Federal carbon tax violates Canada’s founding principles, Saskatchewan’s lawyers argue

The federal government’s carbon tax destabilizes the balance of power in Canada’s federation and gives Ottawa too much authority, lawyers for three provincial attorneys-general argued on the first day of hearings about the tax’s constitutionality.

The dispute over the centrepiece of Prime Minister Justin Trudeau’s climate plan is playing out in a Regina courtroom where the Saskatchewan government has asked a panel of five judges from the province’s Court of Appeal to examine the federal carbon-tax regime.

Federal legislation allows provinces to create their own climate plans, but imposes a carbon tax on those that fail to meet Ottawa’s standards. Arguments are expected to last two days as the two sides have been joined by 16 intervenors, including the provinces of Ontario, British Columbia and New Brunswick.

Saskatchewan’s lawyers argued Wednesday that the federal tax, and the legislation that created it, have upset Canada’s constitutional order by giving Ottawa power over provincial legislatures in the areas of industrial regulation and natural resources, which have historically been under provincial jurisdiction.

“It’s a case about the nature of our federation. It’s a case about what kind of country we live in,” said Mitch McAdam, a lawyer for Saskatchewan’s Attorney-General.

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The federal government’s decision to rewrite and impose rules on the provinces violates Canada’s founding principles, he said. “In our view, the federation, over time, will wither and cease to exist,” he added, unless the court strikes down the federal law. The case is expected to eventually end up at the Supreme Court of Canada.

The federal government’s lawyers are scheduled to respond on Thursday. Ottawa has argued in legal filings that it has the power to impose the carbon tax under Section 91 of the Constitution, which gives the federal government broad powers to make laws for “peace, order and good government.”

Provincial lawyers contend that the federal government has not made the case to use its powers under Section 91 to supplant existing provincial jurisdiction. William Gould, a lawyer for New Brunswick’s Attorney-General, warned that the federal law gives Ottawa too much power. “Giving Canada this degree of regulatory authority over [greenhouse-gas emissions] will result in the limitless, intrusive federal regulatory capability over provincial affairs,” he said.

Federal Environment and Climate Change Minister Catherine McKenna said in a statement from her office that the argument in Regina is largely a fight between the federal government and conservative leaders.

“Canadians know climate change is real and the cost of inaction is enormous," she said. "That is why our government is ensuring it is no longer free to pollute in Canada. A price on carbon pollution is a practical, affordable approach that is proven to work.”

Saskatchewan’s lawyer stressed that the court dispute is not about climate science or which approach to reducing greenhouse-gas emissions is most effective. “This is not a case about whether climate change is real or not. The government of Saskatchewan is not made up of a bunch of climate-change deniers,” Mr. McAdam said.

“The government recognizes that climate change is a serious issue that has to be addressed and that effective measures are required to deal with greenhouse-gas emissions. None of that is in dispute.”

The first day of arguments raised a number of serious questions about possible legislative overreach in federal climate rules, said Dwight Newman, a constitutional-law professor at the University of Saskatchewan. “Many had assumed there wasn’t a strong case on the Saskatchewan side, but there is clearly a case. And it’s a credible case,” he said.

This week’s hearing is only the first legal challenge facing the law ahead of a federal election later this year in which the carbon tax is expected to be a central issue. Ontario Premier Doug Ford’s government has filed a separate legal challenge, which will be heard in that province’s courts in mid-April.

Joshua Hunter, a lawyer for Ontario’s Attorney-General, provided a preview of his province’s case when he warned that the federal law would give Ottawa “almost unlimited” power.

Because the law doesn’t clearly define what is regulated, future parliaments could expand it to include regulating the size of homes, the distance people can drive and production quotas on businesses, he said. “The scope of the matter virtually affects anything, because of the almost limitless human activities that generate greenhouse gases,” Mr. Hunter said.