec dissent. The provinces have underscored the ubiquity of GHG emissions in their arguments, pointing to the fact that GHG emissions are generated from so many human activities.131 However, the ubiquity of GHG emissions does not change their single, distinct, and indivisible nature, but rather raises the question of whether federal legislation regulating GHG emis- sions is too great an intrusion into matters of provincial jurisdiction — a separate part of the Crown Zellerbach test to which I turn shortly. Before moving away from the “single, distinct, and indivisible” test, however, it is important to consider the provincial inability test. As previ- ously noted, this test is one of the means of determining whether a matter has the required singleness. When applied to the subject matter of GHG emissions, provincial inability supports their characterization as a single or uniform matter. Because the Government of Canada has national and international obligations to reduce GHG emissions, the non-cooperation of even one province to reduce them could jeopardize Canada’s ability to meet its goals. Parliament selected carbon pricing as its central policy tool for reducing GHG emissions because it sends a broad, economy-wide signal to economic decision-makers across the country. If it is applied in some jurisdictions, but not others, the effectiveness of the price signal is diluted and GHG emissions may not be reduced in line with national and international obligations.132 Non participation by some jurisdictions (especially high emitters) could lead to carbon leakage, placing greater pressure on participating jurisdictions. These risks are highlighted in the Preamble to the GGPPA, which states that “the absence of greenhouse gas emissions pricing in some provinces and a lack of stringency in some provincial greenhouse gas emissions pricing systems could contribute to significant deleterious effects on the environment … on human health and safety and on economic prosperity.”133 The provinces have argued that they are fully capable of regulating GHG emissions, and pointed to the fact that all provinces have some form of climate policy with the aim of reducing emissions. While it is true that provinces have jurisdiction to regulate intra-provincial GHG emissions (i.e.
131 See Ontario Factum, supra note 74 (Ontario raises this concern, referring to the “myriad of activities that generate greenhouse gas emissions” at para 14). 132 See e.g. Environment and Climate Change Canada, “Working Group on Carbon Pricing Mechanisms: Final Report” (2016) at 43–45, online (pdf): Government of Canada
134 See Constitution Act, 1867, supra note 7, ss 92(13), 92(9) (several provincial heads of power justify GHG regulations, such as property and civil rights and the licensing power). See also Chalifour, “Constitutional Authority to Levy Carbon Taxes”, supra note 6 at 191–94 (arguing that British Columbia’s carbon tax is better justified under the provincial licens- ing power, rather than the direct taxation power). 135 2018 SCC 48 [Pan-Canadian Securities]. 136 Ibid at para 100, citing General Motors of Canada Ltd v City National Leasing, [1989] 1 SCR 641 at 659, 58 DLR (4th) 255 [General Motors]. 137 Pan-Canadian Securities, supra note 135 at para 101, citing AG (Canada) v Canadian National Transportation Ltd, [1983] 2 SCR 206 at 267, 3 DLR (4th) 255. 138 Pan-Canadian Securities, supra note 135 at para 113, citing Reference re Securities Act, 2011 SCC 66 at para 121 [Securities Act Reference]. 139 Pan-Canadian Securities, supra note 135 at para 113. Jurisdictional Wrangling Over Climate Policy in the Canadian Federation 225
The reasoning in this recent Supreme Court decision supports a sim- ilar finding in the context of GHG emissions, and specifically theGGPPA , since the provinces are incapable of establishing a national carbon pricing system. Like the case of securities, “the fact that any one province could opt against participating in (or [could] subsequently resile from)”140 a cooperative national carbon pricing scheme justifies a federal act that would address the systemic risk of failing to achieve a given threshold of cumulative national GHG emissions reductions.
3. Is the Scale of Impact on the Provinces Reconcilable With the Distribution of Powers in the Constitution? The issue likely to generate the most controversy in the litigation is whether holding that Parliament has jurisdiction over GHG emissions under POGG’s national concern branch would have a scale of impact that is reconcilable with the division of powers. The courts have issued many cautions about using the national concern branch of POGG on the basis that an overly broad interpretation would risk disturbing the bal- ance of powers by assigning too much authority to Parliament. Instead, courts have chosen to justify federal laws under other powers, such as criminal law or even the emergency branch of POGG.141 As a result, only a few subject matters have been justified exclusively and explicitly under this branch. These include aeronautics,142 atomic energy,143 marine pollu- tion,144 and regulation of the National Capital Region around Ottawa.145 The courts have also justified legislation relating to federal corporations, interprovincial water pollution and international air pollution under the residual POGG power.146 A central theme in the provincial arguments challenging the GGPPA is the need for provincial autonomy and the risks of Parliament intruding
140 Ibid. 141 See e.g. Hydro-Québec, supra note 1; Re Anti-Inflation Act, [1976] 2 SCR 373, 68 DLR (3d) 452 [Anti-Inflation Referencecited to SCR]. 142 See Johannesson v Municipality of West St Paul (1951), [1952] 1 SCR 292, [1951] 4 DLR 609. 143 See Ontario Hydro v Ontario (Labour Relations Board), [1993] 3 SCR 327, 107 DLR (4th) 457. 144 See Crown Zellerbach, supra note 1. 145 See Munro v National Capital Commission, [1966] SCR 663, 57 DLR (2d) 753 [Munro cited to SCR]. 146 See Interprovincial Co-Operatives, supra note 113 at 511–15 (in which three of the four major- ity judges held that Parliament had jurisdiction over inter-provincial pollution under POGG); Canada Metal Co v R (1982), 144 DLR (3d) 124 at 129, 2 CCC (3d) 271 (MBQB) (upholding the federal Clean Air Act). 226 Revue de droit d’Ottawa • 50:2 | Ottawa Law Review • 50:2 too deeply into matters of provincial jurisdiction.147 Ontario, for instance, argued that justifying the GGPPA under POGG’s national concern branch would “seriously disrupt the balance of powers set out in the Constitu- tion” by displacing “broad swaths of exclusive provincial jurisdiction.”148 It argued that justifying the GGPPA under POGG would “radically alter the balance of the Canadian federation” and that it would grant to Parliament the “near-plenary power to regulate almost all aspects of Canadian soci- ety and economy.”149 Saskatchewan’s argument about the UCP of federal- ism also ultimately fits within this part of theCrown Zellerbach test, even though their factum does not frame it this way. The federalism argument is about whether granting Parliament jurisdiction over GHG emissions would be reconcilable with the balance of powers in our federation. The tone of these claims is alarming, but will very likely prove to be hyperbolic as the claims depend upon two tenuous premises, namely that the char- acterization of the subject matter of the legislation will be very broad, and second, that the courts will ignore or invalidate the double aspect doctrine.
