References re Greenhouse Gas Pollution Pricing Act

References re Greenhouse Gas Pollution Pricing Act
Collection
Supreme Court Judgments
Date
2021-03-25
Neutral citation
2021 SCC 11
Report
[2021] 1 SCR 175
Case number
38663, 38781, 39116
Judges
Wagner, Richard; Abella, Rosalie Silberman; Moldaver, Michael J.; Karakatsanis, Andromache; Côté, Suzanne; Brown, Russell; Rowe, Malcolm; Martin, Sheilah; Kasirer, Nicholas
On appeal from
Saskatchewan, Ontario, Alberta
Subjects
Constitutional law
Notes
Case in Brief SCC Case Information: 38663, 38781, 39116
Decision Content
SUPREME COURT OF CANADA
Citation: References re Greenhouse Gas Pollution Pricing Act , 2021 SCC 11, [2021] 1 S.C.R. 175
Appeals Heard: September 22, 23, 2020 Judgment Rendered: March 25, 2021 Dockets: 38663, 38781, 39116
Between:
Attorney General of Saskatchewan
Appellant
and
Attorney General of Canada
Respondent
- and -
Attorney General of Ontario, Attorney General of Quebec, Attorney General of New Brunswick, Attorney General of Manitoba, Attorney General of British Columbia, Attorney General of Alberta, Progress Alberta Communications Limited, Canadian Labour Congress, Saskatchewan Power Corporation, SaskEnergy Incorporated, Oceans North Conservation Society, Assembly of First Nations, Canadian Taxpayers Federation, Canada’s Ecofiscal Commission, Canadian Environmental Law Association, Environmental Defence Canada Inc., Sisters of Providence of St. Vincent de Paul, Amnesty International Canada, National Association of Women and the Law, Friends of the Earth, International Emissions Trading Association, David Suzuki Foundation, Athabasca Chipewyan First Nation, Smart Prosperity Institute, Canadian Public Health Association, Climate Justice Saskatoon, National Farmers Union, Saskatchewan Coalition for Sustainable Development, Saskatchewan Council for International Cooperation, Saskatchewan Environmental Society, SaskEV, Council of Canadians: Prairie and Northwest Territories Region, Council of Canadians: Regina Chapter, Council of Canadians: Saskatoon Chapter, New Brunswick Anti-Shale Gas Alliance, Youth of the Earth, Centre québécois du droit de l’environnement, Équiterre, Generation Squeeze, Public Health Association of British Columbia, Saskatchewan Public Health Association, Canadian Association of Physicians for the Environment, Canadian Coalition for the Rights of the Child, Youth Climate Lab, Assembly of Manitoba Chiefs, City of Richmond, City of Victoria, City of Nelson, District of Squamish, City of Rossland, City of Vancouver and Thunderchild First Nation
Interveners
And Between:
Attorney General of Ontario
Appellant
and
Attorney General of Canada
Respondent
- and -
Attorney General of Quebec, Attorney General of New Brunswick, Attorney General of Manitoba, Attorney General of British Columbia, Attorney General of Saskatchewan, Attorney General of Alberta, Progress Alberta Communications Limited, Anishinabek Nation, United Chiefs and Councils of Mnidoo Mnising, Canadian Labour Congress, Saskatchewan Power Corporation, SaskEnergy Incorporated, Oceans North Conservation Society, Assembly of First Nations, Canadian Taxpayers Federation, Canada’s Ecofiscal Commission, Canadian Environmental Law Association, Environmental Defence Canada Inc., Sisters of Providence of St. Vincent