Ontario v. Canada re Greenhouse Gas Pollution Pricing Act

The Province of Ontario filed suit in the Ontario Court of Appeal seeking consideration of whether the Greenhouse Gas Pollution Pricing Act (GGPPA) is unconstitutional. The GGPPA became law in June 2018 and, as its name implies, allows the national government to set a price on greenhouse gas emissions which will be applied to provinces and territories that have not implemented a compliant program once the law goes into effect in January 2019. Ontario alleged that Parliament exceeded its constitutional authority in passing the GGPPA, arguing that the GGPPA is not authorized by the “national concern branch of the peace, order, and good government power” because the provinces are capable of regulating greenhouse gas emissions themselves and that “there is no need to expand the scope of federal jurisdiction to impose a one-size-fits-all federal carbon price.” Ontario further argues that even if the GGPPA falls within the scope of a national concern, the GGPPA represents an unconstitutional tax because it does not provide an adequate nexus between the charges it imposes and its regulatory purpose. Multiple parties have intervened in the case, including a number of advocacy groups and the governments of Saskatchewan, New Brunswick, and British Columbia. On June 28, 2019, the court upheld the constitutionality of the GGPPA. This decision marks the second decision among four provincial cases challenging the constitutionality of the GGPPA and the federal carbon pricing regime. The court determined that the GGPPA was constitutional under Parliament’s power over matters of national concern to the peace, order, and good government of Canada. The court characterized the GGPPA as validly “establishing minimum national standards to reduce greenhouse gas emissions.” This is broader than the Saskatchewan Court of Appeal’s characterization of the GGPPA as validly “establishing minimum national GHG emissions pricing standards to reduce GHG emissions.” The Court of Appeal for Ontario also upheld both the large emitters output-based performance system (Part 2 of the Act), and the fuel levies (Part 1 of the Act), which it construed as a regulatory charge rather than a tax.