a. Proper Characterization of the Subject Matter With respect to the first concern, it is only in the event of a very broadly defined subject matter, like “environmental protection” or “pollution,” that the risk of federal laws intruding too deeply into areas of provincial authority is a genuine one. The courts have been clear that broad, sweep- ing subject matters, such as the environment, are so vast and undefin- able that they cannot reasonably be assigned to either level of government without upsetting the balance of powers. Canada did not dispute this in its arguments.150 As Justices LeBel and Deschamps explain in Reference Re Assisted Human Reproduction Act, “[i]f the characterization of the pith and substance of a provision is too general, there is a danger of its being super- ficially connected with a power of the other level of government,” and the “extent of the overflow will also necessarily be exaggerated.”151 This is why the characterization exercise is so important, and why in the context of POGG, it requires not only characterizing the dominant purpose of the legislation, but also defining the precise subject matter to which national
147 See Saskatchewan Factum, supra note 62. 148 Ontario Factum, supra note 74 at paras 4, 67. 149 Ibid at para 82. 150 See e.g. Canada Factum for Saskatchewan, supra note 86 at para 88. 151 2010 SCC 61 at para 190 (although Justices LeBel and Deschamps did not concur with the outcome, this point was not in dispute) [Human Reproduction Reference]. Jurisdictional Wrangling Over Climate Policy in the Canadian Federation 227
concern jurisdiction will be applied (i.e. in the words of Justice Le Dain, that the subject matter be sufficiently single, distinct, and indivisible). When a subject matter is appropriately circumscribed, there is far less risk of intrusion. The Supreme Court recently clarified that the idea of co-operative federalism speaks to the need for courts to “avoid an expan- sive interpretation of the purpose of federal legislation which will bring it into conflict with provincial legislation.”152 In its factum in the Saskatchewan reference, Canada defined the sub- ject matter for POGG as “GHG emissions.”153 It then further character- ized the purpose of the GGPPA as “to incentivize the behavioural changes necessary to reduce GHG emissions” by ensuring that a minimum GHG price applies throughout the country.154 This characterization is closely reflected in the language and structure of theGGPPA , which functions to implement a fuel charge and an OBPS for large, trade-exposed industrial emitters. Some of the intervenors offered slightly different characteriz- ations of the matter. For example, the Attorney General of British Col- umbia submitted that the pith and substance is to establish a minimum price standard for GHG emissions across the country.155 Canada’s Ecofi- scal Commission suggested the matter could be characterized as “the control of extra-provincial and international air pollution caused by GHG emissions.”156 Another option would be to say that the GGPPA is aimed, in pith and substance, at controlling interprovincial and international air pollution by regulating national levels of GHG emissions, or progressive reduction of national GHG emissions.157 Saskatchewan suggested the pith and substance of the GGPPA is to “increase the cost of certain fuels by imposing pricing mechanisms.” This characterization focuses on pricing, while ignoring the GGPPA’s empha- sis on reducing GHG missions.158 Saskatchewan also argued that the sub- ject matter of GHG emissions is so broad that Parliament is attempting to “take over exclusive jurisdiction to regulate the environment and to deal with all kinds of pollution.”159 Similarly, Ontario argued that the pith
152 Orphan Well Association v Grant Thornton Ltd, 2019 SCC 5 at para 66 [Orphan Well]. 153 Supra note 86 at paras 2, 71. 154 Ibid at para 73. 155 British Columbia Factum, supra note 20 at para 30. 156 Ecofiscal Commission Factum,supra note 82 at para 6. 157 See generally Orphan Well, supra note 152 (a decision which is aligned with the polluter pays principle). 158 Saskatchewan Reply Factum, supra note 13 at para 68. 159 Ibid at para 64. 228 Revue de droit d’Ottawa • 50:2 | Ottawa Law Review • 50:2 and substance of the GGPPA is “to regulate all greenhouse gas emissions in Canada, regardless of their source.”160 Ultimately, the provinces vehe- mently argued that granting Parliament jurisdiction to enact the GGPPA would be too great an intrusion into provincial jurisdiction. Interestingly, Canada did a mid-course correction in the Saskatchewan hearing, clarifying the parameters of its proposed subject matter to be the “extra-provincial” and “cumulative” dimensions” of GHG emissions.161 It identified three aspects of its qualifier, including the cumulative atmos- pheric concentrations of GHG emissions, cumulative global and national impacts of climate change, and the cumulative addition of GHG emissions from each province on Canada’s total GHG emissions.162 In doing so, Can- ada attempted to offer an answer to the overbreadth argument, which was likely the strongest argument in the provinces’ corner. The court’s decision about how to characterize the subject matter and the Act’s purpose will be critical in its analysis. However, its treatment of the provincial arguments about exclusivity will also be crucial. I turn to this next.
b. Exclusivity The second premise underlying the provincial argument about over- breadth is that Parliament’s powers under the national concern branch of POGG will necessarily usurp or displace provincial GHG regulations and thereby upset the balance of powers. This premise, however, is on shaky ground. The provinces have argued that the national concern branch of POGG is somehow more exclusive than other powers. Indeed, the Sas- katchewan factum characterizes it as having an “extraordinary nature” which “displac[es] provincial powers altogether,”163 and Ontario, in oral submissions, stated that POGG is different — more exclusive and plen- ary — than other powers, going as far as arguing that the double aspect doctrine does not apply to POGG because it is not an enumerated head of power.164 This argument is unfounded: POGG is not more exclusive or plenary than other powers.
160 Ontario Factum, supra note 74 at para 2. 161 See Canada Factum for Ontario, supra note 89 at para 53 (this is how Canada characterized the subject matter in its factum in the Ontario reference). 162 See CBC Saskatchewan, “Day 2”, supra note 16 at 00h:02m:12s–00h:02m:38s. 163 Saskatchewan Reply Factum, supra note 13 at paras 3, 9–10. 164 See CBC Saskatchewan, “Saskatchewan Faces Off Against Federal Government Over Car- bon Tax” (13 February 2019) at 04h:10m:43s, online (video): YouTube
The general notion of exclusivity stems from the wording in sections 91 and 92 of the Constitution Act, 1867, which grant powers exclusively to Parliament or the provincial legislatures.165 It is this mention of exclusivity that led to early depictions by the Privy Council of jurisdictional powers as discrete, “watertight compartments,” intolerant of overlap.166 The courts soon recognized, however, that exclusive powers do not signal a full and complete occupation of a subject matter by one level of government. Indeed, the Privy Council in Hodge v The Queen recognized that subjects can have a double aspect, with one aspect justified under a provincial head of power, and another aspect justified federally.167 In the Local Prohibition Case, the Privy Council held both provincial and federal governments had concurrent jurisdiction over prohibition schemes.168 In the culmination of a series of decisions relating to prohibition, the Privy Council was asked to overrule Russell v R, in which the Court found that federal jurisdiction over prohibition was rooted in POGG.169 But in the Canada Temperance Federation case, the Privy Council reaffirmed its earlier finding that both federal and provincial governments had jurisdiction over prohibition, and that its finding 60 years earlier inRussell v R was valid.170 The Supreme Court has been unequivocal in noting that it has rejected the watertight compartments approach.171 So upon what authority did the provinces base their submissions that POGG would be more exclusive than other powers, and immune to the double aspect doctrine? Interestingly, the assertion seems to be based on a