de Paul, Amnesty International Canada, National Association of Women and the Law, Friends of the Earth, International Emissions Trading Association, David Suzuki Foundation, Athabasca Chipewyan First Nation, Smart Prosperity Institute, Canadian Public Health Association, Climate Justice Saskatoon, National Farmers Union, Saskatchewan Coalition for Sustainable Development, Saskatchewan Council for International Cooperation, Saskatchewan Environmental Society, SaskEV, Council of Canadians: Prairie and Northwest Territories Region, Council of Canadians: Regina Chapter, Council of Canadians: Saskatoon Chapter, New Brunswick Anti-Shale Gas Alliance, Youth of the Earth, Centre québécois du droit de l’environnement, Équiterre, Generation Squeeze, Public Health Association of British Columbia, Saskatchewan Public Health Association, Canadian Association of Physicians for the Environment, Canadian Coalition for the Rights of the Child, Youth Climate Lab, Assembly of Manitoba Chiefs, City of Richmond, City of Victoria, City of Nelson, District of Squamish, City of Rossland, City of Vancouver and Thunderchild First Nation
Interveners
And Between:
Attorney General of British Columbia
Appellant
and
Attorney General of Alberta
Respondent
- and -
Attorney General of Canada, Attorney General of Ontario, Attorney General of Quebec, Attorney General of New Brunswick, Attorney General of Manitoba, Attorney General of Saskatchewan, Progress Alberta Communications Limited, Saskatchewan Power Corporation, SaskEnergy Incorporated, Oceans North Conservation Society, Assembly of First Nations, Canadian Taxpayers Federation, Canada’s Ecofiscal Commission, Canadian Environmental Law Association, Environmental Defence Canada Inc., Sisters of Providence of St. Vincent de Paul, Amnesty International Canada, International Emissions Trading Association, David Suzuki Foundation, Athabasca Chipewyan First Nation, Smart Prosperity Institute, Canadian Public Health Association, Climate Justice Saskatoon, National Farmers Union, Saskatchewan Coalition for Sustainable Development, Saskatchewan Council for International Cooperation, Saskatchewan Environmental Society, SaskEV, Council of Canadians: Prairie and Northwest Territories Region, Council of Canadians: Regina Chapter, Council of Canadians: Saskatoon Chapter, New Brunswick Anti-Shale Gas Alliance, Youth of the Earth, Generation Squeeze, Public Health Association of British Columbia, Saskatchewan Public Health Association, Canadian Association of Physicians for the Environment, Canadian Coalition for the Rights of the Child, Youth Climate Lab and Thunderchild First Nation
Interveners
Coram: Wagner C.J. and Abella, Moldaver, Karakatsanis, Côté, Brown, Rowe, Martin and Kasirer JJ.
Reasons for Judgment: (paras. 1 to 221)
Wagner C.J. (Abella, Moldaver, Karakatsanis, Martin and Kasirer JJ. concurring)
Reasons Dissenting in Part: (paras. 222 to 295)
Côté J.
Dissenting Reasons: (paras. 296 to 456)
Brown J.
Dissenting Reasons: (paras. 457 to 616)
Rowe J.
IN THE MATTER OF References to the Court of Appeal for Saskatchewan, the Court of Appeal for Ontario and the Court of Appeal of Alberta respecting the constitutionality of the Greenhouse Gas Pollution Pricing Act , S.C. 2018, c. 12, s. 186
Attorney General of Saskatchewan Appellant
v.
