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Brad Wall’s carbon-pricing fight is constitutional hot air

Nathalie Chalifour and Stewart Elgie are professors at the University of Ottawa, Faculty of Common Law. They have published articles on constitutional law and the environment, and Prof. Elgie has successfully litigated major cases on the issue in the Supreme Court of Canada.

Constitutional showdowns are regular fare in Canadian politics, and it looks like carbon pricing might be next up in the ring.

The federal government recently unveiled its carbon-price backstop. This default pricing system will come into effect only if a province isn't showing its own leadership – and most are. However, Saskatchewan Premier Brad Wall labelled the federal proposal a ransom note and threatened to take Ottawa to court over this alleged breach of provincial jurisdiction.

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Does he have a case? Short answer: not really.

While constitutional challenges to new federal environmental laws are common, successful challenges are rare. The last time the Supreme Court struck one down was almost 40 years ago, when it disallowed a section of the Fisheries Act. Since then, federal rules have been upheld on everything from toxic chemicals to marine pollution.

That doesn't mean that Ottawa has free rein on carbon pricing; it must stay within constitutional limits. And because the Constitution Act of 1867 doesn't address it explicitly, we need to see if carbon pricing fits by analogy with one of the topics in the list of federal law-making powers – the interpretation of which has evolved through decades of jurisprudence. In this case, the federal government has three possible legs to stand on.

The first leg is Parliament's broad taxation power. To be justified as a tax, a measure needs to have revenue generation as a driving force. That isn't the case here, since Ottawa has promised to return all revenues from its carbon price to the provinces. So this proposed law does not seem to be a tax in the constitutional sense. And that is probably wise, since the Constitution does not allow federal taxation of property owned by provinces, which could include provincially owned energy utilities such as SaskPower.

Instead, the federal government is likely to justify its carbon-pricing rules under either its criminal-law power or under POGG (peace, order and good government).

Ottawa regulates a variety of public-health, food-safety and environmental matters under the rubric of criminal law. A recent Federal Court of Appeal decision confirms the constitutionality of regulating greenhouse gases (GHGs) under this power. The court refuted a challenge to the federal renewable-fuel regulations, stating: "… It is uncontroverted that greenhouse gases are harmful to both health and the environment and as such, constitute an evil that justifies the exercise of the criminal-law power."

The court in that case also highlighted that the purpose of criminal law isn't simply to criminalize specific activities but to modify behaviour. The courts have often upheld laws aimed at changing behaviour without fully prohibiting the central activity. Consider tobacco: Parliament's legislation requiring warning labels for cigarette packages has been judged to be valid criminal law, even though the act of smoking itself is not criminalized.

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So the federal government has a strong leg to stand on with the criminal-law power.

The other option for validating a federal carbon price is through POGG. While this power has been circumscribed by the courts over the years to minimize federal intrusion into provincial jurisdiction, Ottawa is entitled to legislate under POGG on matters of "national concern."

One test that courts use to determine if an issue is of national concern is asking what could happen if one province failed to deal effectively with the issue within its borders. In other words, if Saskatchewan doesn't implement a price on carbon, does that undermine other provinces' efforts to reduce GHGs or Ottawa's chances of meeting its international targets? The answer is yes, which suggests it is a matter of national concern.

The fact that the law targets a specific group of pollutants covered by the Paris climate accord also strengthens Ottawa's case under POGG, as does the fact that it has been designed to minimize impact on provincial authority – by deferring to equivalent provincial laws and returning all revenues to them.

All of which suggests that the federal government is on pretty solid constitutional ground with this proposed law – although you never know until you see the actual legislation. The devil is often in the details.

In the end, Mr. Wall's threat to challenge the federal carbon-pricing backstop may be nothing more than political hot air. And while that might curry him some favour in the Saskatchewan court of public opinion, it's not likely to stand up in the Supreme Court of Canada.

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