165 Constitution Act, 1867, supra note 7, ss 91–92. 166 See Canada (AG) v Ontario (AG), [1937] UKPC 6 at 10, [1937] AC 326 (the metaphor of “watertight compartments” was used by the Privy Council to suggest that the categories of powers within sections 91 and 92 of the Constitution Act, 1867, are unimpeachable and air- tight, with little to no tolerance for spillover). The approach has been highly criticized and largely discredited. See Bruce Ryder, “The Demise and Rise of the Classical Paradigm in Canadian Federalism: Promoting Autonomy for the Provinces and First Nations” (1991) 36 McGill LJ 308 at 312. See also David M Beatty, “Polluting the Law to Protect the Environ- ment” (1998) 9:2 Const Forum Const 55 at 55. 167 [1883] UKPC 59 at 9, [1883] 9 AC 117. 168 Ontario (AG) v Canada (AG) et al, [1896] UKPC 20, [1896] AC 348 [Local Prohibition Case]. 169 [1882] UKPC 33, [1882] 7 AC 829. 170 Ontario (AG) v Canada Temperance Federation, [1946] UKPC 2 at 3, [1946] AC 193 (it is also in this case that the Privy Council developed the modern formulation of the national concern test of POGG). See also The Honourable Morris J Fish, “The Effect of Alcohol on the Canadian Constitution … Seriously” (2011) 57:1 McGill LJ 189 (for a review of the key decisions relating to prohibition). 171 See e.g. Rogers Communications Inc v Châteauguay (City), 2016 SCC 23 at para 37 [Rogers Communications]. 230 Revue de droit d’Ottawa • 50:2 | Ottawa Law Review • 50:2 phrase taken out of context. Saskatchewan’s reply factum relied upon the reference by Justice Le Dain in Crown Zellerbach to Justice Beetz’s state- ment in the Anti-Inflation reference that “where a matter falls within the national concern doctrine of the [POGG] power … Parliament has an exclusive jurisdiction of a plenary nature to legislate in relation to that matter, including its intra-provincial aspects.”172 Justice Le Dain was quot- ing Justice Beetz’s obiter comment from Anti-Inflation (made at a time when the “watertight” compartment view of powers was still de rigueur) about a theory of national dimensions suggested by Professor Dale Gib- son which contemplated “a concurrent or overlapping federal jurisdic- tion.”173 Justice Le Dain was not offering the phrase as a reflection of his own view that POGG conferred zero-sum exclusive and plenary powers, a view that fits the antiquated “watertight” approach to the division of powers. Indeed, in the very next paragraph Justice Le Dain cautions that the provincial inability test need not “go so far as to provide a rationale for the general notion, hitherto rejected in the cases, that there must be a plenary jurisdiction in one order of government or the other to deal with any legislative problem.”174 In other words, Saskatchewan’s reliance upon Crown Zellerbach in support of the notion that the national concern branch of POGG confers an exclusive, plenary power that displaces prov- incial power is misguided. The dissent in Hydro-Québec inadvertently fanned the fires of this idea that POGG confers a special sort of plenary exclusivity.175 The dis- sent offered the sensible caution that failing to delimit the precise nature of a subject matter could cause national concern jurisdiction to “rapidly expand to absorb all areas of provincial authority.”176 While this caution makes imminent sense in the context of vague subject matters such as “pollution” or the “environment,” the dissent muddied the waters by restating Justice Le Dain’s reference to Justice Beetz’s “watertight” char- acterization of national concern as conferring to Parliament “exclusive
172 Crown Zellerbach, supra note 1 at 433, cited in Saskatchewan Reply Factum, supra note 13 at para 40. 173 Crown Zellerbach, supra note 1 at 433. 174 Ibid at 434 (Justice Le Dain attributes his reference to exclusive powers to Justice Beetz in the Anti-Inflation Reference, whose preference for a compartmentalized view of powers is revealed by his support for a broad application of interjurisdictional immunity). See also Bell Canada v Québec (Commission de la Santé et de la Sécurité du Travail), [1988] 1 SCR 749, 51 DLR (4th) 161. 175 Supra note 1 at para 67. 176 Ibid. Jurisdictional Wrangling Over Climate Policy in the Canadian Federation 231
jurisdiction of a plenary nature to legislate in relation to that matter, including its intra-provincial aspects.”177 The dissent incorrectly attrib- uted the comment squarely to Justice Le Dain, rather than recognize it was made by Justice Beetz, and only offered by Justice Le Dain in the context of contrasting it to Professor Gibson’s more flexible, cooperative approach.178 Commentators have picked up on the inconsistency between Justice Le Dain’s statement in Crown Zellerbach and the alarming tone of the Hydro-Québec dissent, noting that “[t]his confusion over the effect of the national concern doctrine has persisted, to the point where the mem- bers of the Court have contradicted themselves.”179 The courts have an opportunity with the provincial reference cases to clarify that the national concern branch of POGG does not confer any special kind of “zero-sum,” super-exclusivity, as it might have done under a “watertight” interpret- ation of the Constitution. The courts have an opportunity to clarify the state of the law, which is that once an appropriate subject matter under POGG is identified and a law’s purpose properly characterized (using the interpretive principle of cooperative federalism to reduce the prospect of conflict), federal jurisdiction under POGG is still subject to existing doc- trines, such as the double aspect and ancillary powers doctrines.180 Although the provinces have not made this argument overtly, the way in which they characterize exclusivity sounds like they are suggesting that subject matters justified as a national concern should benefit from a form of interjurisdictional immunity. The doctrine of interjurisdic- tional immunity, which has been used to shield the “core” of laws justified under certain federal powers from provincial laws of general application, even from incidental effects,181 has been heavily criticized in light of con-
177 Crown Zellerbach, supra note 1 at 433. 178 The result has been that the idea of POGG as conferring some kind of special, plenary, exclu- sive jurisdiction continues to find echoes in commentary about the national concern branch of POGG. See e.g. Jean LeClair, “The Elusive Quest for the Quintessential “National Interest” (2005) 38:2 UBC L Rev 353; Hsu & Elliot, supra note 6; Kai D Sheffield, “The Constitutional- ity of a Federal Emissions Trading Regime” (2014) 4:1 Western J Leg Studies 1. 179 Sujit Choudhry, “Recasting Social Canada: A Reconsideration of Federal Jurisdiction Over Social Policy” (2002) 52:3 UTLJ 163 at 230, n 212. See also L Alan Willis, “The Crown Zeller- bach Case on Marine Pollution: National and International Dimensions” (1988) 26 Can YB Intl Law 235 at 244. 180 See e.g. Quebec (AG) v Canada (AG), 2015 SCC 14; Securities Act Reference, supra note 138 at paras 56, 59. 181 The doctrine of interjurisdictional immunity is a remnant from early conceptualizations of the division of powers which interpreted the word “exclusively” in ss 91 and 92 of the 232 Revue de droit d’Ottawa • 50:2 | Ottawa Law Review • 50:2 temporary interpretations of federalism.182 As such, the courts have held that it applies only to situations where precedents have established its application, such as federal works and undertakings, maritime law, bank- ing, and telecommunications.183 Efforts to invoke it in new contexts have been rejected.184 Indeed, the court has cautioned against its applicability to broadly defined powers such as “trade and commerce,” noting that doing so would lead to “an altogether different and more rigid and centralized form of federalism.”185 There is no precedent for the doctrine applying to the subject matter of GHG emissions , or any other variation of the subject matter. Applying interjurisdictional immunity to GHG emissions would run counter to the flow of constitutional jurisprudence, which empha- sizes cooperation and concurrency and provides doctrines for reconcil- ing laws related to similar matters. As such, interjurisdictional immunity should not provide ammunition for provincial arguments that conferring jurisdiction as a national concern would reduce the scope of application of otherwise validly enacted provincial GHG regulations. As noted earlier, in oral submissions in the Saskatchewan case, Ontario suggested that the double aspect doctrine does not apply to POGG. How- ever, they provided no support for this idea, which actually flies in the face of jurisprudence to the contrary.186 For example, in Multiple Access Ltd v McCutcheon, the Supreme Court applied the double aspect doctrine to