Attorney General of Canada Respondent
and
Attorney General of Ontario,
Attorney General of Quebec,
Attorney General of New Brunswick,
Attorney General of Manitoba,
Attorney General of British Columbia,
Attorney General of Alberta,
Progress Alberta Communications Limited,
Canadian Labour Congress,
Saskatchewan Power Corporation,
SaskEnergy Incorporated,
Oceans North Conservation Society,
Assembly of First Nations,
Canadian Taxpayers Federation,
Canada’s Ecofiscal Commission,
Canadian Environmental Law Association,
Environmental Defence Canada Inc.,
Sisters of Providence of St. Vincent de Paul,
Amnesty International Canada,
National Association of Women and the Law,
Friends of the Earth,
International Emissions Trading Association,
David Suzuki Foundation,
Athabasca Chipewyan First Nation,
Smart Prosperity Institute,
Canadian Public Health Association,
Climate Justice Saskatoon,
National Farmers Union,
Saskatchewan Coalition for Sustainable Development,
Saskatchewan Council for International Cooperation,
Saskatchewan Environmental Society,
SaskEV,
Council of Canadians: Prairie and Northwest Territories Region,
Council of Canadians: Regina Chapter,
Council of Canadians: Saskatoon Chapter,
New Brunswick Anti-Shale Gas Alliance,
Youth of the Earth,
Centre québécois du droit de l’environnement,
Équiterre,
Generation Squeeze,
Public Health Association of British Columbia,
Saskatchewan Public Health Association,
Canadian Association of Physicians for the Environment,
Canadian Coalition for the Rights of the Child,
Youth Climate Lab,
Assembly of Manitoba Chiefs,
City of Richmond,
City of Victoria,
City of Nelson,
District of Squamish,
City of Rossland,
City of Vancouver and
Thunderchild First Nation Interveners
- and -
Attorney General of Ontario Appellant
v.
Attorney General of Canada Respondent
and
Attorney General of Quebec,
Attorney General of New Brunswick,
Attorney General of Manitoba,
Attorney General of British Columbia,
Attorney General of Saskatchewan,
Attorney General of Alberta,
Progress Alberta Communications Limited,
Anishinabek Nation,
United Chiefs and Councils of Mnidoo Mnising,
Canadian Labour Congress,
Saskatchewan Power Corporation,
SaskEnergy Incorporated,
Oceans North Conservation Society,
Assembly of First Nations,
Canadian Taxpayers Federation,
Canada’s Ecofiscal Commission,
Canadian Environmental Law Association,
Environmental Defence Canada Inc.,
Sisters of Providence of St. Vincent de Paul,
Amnesty International Canada,
National Association of Women and the Law,
Friends of the Earth,
International Emissions Trading Association,
David Suzuki Foundation,
Athabasca Chipewyan First Nation,
Smart Prosperity Institute,
Canadian Public Health Association,
Climate Justice Saskatoon,
National Farmers Union,
Saskatchewan Coalition for Sustainable Development,
Saskatchewan Council for International Cooperation,
Saskatchewan Environmental Society,
SaskEV,
Council of Canadians: Prairie and Northwest Territories Region,
Council of Canadians: Regina Chapter,
Council of Canadians: Saskatoon Chapter,
New Brunswick Anti-Shale Gas Alliance,
Youth of the Earth,
Centre québécois du droit de l’environnement,
Équiterre,
Generation Squeeze,
Public Health Association of British Columbia,
Saskatchewan Public Health Association,
Canadian Association of Physicians for the Environment,
Canadian Coalition for the Rights of the Child,
Youth Climate Lab,
Assembly of Manitoba Chiefs,
City of Richmond,
City of Victoria,
City of Nelson,
District of Squamish,
City of Rossland,
City of Vancouver and
Thunderchild First Nation Interveners
- and -
Attorney General of British Columbia Appellant
v.
