Climate litigation updates: Oh Canada!

Closer to my Green Mountain home, three appellate courts in Canada have now ruled on the constitutionality of the country’s Greenhouse Gas (GHG) Pollution Pricing Act. The Courts of Appeal for Ontario and Saskatchewan have held it constitutional while the Court of Appeal for Alberta has held the opposite. The Canadian Supreme Court will hear argument on this split at the end of March.

While the three decisions together reference the Paris Agreement almost 90 times, they do not significantly rely on it when determining whether Parliament’s legislative act violates Canada’s constitutional separation of powers between federal and provincial governments.

All three cases, brought by a combination of provincial and subregional governments, First Nations, and NGOs, rest on a similar view of the Act’s legislative history that references the importance of the Paris Agreement. As the Ontario appellate court writes, “Canada’s commitments under the Paris Agreement were part of the impetus for the Act.” The historical timeline for the Act’s genesis generally goes like this:

  • Canada adopted the Paris Agreement in 2015 and made its NDC pledge to reduce GHG emissions by 30% below 2005 by 2030.
  • The Vancouver Declaration on Clean Growth and Climate Change expressed this international engagement, and connected the need to mitigate climate change with implementing GHG mitigation policies domestically to achieve the 30% target.
  • This declaration then led to the formation of a Federal-Provincial-Territorial Working Group on Carbon Pricing Mechanisms, which produced a report concluding that economy-wide carbon pricing is the most efficient way to reduce emissions.
  • This report in turn supported creation of the Pan-Canadian Approach to Pricing Carbon Pollution, which set a national benchmark for carbon pricing aimed at “ensur[ing] that carbon pricing mechanisms of gradually increasing stringency apply in all Canadian jurisdictions by 2018, either in the form of an explicit price-based system (i.e. a carbon tax) or a “cap-and-trade” system.”
  • In December 2016, eight provinces and the three territories adopted the Pan-Canadian Framework on Clean Growth and Climate Change, which explicitly included the benchmark.
    • British Columbia, Alberta, and Québec already had carbon pricing mechanisms.
    • Ontario intended to join the Québec/California cap-and-trade system.
    • Manitoba adopted it in February 2018.
    • Saskatchewan did not adopt it.
  • In March 2018, the Act was introduced in Parliament as part of the Budget Implementation Act, 2018, No. 1 It received Royal Assent three months later.

The Courts of Appeal for Ontario and Saskatchewan ruled the Act constitutional in 2019, grounding their conclusion on Parliament’s jurisdiction to legislate on matters of “national concern” under the “Peace, Order, and good Government” (“POGG”) clause of s. 91 of the Constitution Act, 1867. Why? Because Parliament had established that atmospheric accumulation of GHGs “poses an existential threat to human civilization and the global ecosystem” and the impact on Canada is “particularly acute.” The need for a collective approach to this threat presents “a matter of national concern, and the risk of non-participation by one or more provinces, permits Canada to adopt minimum national standards to reduce GHG emissions.” The charges imposed by the Act are also constitutional because they are “regulatory in nature and connected to the purposes of the Act. They are not taxes.” The Alberta court of appeal roundly refuted this constitutional analysis in its February 2020 decision. Each of these courts analyzed the “pith and substance” of the Act to determine how it fits within the Constitution’s definitions of federal power.

The Court of Appeal for Ontario concluded that:

“The purpose of the Act, as reflected in its Preamble and in Canada’s international commitments and domestic initiatives, discussed earlier, is to reduce GHG emissions on a nation-wide basis. It does so by establishing national minimum prices for GHG emissions, through both the fuel charge and the OBPS excess emissions charge. Its effect is to put a price on carbon pollution, thereby limiting access to a scarce resource: the atmosphere’s capacity to absorb GHGs. The pricing mechanisms also incentivize behavioural changes.”

“A harmonious reading of the Act, which itself confines its operation to the creation of a national minimum pricing scheme to address a national and international concern, permits it to operate concurrently with provincial laws applicable to the environment in general, and to the reduction of GHG emissions in particular.”

In sum: The Act establishes “minimum national standards to reduce greenhouse gas emissions” and uses “a minimum national standard of stringency for the pricing of GHG emissions.”

The Court of Appeal for Saskatchewan drew the same conclusion on the same constitutional grounds, but grounded the national act more specifically in Canada’s international treaty obligations.

“In very general terms, the Act is self-evidently aimed at GHG pricing. This is revealed by several considerations. The first is the broad context in which it was enacted. That context can be traced directly back to the Framework Convention ratified by Canada in 1992 and the Kyoto Protocol, the Copenhagen Accord and the Paris Agreement, which followed. All had the same central objective, i.e., the limitation of global GHG emissions. The Act is the product of Canada’s efforts to meet its commitments under the Paris Agreement.”

The Court of Appeal for Alberta did not find any constitutional basis for the federal act, noting how rarely Parliament’s peace, order and good government power has been used. (Only 6 uses of it, with 3 during the temperance period!). This February 2020 ruling recognized the urgency expressed in the international climate regime, and carefully analyzed the legal architecture and impact of the Paris Agreement. But it viewed the federal Act as a “constitutional Trojan horse.”

“Assigning this Act or a class of laws of this nature to Parliament would forever alter the constitutional balance that exists between the heads of power allotted to Parliament and the provincial Legislatures in the federal Canadian state. None of the cases in which the national concern doctrine has been successfully invoked contemplates a wholesale takeover of a collection of clear provincial jurisdictions and rights. But this Act does. There is no principled basis to judicially expand the heads of federal powers to concentrate such extensive law-making powers in Parliament. We take no issue with the federal government’s virtuous motives for the Act; we are assessing only its constitutionality under division of powers. … Buried within it are wide ranging discretionary powers the federal government has reserved unto itself. Their final shape, substance and outer limits have not yet been revealed. But that in no way diminishes the true substance of what this Act would effectively accomplish were its validity upheld. Almost every aspect of the provinces’ development and management of their natural resources, all provincial industries and every action of citizens in a province would be subject to federal regulation to reduce GHG emissions.”

Noting Alberta’s contribution to Canada’s GHG emissions (1/3 of Canada’s total, with tar sands emissions accounting for 1/4 of Alberta’s GHG ouput), the court of appeal opined in dicta that Parliament action – “this assault on provincial jurisdiction” – “could only be justified if Parliament validly claimed an environmental emergency that threatened life as we know it on planet earth and required an immediate and comprehensive response to dangerously high levels of greenhouse gas emissions.”

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