Constitution Act, 1867, as creating watertight compartments (supra note 7). The Supreme Court recently described it as follows: “[i]f the doctrine of interjurisdictional immunity applies, the impugned measure remains valid but has no application with regard to the core of the power of the other level of government that it impairs.” (Rogers Communications, supra note 171 at para 35). 182 See Canadian Western Bank v Alberta, 2007 SCC 22 at para 34 [Canadian Western Bank]. See also Eugénie Brouillet & Bruce Ryder, “Key Doctrines in Canadian Legal Federalism” in Peter Oliver, Patrick Macklem & Nathalie Des Rosiers, eds, The Oxford Handbook of the Canadian Constitution (New York: Oxford University Press, 2017) 415 at 429; Martin Z Olszynski, “Testing the Jurisdictional Waters: The Provincial Regulation of Interprovincial Pipelines” (2018) 23:1 Rev Const Stud 91 (reviewing the doctrines of interjurisdictional immunity at 96–97). 183 See Canadian Western Bank, supra note 182. See also Rogers Communications, supra note 171 at para 63. 184 See e.g. Insite, supra note 114; Carter, supra note 114; Bank of Montreal v Marcotte, 2014 SCC 55. 185 See Canadian Western Bank, supra note 182 at para 43. 186 See Rogers Communications, supra note 171. The provinces may be basing this argument on the Supreme Court’s holding in Rogers Communications that the double aspect doctrine did not apply in that case. However, this situation is distinguishable, because the Court in that case found that the pith and subject of the municipal measure in question was about radiocommunications, meaning it was not a law whose purpose addressed a provincial matter, which could be upheld as a double aspect. Jurisdictional Wrangling Over Climate Policy in the Canadian Federation 233 uphold very similar provincial and federal provisions relating to insider trading, with the federal provisions justified under POGG.187 Ultimately, the provincial arguments about exclusivity harken back to a period of time when jurisdictional powers were characterized as “watertight com- partments” or enclaves. The sharp edges of this view have been rejected in favour of a more flexible, evolutionary, and cooperative approach that allows laws made by provincial legislatures and the federal Parliament on similar subjects to peacefully co-exist, whenever possible.188 Recognizing the need for the Constitution to be interpreted in a way that adapts to new (often complex and multifaceted) social realities,189 this more cooperative approach rejects rigid applications of exclusivity. Instead, concurrent juris- diction has become commonplace in our federation, and cooperative fed- eralism is the interpretative refrain called upon to help work out the kinks. The double aspect doctrine has been important in the Canadian feder- ation, gaining prominence in an era where life is increasingly complex and subject to a growing body of legislation. Courts have provided numerous examples where both provincial and federal laws apply to the same subject matter,190 holding that as long as each law is justified under a valid head of provincial and federal power and do not conflict, the laws can operate concurrently. Only in the case of a genuine conflict would the doctrine of paramountcy apply to resolve the conflict in favour of the federal law. The fact that courts have interpreted paramountcy narrowly reflects a reality that permitting laws to co-exist whenever possible is the only practical way
187 [1982] 2 SCR 161, 138 DLR (3d) 1 [Multiple Access]. 188 See Securities Act Reference, supra note 138 at paras 56, 59. See also Edward A Fitzgerald, “The Constitutionality of Toxic Substances Regulation Under the Canadian Environmental Protection Act” (1996) 30:1 UBC L Rev 55 at 83, n 164, 98; Hogg, Constitutional Law, supra note 103, ch 15 at 15-38.9. 189 See Insite, supra note 114 (the doctrine of interjurisdictional immunity’s “premise of fixed watertight cores is in tension with the evolution of Canadian constitutional interpretation towards the more flexible concepts of double aspect and cooperative federalism” at para 70). 190 Examples include: representation of aliens by counsel before the Immigration and Refu- gee Board, highway traffic, securities regulations, insolvency, interest rates, and more. See e.g. Law Society of British Columbia v Mangat, 2001 SCC 67 at para 49. See also Carter, supra note 114 (“aspects of physician-assisted dying may be the subject of valid legislation by both levels of government … ” at para 53). 234 Revue de droit d’Ottawa • 50:2 | Ottawa Law Review • 50:2 forward in a complex, interrelated world.191 The Court in Canadian Western Bank v Alberta192 presented the double aspect doctrine as a “frank acknow- ledgement that numerous ‘matters’ are, by their very nature, impossible to categorize under one head of power.”193 The Supreme Court very recently reaffirmed the double aspect doctrine, stating that the doctrine “permits the provinces to legislate in pursuit of a valid provincial objective and Par- liament to do the same in pursuit of a separate federal objective.”194 The double aspect doctrine is essential to environmental protection in the Canadian federation, as there are many examples of matters that require both federal and provincial legislation. For instance, provinces can regulate water pollution under their jurisdiction over property and civil rights, but the federal government can also regulate water pollution that impacts fisheries through its jurisdiction over fisheries. Although marine pollution is a matter of federal jurisdiction under POGG, provinces regu- late discharges of pollution into the ocean from different sources, including sewage from coastal cities.195 While the Supreme Court granted Parliament jurisdiction over the National Capital Region as a matter of national con- cern in Munro v National Capital Commission,196 the City of Ottawa leads municipal planning and development approvals through provincially dele- gated authority.197 Absent a genuine conflict, both provincial and federal laws are valid and may operate concurrently.198
191 See Multiple Access, supra note 187 (the leading case in this matter). The courts have offered guidance as to when laws conflict, including an operational conflict where it is impossible to comply with both, or where the operation of a provincial law has the effect of frustrating the purpose of a federal law. See e.g. Alberta (AG) v Moloney, 2015 SCC 51. See also Brouillet & Ryder, supra note 182 at 429; Allan Ingelson, “Strategic Planning for Energy Development in Canada” (2015) 6:2 George Washington J Energy & Environmental L 35 at 37–38, n 52; Elgie, supra note 6 at 88. 192 Supra note 182. 193 Peter C Oliver, “The Busy Harbours of Canadian Federalism: The Division of Powers and its Doctrines in the McLachlin Court” in David A Wright & Adam M Dodek, eds, Public Law at the McLachlin Court: The First Decade (Toronto: Irwin Law, 2011) 167 at 178. 194 Pan-Canadian Securities, supra note 135 at para 114. 195 See e.g. Ministry of Environment, Lands and Parks, “Re: Waste Management Permits PE-00270 (Macaulay Point Outfall) and PE-01877 (Clover Point Outfall) — Marine Mon- itoring Programs” (19 August 1999) at 1–4, online (pdf): Government of British Columbia
The ancillary powers doctrine further supports concurrent applica- tion of federal and provincial laws by tolerating the inevitable incidence of these laws on the other’s jurisdiction.199 As the Supreme Court explained in Reference re Assisted Human Reproduction Act, laws may “validly over- flow from the jurisdiction of the government that enacted them so long as the overflow remains ancillary.”200 Provisions that have minimal ancillary effects are nonetheless constitutionally viable if they are functionally or rationally linked to the validly enacted legislation. Even provisions that overflow into the other jurisdiction’s sphere in a more significant way can be justified if they are linked to the main legislation and truly necessary.201