Attorney General of Alberta Respondent
and
Attorney General of Canada,
Attorney General of Ontario,
Attorney General of Quebec,
Attorney General of New Brunswick,
Attorney General of Manitoba,
Attorney General of Saskatchewan,
Progress Alberta Communications Limited,
Saskatchewan Power Corporation,
SaskEnergy Incorporated,
Oceans North Conservation Society,
Assembly of First Nations,
Canadian Taxpayers Federation,
Canada’s Ecofiscal Commission,
Canadian Environmental Law Association,
Environmental Defence Canada Inc.,
Sisters of Providence of St. Vincent de Paul,
Amnesty International Canada,
International Emissions Trading Association,
David Suzuki Foundation,
Athabasca Chipewyan First Nation,
Smart Prosperity Institute,
Canadian Public Health Association,
Climate Justice Saskatoon,
National Farmers Union,
Saskatchewan Coalition for Sustainable Development,
Saskatchewan Council for International Cooperation,
Saskatchewan Environmental Society,
SaskEV,
Council of Canadians: Prairie and Northwest Territories Region,
Council of Canadians: Regina Chapter,
Council of Canadians: Saskatoon Chapter,
New Brunswick Anti-Shale Gas Alliance,
Youth of the Earth,
Generation Squeeze,
Public Health Association of British Columbia,
Saskatchewan Public Health Association,
Canadian Association of Physicians for the Environment,
Canadian Coalition for the Rights of the Child,
Youth Climate Lab and
Thunderchild First Nation Interveners
Indexed as: References re Greenhouse Gas Pollution Pricing Act
2021 SCC 11
File Nos.: 38663, 38781, 39116.
2020: September 22, 23; 2021: March 25.
Present: Wagner C.J. and Abella, Moldaver, Karakatsanis, Côté, Brown, Rowe, Martin and Kasirer JJ.
on appeal from the court of appeal for saskatchewan
on appeal from the court of appeal for ontario
on appeal from the court of appeal of alberta
Constitutional law — Division of powers — Greenhouse gas emissions — Federal legislation setting minimum national standards of greenhouse gas pricing — Whether greenhouse gas pricing is matter of national concern falling within Parliament’s power to legislate in respect of peace, order and good government of Canada — Constitution Act, 1867, s. 91 “preamble” — Greenhouse Gas Pollution Pricing Act, S.C. 2018, c. 12, s. 186 .
In 2018, Parliament enacted the Greenhouse Gas Pollution Pricing Act (“GGPPA ”). The GGPPA comprises four parts and four schedules. Part 1 establishes a fuel charge that applies to producers, distributors and importers of various types of carbon-based fuel. Part 2 sets out a pricing mechanism for industrial greenhouse gas (“GHG”) emissions by large emissions-intensive industrial facilities. Part 3 authorizes the Governor in Council to make regulations providing for the application of provincial law concerning GHG emissions to federal works and undertakings, federal land and Indigenous land located in that province, as well as to internal waters located in or contiguous with the province. Part 4 requires the Minister of the Environment to prepare an annual report on the administration of the GGPPA and have it tabled in Parliament.
Saskatchewan, Ontario and Alberta challenged the constitutionality of the first two parts and the four schedules of the GGPPA by references to their respective courts of appeal, asking whether the GGPPA is unconstitutional in whole or in part. In split decisions, the courts of appeal for Saskatchewan and Ontario held that the GGPPA is constitutional, while the Court of Appeal of Alberta held that it is unconstitutional. The Attorney General of British Columbia, who had intervened in the Court of Appeal of Alberta, the Attorney General of Saskatchewan and the Attorney General of Ontario now appeal as of right to the Court.
Held (Côté J. dissenting in part and Brown and Rowe JJ. dissenting): The appeals by the Attorney General of Saskatchewan and the Attorney General of Ontario should be dismissed, and the appeal by the Attorney General of British Columbia should be allowed. The reference questions are answered in the negative.
Per Wagner C.J. and Abella, Moldaver, Karakatsanis, Martin and Kasirer JJ.: The GGPPA is constitutional. It sets minimum national standards of GHG price stringency to reduce GHG emissions. Parliament has jurisdiction to enact this law as a matter of national concern under the peace, order, and good government (“POGG”) clause of s. 91 of the Constitution Act, 1867 .
Federalism is a foundational principle of the Canadian Constitution. Its objectives are to reconcile diversity with unity, promote democratic participation by reserving meaningful powers to the local and regional level and foster cooperation between Parliament and the provincial legislatures for the common good. Sections 91 and 92 of the Constitution give expression to the principle of federalism and divide legislative powers between Parliament and the provincial legislatures. Under the division of powers, broad powers were conferred on the provinces to ensure diversity, while at the same time reserving to the federal government powers better exercised in relation to the country as a whole to provide for Canada’s unity. Federalism recognizes that within their spheres of jurisdiction, provinces have autonomy to develop their societies. Federal power cannot be used in a manner that effectively eviscerates provincial power.