c. Scale of Impact of Federal Regulations on GHG Emissions Having clarified that POGG benefits from no special kind of exclusivity, let us return to the question of whether the GGPPA would have a scale of impact that is reconcilable with the division of powers if determined to be valid as a matter of national concern. One way to answer this would be to determine what constitutional space would remain for provinces to legislate in relation to GHG emissions. Provinces retain jurisdiction over economic activities within their boundaries and can continue to regulate the GHG emissions from industries operating in the provinces. They can continue to price carbon through carbon taxes or cap and trade systems that meet the federal threshold, as explicitly recognized within the GGPPA. They can impose technology standards on GHG-intensive production processes, modify building codes to reduce GHG emissions, or foster the development of renewable energy. There is quite a broad range of activ- ities that the provinces could legislate under their respective spheres of authority, such as the vast property and civil rights, natural resources, licensing, and taxation powers that would not conflict with the federal law. It is also worth noting that the GGPPA was designed as a backstop meas- ure that only comes into effect if a province fails to establish its own price equivalent to the benchmark, using whichever of the two systems (tax or cap and trade) it prefers. This is an illustration in design to minimize intrusion on provincial jurisdiction. The courts should take this design feature into consideration. As the Supreme Court held in the Munro deci- sion pertaining to jurisdiction over the National Capital Region, “it was only after prolonged and unsuccessful efforts to achieve the desired result
199 See General Motors, supra note 136. See also Choudhry, supra note 179 at 230, n 212. 200 Human Reproduction Reference, supra note 151 at para 188. 201 Ibid at paras 188–89. 236 Revue de droit d’Ottawa • 50:2 | Ottawa Law Review • 50:2 by such co-operation that Parliament decided to confer upon the National Capital Commission the powers necessary to enable it to carry out the zoning contemplated in the Master Plan.”202 There is an analogy to be made here, where the federal government has attempted to incite provin- cial pricing policies in advance of imposing a federal law. To summarize, in light of the double aspect and ancillary powers doc- trines, contemporary interpretations limiting the application of para- mountcy, and the principle of cooperative federalism, which favours an interpretation of statutes that allows them to operate concurrently,203 it is difficult to see the GGPPA as having a scale of impact that is irreconcilable with the balance of powers in our federation. With its backstop design, the legislation is designed to apply in a way that minimizes intrusion. The provincial claims that the GGPPA upsets the balance of powers is based on a broad construal of the subject matter and the legislation, along with an outdated, now defunct, conceptualization of powers as discrete enclaves intolerant of overlap and concurrency. The provincial arguments ignore the existence of the double aspect doctrine and the current tide of consti- tutional jurisprudence which favours cooperation. Additionally, Canada’s refinement of the subject matter for which it claims jurisdiction — cumu- lative dimensions of GHG emissions — offers one way to narrow the scope of the subject matter to explicitly recognize the ongoing constitutional space for provincial legislation relating to, or incidentally affecting, GHG emissions. The provincial objections appear to be at least partly driven by Parlia- ment’s choice of carbon pricing as a policy instrument. Both provinces argue they should have the right to choose how they reduce GHG emissions (presuming they intend to do so) and how quickly. At the end of the day, if Parliament has the constitutional authority to regulate a given subject mat- ter and legislates within that jurisdiction, the choice of instrument it uses to achieve its objective is not grounds to invalidate it. That argument is a pol- itical one that is outside the constitutional analysis. Similarly, if Parliament has determined that national levels of GHG emissions should be reduced in accordance with a scientifically determined threshold, and that subject matter is found to be within the scope of its authority under POGG, then the method it chooses to achieve its goal is not subject to scrutiny.
202 Munro, supra note 145 at 667. 203 PanCanadian Securities, supra note 135 at para 17. Jurisdictional Wrangling Over Climate Policy in the Canadian Federation 237
B. What Are the Contours of “Temporary Measures” in the Context of POGG’s Emergency Branch, Given the Planetary and Geological Scale of Climate Change? POGG’s emergency branch may seem like a last resort as a source of jurisdic- tional authority for federal GHG regulations, but the rapidly evolving state of climate science suggests it is an increasingly credible possibility. I have analyzed its potential to justify federal GHG regulations in a previous arti- cle,204 and some of the intervenors in the provincial references have argued that the GGPPA is justifiable under the emergency branch of POGG.205 While Canada did not claim jurisdiction under this branch of POGG, the lawyer representing Canada stated at the end of her oral arguments that Canada would not object to a finding of jurisdiction under this branch.206 The emergency branch of POGG grants the federal government broad legislative powers to address situations of emergency.207 It is distinct from the national concern branch in that it justifies legislation that intrudes on matters of provincial jurisdiction if needed to deal with the emergency. In other words, there is no requirement for the impact on provinces to be reconcilable, given that it is meant to address an emergency with tem- porary measures.208 It has been interpreted cautiously in the past,209 but broadly enough to justify a variety of legislative measures (such as price and rent controls) in times of war, apprehended insurrection, and to deal with inflation.210 For instance, the Supreme Court characterized rapidly
204 Chalifour, “Constitutional Authority to Legislate GHG Emissions” supra note 6 at 355–60. 205 See In the Matter of the Greenhouse Gas Pollution Pricing Act, Bill C-74, Part 5 and in the Matter of a Reference by the Lieutenant Governor in Council to the Court of Appeal for Saskatchewan Under the Constitutional Questions Act, 2012, ss 2012, c C-29.01 (Factum of the intervenor David Suzuki Foundation); In the Matter of a Reference to the Court of Appeal Pursuant to Section 8 of the Courts of Justice Act, RSO 1990, c. C.34, by Order-in-Council 1014/2018 Respecting the Constitution- ality of the Greenhouse Gas Pollution Pricing Act, Part 5 of the Budget Implementation Act, 2018, No. 1, SC 2018, c. 12 (Factum of the David Suzuki Foundation (Motion for Leave to Intervene)). 206 See CBC Saskatchewan, “Day 2”, supra note 16 at 03h:05m:07s. 207 See Anti-Inflation Reference, supra note 141 at 461. 208 Ibid. 209 For instance, most of the federal measures under the New Deal legislation enacted in the 1930s to address the Depression were held to be unconstitutional on the basis that the Depression did not constitute an emergency (in the Privy Council’s view). Hogg suggests that the court may also have been influenced by the permanent character of much of the legislation. See Hogg, Constitutional Law, supra note 103, ch 17 at 17-21. 210 See e.g. Fort Frances Pulp and Paper Co v Manitoba Free Press Co, [1923] UKPC 64, [1923] 3 DLR 629; Reference re Wartime Leasehold Regulations, [1950] SCR 124, [1950] 2 DLR 1; Refer- ence to the Validity of Orders in Council in relation to Persons of Japanese Race, [1946] SCR 248, [1946] 3 DLR 321. 238 Revue de droit d’Ottawa • 50:2 | Ottawa Law Review • 50:2 rising inflation in the 1970s as an economic crisis “imperiling the well-be- ing of the people of Canada as a whole and requiring Parliament’s stern intervention in the interests of the country as a whole.”211 The test for determining jurisdiction under the emergency branch requires a finding of emergency, and consideration of the nature of the legislation enacted to address the emergency, since this branch of POGG only justifies tem- porary legislation.
1. A Climate Emergency? Could climate change be considered an emergency that warrants the kind of federal pricing policy seen in the GGPPA? There is a very compelling argument to be made that climate change is both a planetary and a national emergency. At the planetary level, we are now experiencing profound impacts from the current level of warming, which scientists estimate at 1 degree Celsius.212 Scientists are discovering that, for the most part, they have been too conservative in their estimates of the impacts of warm- ing. A recent report by the Intergovernmental Panel on Climate Change (IPCC) on the state of climate science and the 1.5 degree threshold under- scored the urgency of the situation, concluding that “rapid, far-reaching and unprecedented changes in all aspects of society” are required to keep temperature gain to between 1.5 and 2 degrees Celsius.213 It provided a twelve-year timeframe for action, noting that the actions taken up to 2030 will be decisive in whether we can avoid crossing the 1.5 degree threshold. The report explains that a difference of 0.5 degrees is highly consequential in terms of increasing the loss of human life, health risks, environmental damage, and economic implications associated with climate change.214 Not only is the window of time within which to make these profound changes getting shorter, the costs of making those changes grow with
211 Anti-Inflation Reference, supra note 141 at 425. 212 See Intergovernmental Panel on Climate Change, “Summary for Policymakers of IPCC Special Report on Global Warming of 1.5°C Approved by Governments” (8 October 2018), online (pdf):
215 Ibid at 20. See also Nathan Hultman, “We’re Almost Out of Time: The Alarming IPCC Cli- mate Report and What to do Next” (16 October 2018), online: Brookings
2. Is the GGPPA a Temporary Measure? There is not much guidance from the courts to help define what a tem- porary measure is, though it is clear that the nature of the emergency will be relevant. In light of this, it is interesting to consider what could be considered temporary in the context of climate change, given that it is a planetary level process with built-in inertia due to the interactions of complex atmospheric systems, and given that it stands to have grave consequences for human (and non-human) well-being and survival. It would seem appropriate for courts to take this context into account in
220 See Environment Canada, “Canada’s Sixth National Report on Climate Change: Actions to Meet Commitments Under the United Nations Framework Convention on Climate Change” (2013) at 120, online (pdf): Government of Canada
determining the time horizon for which measures could be justified under this branch of POGG. There are several ways to characterize the timeframe of the GGPPA given its goal of addressing the climate emergency. One could argue that measures to reduce GHG emissions, such as a national carbon price, are necessarily temporary since such measures will become moot by virtue of a successfully decarbonized economy. When will Canada be on a secure path to de-carbonization? Canada’s long-term GHG target calls for an 80 percent reduction in net GHG emissions by 2050, from a 2005 base- line, which it states is consistent with the Paris Agreement’s 1.5 to 2 degree goal.225 One might say that emergency measures are required for the next thirty-one years (to 2050), which is the point at which the international community has said emissions must be net zero (no more being emitted than absorbed). Another credible option would be to set the timeframe as 11 years (to 2030), which aligns with the IPCC’s 1.5-degree report. This would be more palatable to courts than thirty-one years. It is also legit- imate, since it corresponds with Canada’s national target under the Paris Agreement and is the timeframe identified by the IPCC as the crucial one within which rapid decarbonisation must take place. Yet another way to frame the GGPPA as a temporary measure would be to point to the five- year schedule established for the carbon price, which rises in $10 incre- ments up until 2022.226 While the legislation is not set to expire at that time, the Pan-Canadian Framework included a commitment to review the overall approach to carbon pricing and confirm a path forward in early 2022.227 This marks a point in time at which the emergency justifying the GGPPA as a means of setting in motion the transition to a low-carbon economy could be deemed to have ended, or at least require revisiting. The courts could decide that the national carbon price is justified under the emergency branch of POGG only within one of these timeframes, in order to bring it within the bounds of what the courts would tolerate as temporary. Alternatively, the courts could also leave the issue unanswered, holding the GGPPA to be justifiable as a temporary emergency measure
225 See Environment and Climate Change Canada, “Canada’s Mid-Century Long-Term Low- Greenhouse Gas Development Strategy” (Gatineau: Environment and Climate Change Canada, 2016) at 3, online (pdf): Government of Canada
228 Anti-Inflation Reference, supra note 141 at 427. Jurisdictional Wrangling Over Climate Policy in the Canadian Federation 243
rare, the stakes of climate change are high enough to warrant its use. It is hard to think of a greater emergency than changes to the atmosphere that affects the very liveability of our planet.
C. Will the Courts Clarify Their Criteria for Distinguishing Between Regulatory Charges and Taxes to Take Better Account of Economic Instruments Such as Carbon Pricing for Constitutional Purposes? Parliament has broad powers of taxation under subsection 91(3) of the Constitution Act, 1867.229 Although Canada argued in the alternative that the GGPPA could be justified under its taxation powers, its main argu- ment was that the carbon price is a regulatory charge ( justifiable under the national concern branch of POGG), as it is not aimed at raising revenue for general purposes, but rather reducing GHG emissions.230 In support of its argument that the GGPPA is not, in pith and substance, a revenue-raising instrument, Canada noted that Parliament will retain no revenue from the carbon price. If it implements the backstop measure in a province or territory, all revenue generated will be returned to that jurisdiction or its residents.231 Somewhat surprisingly, Saskatchewan conceded in its factum that Par- liament has authority to impose a federal carbon tax, stating that it “would have no constitutional objection if the federal government adopted a national carbon tax that applied uniformly all across the country … [or that] provided for variations based on objective criteria.”232 In fact, Saskatchewan
229 Supra note 7, s 91(3). 230 See Canada Factum for Saskatchewan, supra note 86 at paras 4, 130. See also Rachel Aiello, “Proposed Carbon Pricing Plan ‘Not a Cash Grab’: McKenna”, CTV News (last modified 15 January 2018), online:
of Manitoba
1. Is the Carbon Price a Tax or a Regulatory Charge? The courts have had numerous occasions to determine whether a measure is, in pith and substance, a tax or a regulatory charge. Because many levies will have elements of taxation and regulation, the courts must determine the primary purpose of the measure. In the leading case on this distinc- tion, Westbank First Nation v British Columbia Hydro and Power Authority,239 the Supreme Court provided a list of three possibilities for what might be the dominant purpose of a given levy:
(1) to tax, i.e., to raise revenue for general purposes; (2) to finance or constitute a regulatory scheme, i.e., to be a regulatory charge or to be ancillary or adhesive to a regulatory scheme; or (3) to charge for services directly rendered, i.e., to be a user fee.240 This list of categories does not capture the full range of purposes for which levies may be implemented. In particular, the categories fail to provide a clear space for measures whose primary purpose is to create a price sig- nal through an economic instrument intended to change behaviour. Eco- nomic instruments are increasingly recognized as legitimate policy tools for governments to use, especially when wishing to shift economic behav- iour over a period of time. I believe that the court should expand this list of possibilities to add a fourth element, namely “to impose a price sig- nal intended to change economic behavior, i.e., to internalize an environ- mental externality.” However, short of this new category, I will explain why I believe the courts will find the carbon price more closely resembles category 2, a regulatory charge, rather than a tax.241 It is clear that the car- bon pricing backstop is not a charge for services rendered, or a user fee. In Westbank, the Supreme Court drew upon a long line of cases to define a tax as meeting five criteria:
(1) compulsory and enforceable by law; (2) imposed under the authority of the legislature; (3) levied by a public body; (4) intended for a public purpose; and, (5) unconnected to any form of a regulatory scheme.242
239 [1999] 3 SCR 134, 176 DLR (4th) 276 [Westbank cited to SCR]. 240 Ibid at para 30. 241 See generally Chalifour, “Carbon Taxes”, supra note 6. 242 Westbank, supra note 239 at para 43. See also 620 Connaught Ltd v Canada (AG), 2008 SCC 7 at paras 19, 22 [620 Connaught]. 246 Revue de droit d’Ottawa • 50:2 | Ottawa Law Review • 50:2 The Court noted that many regulatory charges and taxes share the first four characteristics, rendering its fifth criterion determinative. In other words, the main feature that distinguishes a tax from a regulatory charge is whether the levy is connected to a regulatory scheme.