Courts, as impartial arbiters, are charged with resolving jurisdictional disputes over the boundaries of federal and provincial powers on the basis of the principle of federalism. Although early Canadian constitutional decisions by the Judicial Committee of the Privy Council applied a rigid division of federal-provincial powers as watertight compartments, the Court has favoured a flexible view of federalism, best described as a modern cooperative federalism, that accommodates and encourages intergovernmental cooperative efforts. However, the Court has also always maintained that flexibility and cooperation, while important, cannot override or modify federalism and the constitutional division of powers.
The review of legislation on federalism grounds consists of the well-established two-stage analytical approach. At the first stage, a court must consider the purpose and effects of the challenged statute or provision with a view to characterizing the subject matter or “pith and substance”. A court must then classify the subject matter with reference to federal and provincial heads of power under the Constitution in order to determine whether it is intra vires Parliament and therefore valid.
At the first stage of the division of powers analysis, a court must consider the purpose and effects of the challenged statute or provision in order to identify its “pith and substance” or its main thrust or dominant or most important characteristic. In determining the purpose of the challenged statute or provision, a court can consider both intrinsic evidence, such as the legislation’s preamble or purpose clauses, and extrinsic evidence, such as Hansard or minutes of parliamentary committees. In considering the effects of the challenged legislation, a court can consider both the legal effects, those that flow directly from the provisions of the statute itself, and the practical effects, the side effects that flow from the application of the statute. Where a court is asked to adjudicate the constitutionality of legislation that has been in force for only a short time, any prediction of future practical effect is necessarily short-term, since the court is not equipped to predict accurately the future consequential impact of legislation. The characterization process is not technical or formalistic. A court can look at the background and circumstances of a statute’s enactment as well as at the words used in it.
Three points with respect to the identification of the pith and substance are important to clarify. First, the pith and substance of a challenged statute or provision must be described as precisely as possible. A vague or general description is unhelpful, as it can result in the law being superficially assigned to both federal and provincial heads of powers or may exaggerate the extent to which the law extends into the other level of government’s sphere of jurisdiction. However, precision should not be confused with narrowness. A court must focus on the law itself and what it is really about. The pith and substance of a challenged statute or provision should capture the law’s essential character in terms that are as precise as the law will allow. Second, it is permissible in some circumstances for a court to include the legislative choice of means in the definition of a statute’s pith and substance, as long as it does not lose sight of the fact that the goal of the analysis is to identify the true subject matter of the challenged statute or provision. In some cases, the choice of means may be so central to the legislative objective that the main thrust of a statute or provision, properly understood, is to achieve a result in a particular way, which would justify including the means in identifying the pith and substance. Third, the characterization and classification stages of the division of powers analysis are and must be kept distinct. The pith and substance of a statute or a provision must be identified without regard to the heads of legislative competence.
At the second stage of the division of power analysis, a court must classify the matter by reference to the heads of power set out in the Constitution . Matters and classes of subjects are distinct. Law-making powers are exercisable in relation to matters, which in turn generally come within broader classes of subjects. Section 91 does not provide in the context of the POGG power that Parliament can make laws in relation to classes of subjects; instead, it states that Parliament can make laws for the peace, order, and good government of Canada in relation to “Matters”. National concern is a well-established but rarely applied doctrine of Canadian constitutional law derived from the introductory clause of s. 91 of the Constitution , which empowers Parliament to make laws for the peace, order, and good government of Canada, in relation to all matters not coming within the classes of subjects assigned exclusively to the legislatures of the provinces. A matter that falls under the POGG power necessarily does not come within the classes of subjects enumerated in ss. 91 and 92.