2. Is the Carbon Price Connected to a Regulatory Scheme? To determine whether a levy is connected to a regulatory scheme, the courts must first identify a relevant regulatory scheme (Step 1) and then determine whether there is a nexus between the regulatory scheme and the revenues generated from it (Step 2).
a. Step 1: Is There a Relevant Regulatory Scheme? To identify a relevant regulatory scheme, the court suggests looking for the following criteria, though it emphasizes that the list is meant as a guide, not a rigid or exhaustive list:
(1) a complete, complex and detailed code of regulation; (2) a regulatory purpose which seeks to affect some behaviour; (3) the presence of actual or properly estimated costs of the regulation; (4) a relationship between the person being regulated and the regulation, where the person being regulated either benefits from, or causes the need for, the regulation.243 Ontario did not dispute the presence of a regulatory scheme in either chal- lenge.244 Saskatchewan, anticipating that Canada will argue that the char- ges in Part 1 of the GGPPA are part of the broader regulatory scheme in Part 2 of the GGPPA, simply reiterated its argument that Part 2 of the GGPPA is ultra vires.245 Canada submitted that the regulatory charge is part of the relevant regulatory scheme contained within the GGPPA, and addressed each of the criteria.246 Parts 1 and 2 of the GGPPA, for example, constitute a complete, complex, and detailed code of regulation for the charge. The explicit regulatory purpose of the GGPPA is to affect behaviour, namely to encourage choices that lead to reduced GHG emissions. The costs of the measure will be estimated by the Department of Finance Canada.247
243 Westbank, supra note 239 at para 44. 244 See Ontario Factum, supra note 74 at paras 102–12. 245 See Saskatchewan Factum, supra note 62 at para 56. 246 See Canada Factum for Saskatchewan, supra note 86 at para 118. 247 See GGPPA, supra note 5, s 255(3)(c) (“[i]f the Minister accepts the request, he or she must not disclose the information unless the disclosure … is made to the Minister of Finance for the purpose of developing policy related to the pricing of greenhouse gas emissions”); The Jurisdictional Wrangling Over Climate Policy in the Canadian Federation 247
The entities being regulated cause the need for the regulation. This latter point could be characterized in one of two ways: one, provinces to which the backstop will apply created the need for the backstop by not opting to impose their own carbon price; or two, GHG emitting entities cause the need for the regulation by contributing to rising GHG emissions.248
d. Step 2: Is There a Relationship Between the Regulatory Charge and the Regulatory Scheme? This is the part of the test that both Saskatchewan and Ontario submitted is not met, and which is at the heart of this argument.249 Here, the court will examine whether there is a relationship between the charge and the overall regulatory scheme.250 This connection may be established in one of two ways. First, the connection may be shown to exist by demonstrating a link between the revenue generated by the charge and the costs of the regulatory framework. Alternatively, the connection may be established by showing that the charge has a regulatory purpose — that the charge itself constitutes the regulatory purpose.251 Saskatchewan and Ontario argued that the regulatory charge in the GGPPA fails to meet the first test. They pointed to the legislated require- ment that revenue generated by the charge be returned to the province of origin, rather than being earmarked for a regulatory purpose, such as GHG mitigation. Since the GGPPA requires revenue generated by the charge to be returned to the relevant province, the revenue would not be used to defray the costs of implementing the law nor to advance its regulatory purpose. As such, the provinces argued, it would not meet this first branch
Honourable Catherine McKenna & The Honourable William Francis Morneau, “Explana- tory Notes Relating to the Greenhouse Gas Pollution Pricing Act and Related Regulations” (last modified 15 January 2018), online (pdf):Government of Canada
252 See Canada Factum for Saskatchewan, supra note 86 at para 123. 253 See 620 Connaught, supra note 242 at para 20, citing Westbank, supra note 239 at para 29, referring to Ottawa-Carleton (Regional Municipality) By-law 234-1992 (Re), [1996] OMBD No 553 (QL) and Cape Breton Beverages Ltd v Nova Scotia (AG), 144 DLR (4th) 536, 158 NSR (2d) 132. 254 620 Connaught, supra note 242 at para 48. 255 Supra note 242. 256 Ibid. 257 Ibid at para 48. Jurisdictional Wrangling Over Climate Policy in the Canadian Federation 249
be eliminated. Saskatchewan, for instance, argued that holding a measure to be a charge (and not a tax) simply by asserting that the purpose of a levy is to change behaviour would be to “largely wipe out the distinction between taxes and regulatory charges” and undermine the limitations on federal taxation created by sections 53 and 125 of the Constitution Act, 1867.258 These arguments would require the courts to eliminate the second leg of the connection test. The submissions raise important tensions over the scope of Parliament’s ability to impose regulatory charges aimed at changing behaviour, and underscore the need to clarify jurisdictional authority for both levels of government to implement pricing mechan- isms intended to address environmental challenges. The courts will have an important opportunity in these reference cases to clarify the relationship required, which is important given the increas- ing prevalence of economic instruments such as carbon pricing and environmental taxes. These types of measures are being implemented by governments aiming to shift producer and consumer behaviour towards environmentally responsible choices in a cost-effective way. We will need to grapple with the constitutional authority under which governments can implement economic instruments. Resolving the question of whether such measures should be subject to the requirements of sections 53 and 125 of the Constitution Act, 1867 requires considering the purpose of these sections, and how those purposes are best advanced in the context of environmentally motived measures. If the courts were to hold that the GGPPA imposes a tax, rather than a regulatory charge, the carbon price would not only be subject to section 125 of the Constitution Act, 1867, but would also need to comply with sec- tion 53. Section 53 requires that tax bills originate in the House of Com- mons.259 In Eurig Estate (Re), the Supreme Court interpreted section 53 and clarified that its purpose is to prohibit any body other than the elected legislature from imposing a tax.260 Because the GGPPA originated in the House of Commons, Canada asserts it meets the requirements of section 53. The amount and timeframes for the charges are imposed directly in the GGPPA and any authority to modify the rate is expressly delegated
258 See Saskatchewan Factum, supra note 62 at para 57. 259 See Constitution Act, 1867, supra note 7, s 53. See also 620 Connaught, supra note 242 at paras 4–6, citing Eurig Estate (Re), [1998] 2 SCR 565 at paras 30–32, 40 165 DLR (4th) 1 [Re Eurig]. 260 Re Eurig, supra note 259 at para 30. 250 Revue de droit d’Ottawa • 50:2 | Ottawa Law Review • 50:2 in subsection 166(4) of the legislation. The courts have held that the imposition of a tax may be delegated if this is done so expressly and unambiguously.261 The provinces argued, however, that the law’s backstop mechanism is what constitutes an improper delegation of taxation powers. Because of its design as a backstop measure, the GGPPA will only apply to provinces listed in Schedule 1, the determination of which will be made by the Gov- ernor-in-Council based on whether the provinces have implemented an equivalent carbon price (one that meets a test of stringency).262 The prov- inces argue that because the Governor-in-Council decides which prov- inces the measure will apply to, it infringes section 53. Canada’s response to this was that the GGPPA defines the parameters that must guide the Governor-in-Council’s decision to list the provinces to which the charge will apply, namely that the primary consideration must be the stringency of provincial pricing mechanisms.263 Canada further argued in its oral sub- missions that allegations of improper use of this delegated power would be a matter for judicial review, and not relevant to the Constitutional issue. In the end, this issue raises important questions about how economic instruments that generate revenue but have behaviour modification as their primary purpose are best justified under the Constitution. Even if the courts were willing to broaden the interpretation of the federal taxa- tion power to justify measures that do not have raising revenue as a dom- inant purpose, this does not address the section 125 exemption which would undermine the behaviour modification purpose of environmentally motivated charges. In this case, the GGPPA meets the criteria for being a regulatory charge, as long as the courts find that the charge is sufficiently tied to the regulatory scheme under the second leg of the Westbank con- nection test. This will, in my view, require the courts to take into con- sideration the way in which revenues are used since this will help uncover whether the measure is, ultimately, about filling up government coffers for general purposes or genuine environmental policy. In this case, I believe the evidence speaks to the environmental purpose of the charge, but it remains to be seen whether the considerable revenues generated by car- bon pricing will distract the courts from the fundamental purpose of the test.
261 See Ontario English Teachers’ Assn v Ontario (AG), 2001 SCC 15 at paras 74–77. 262 Supra note 5, ss 166(3), 189(2). 263 Ibid, s 166(3). See also Canada Factum for Saskatchewan, supra note 86 at para 138. Jurisdictional Wrangling Over Climate Policy in the Canadian Federation 251
CONCLUSION In this article, I examined several of the constitutional law issues that the Saskatchewan and Ontario Courts of Appeal, and almost certainly the Supreme Court of Canada, will need to grapple with in response to the challenges of the GGPPA’s constitutionality. I examined the contours of the national concern branch of POGG, putting to rest once and for all (I hope) the argument that this power is, as a whole, more exclusive and zero-sum than others, and immune from the double aspect doctrine. I have also shown that there is genuine merit to the argument that the GGPPA could be authorized under the emergency branch of POGG, given the modest evidentiary threshold required for finding an emergency and the ways in which the temporal requirement could be met. Finally, I showed why I believe the GGPPA constitutes a valid regulatory charge, and not a tax, even in the confines of jurisprudence with little experience inter- preting behaviour-changing economic instruments. My analysis of these questions was conducted in the context of broader questions raised by the litigation, such as the extent to which courts will take the magnitude and gravity of the climate challenge into consideration in interpreting the constitutionality of the GGPPA, especially given its implications for funda- mental rights and indigenous sovereignty, and how it will do this in a way that safeguards the constitutional sphere of provincial authority. Climate change illustrates how small our planet really is and calls upon us to cooperate on a rapid global energy transition in an unprecedented way. Canada has responsibilities to address its share of GHG emissions, and the Pan-Canadian Framework sets out a plan wherein provinces, ter- ritories, and the federal government have their respective roles to play in moving the country in that direction. The work ahead is not without diffi- culty, and resistance by some provinces to the central piece of legislation within the Pan-Canadian Framework, the GGPPA, speaks perhaps more to this difficulty than to constitutional law. However, the provincial refer- ence cases also raise age-old tensions about the federal-provincial balance of power in our country. At the end of the day, the provincial references challenge the courts to apply a Constitution drafted over 150 years ago to one of the most com- plex and daunting challenges of our time. A major theme of the provincial arguments is that upholding the GGPPA would have the effect of under- mining federalism and the autonomy of provincial governments. But would striking it down advance federalism? As the Supreme Court stated 252 Revue de droit d’Ottawa • 50:2 | Ottawa Law Review • 50:2 in R v Comeau, “[f]ederalism refers to how states come together to achieve shared outcomes, while simultaneously pursuing their unique interests.”264 My analysis of the arguments in the cases suggests that there is a way for- ward which recognizes the ample jurisdictional space for both provinces and Parliament to address GHG emissions. Federalism not only allows, but argues in favour of, all governments in Canada coming together to address the shared outcome of a stable climate. Ultimately, this is the basis of our social and economic well-being and even our ultimate survival. Canadian courts are accustomed to adapting the Constitutional text so it can respond to modern problems, and they will no doubt have to be flexible and responsive in determining how to divvy up jurisdictional responsibility over what is proving to be one of the most serious and con- sequential challenges of our time. In the words of Justice La Forest:
The all-important duty of Parliament and the provincial legislatures to make full use of the legislative powers respectively assigned to them in protecting the environment has inevitably placed upon the courts the burden of progressively defining the extent to which these powers may be used to that end. In performing this task, it is incumbent on the courts to secure the basic balance between the two levels of government envisioned by the Constitution. However, in doing so, they must be mindful that the Constitution must be interpreted in a manner that is fully responsive to emerging realities and to the nature of the subject matter sought to be regulated. Given the pervasive and diffuse nature of the environment, this reality poses particular difficulties in this context.265 It may be difficult, but not impossible. It is critical that in analyzing the issues before them in the provincial references, the courts do not lose sight of the requirement for our Constitution to respond to the unpreced- ented reality of climate change. Given the urgency with which effective legal action is required to address the problem, the courts must ensure that no constitutional gaps are created. Gaps are not only anathema to the Constitution,266 but in this case could be the crack through which our country’s ability to respond effectively to climate change could fall. My analysis here and those I have done in the past continue to show that proper interpretation of the heads of power contained in the Consti- tution that create no legal vacuums lead to a finding of ample jurisdictional
264 2018 SCC 15 at para 78. 265 Hydro-Québec, supra note 1 at para 86. 266 See Securities Act Reference, supra note 138 at para 83. Jurisdictional Wrangling Over Climate Policy in the Canadian Federation 253
space for the panoply of federal and provincial legislation that is needed to effectively reduce GHG emissions in Canada, including the GGPPA. The division of powers allows for Parliament and the provinces to enact legislation within their respective spheres of authority. The courts are well equipped with a set of principles that allows these laws to peacefully co-exist as much as possible, in the spirit of cooperative federalism. The courts have long recognized “[t]he need to adapt the constitutional text to meet changing conditions in society” and that “the very preservation of the constitutional order depends on this ability.”267 Indeed, the Constitution has embedded within it flexibility, adaptability, and a fundamental ability to change and grow with the times, reflected in the enduring metaphor of the living tree.268 Given that trees remove CO2 from the atmosphere, it would be apt for the metaphorical tree to do the same in supporting an interpretation of the Constitution Act, 1867 that enables a full suite of effective, mutually-reinforcing climate policies across the federation. This is what climate federalism requires.
267 Brouillet & Ryder supra note 182 at 418. 268 See Edwards v Canada (AG), [1929] UKPC 121, [1930] AC 124. See also Brouillet & Ryder, supra note 182 at 419, citing Robert J Sharpe & Patricia I McMahon, The Persons Case: The Origins and Legacy of the Fight for Legal Personhood (Toronto: University of Toronto Press, 2007) at 6. The living tree metaphor has been applied in the context of cases determining whether marriage can apply to same-sex couples (see Reference re Same-Sex Marriage, 2004 SCC 79) and determining whether unemployment insurance in section 91(2A) of the Con- stitution Act, 1867, supra note 7, can include parental and pregnancy leaves (see Reference re Employment Insurance Act (Can), ss 22 and 23, 2005 SCC 56).