Courts must approach a finding that the federal government has jurisdiction on the basis of the national concern doctrine with great caution. The effect of finding that a matter is one of national concern is permanent and confers exclusive jurisdiction over that matter on Parliament. However, the scope of the federal power is defined by the nature of the national concern itself and only aspects with a sufficient connection to the underlying inherent national concern will fall within the scope of the federal power.
A closely related question concerns the applicability of the double aspect doctrine to a matter of national concern. The double aspect doctrine recognizes that the same fact situations can be regulated from different perspectives, one of which may relate to a provincial power and the other to a federal power. The doctrine can apply in cases in which the federal government has jurisdiction on the basis of the national concern doctrine. Such an approach fosters coherence in the law, because the double aspect doctrine can apply to every enumerated federal and provincial head of power. It is also consistent with the modern approach to federalism, which favours flexibility and a degree of overlapping jurisdiction. However, the fact that the double aspect doctrine can apply does not mean that it will apply in a given case. It may apply if a fact situation can be regulated from different federal and provincial perspectives and each level of government has a compelling interest in enacting legal rules in relation to that situation. It should be applied cautiously so as to avoid eroding the importance attached to provincial autonomy.
The double aspect doctrine takes on particular significance where Canada asserts jurisdiction over a matter that involves a minimum national standard imposed by legislation that operates as a backstop. The recognition of a matter of national concern such as this will inevitably result in a double aspect situation. This is in fact the very premise of a federal scheme that imposes minimum national standards: Canada and the provinces are both free to legislate in relation to the same fact situation but the federal law is paramount. In such a case, even if the national concern test would otherwise be met, a cautious approach to the double aspect doctrine should act as an additional check. The court must be satisfied that Canada in fact has a compelling interest in enacting legal rules over the federal aspect of the activity at issue and that the multiplicity of aspects is real and not merely nominal.
Turning to the national concern test, there are two points worth noting about the framework as a whole. First, the recognition of a matter of national concern must be based on evidence. An onus rests on Canada throughout the national concern analysis to adduce evidence in support of its assertion of jurisdiction. Second, there is no requirement that a matter be historically new in order to be found to be one of national concern. Many new developments may be predominantly local and provincial in character and fall under provincial heads of power. The term “new”, as used in the jurisprudence, refers to matters that could satisfy the national concern test and includes both “new” matters that did not exist in 1867 and matters that are “new” in the sense that the understanding of those subject matters has, in some way, shifted so as to bring out their inherently national character. Thus, the critical element of the analysis is the requirement that matters of national concern be inherently national in character, not that they be historically new.
Finding that a matter is one of national concern involves a three-step analysis. First, as a threshold question, Canada must establish that the matter is of sufficient concern to the country as a whole to warrant consideration as a possible matter of national concern. Second, the matter must have a singleness, distinctiveness and indivisibility. Third, Canada must show that the proposed matter has a scale of impact on provincial jurisdiction that is reconcilable with the division of powers. The purpose of the national concern analysis is to identify matters of inherent national concern — matters which, by their nature, transcend the provinces.
The analysis begins by asking, as a threshold question, whether the matter is of sufficient concern to Canada as a whole to warrant consideration under the national concern doctrine. This invites a common-sense inquiry into the national importance of the proposed matter. This approach does not open the door to the recognition of federal jurisdiction simply on the basis that a legislative field is important; it operates to limit the application of the national concern doctrine and provides essential context for the analysis that follows.
The second step of the analysis requires that a matter have a singleness, distinctiveness and indivisibility that clearly distinguishes it from matters of provincial concern. Two principles underpin this requirement: first, to prevent federal overreach, jurisdiction should be found to exist only over a specific and identifiable matter that is qualitatively different from matters of provincial concern; and second, federal jurisdiction should be found to exist only where the evidence establishes provincial inability to deal with the matter.
Under the first principle of the singleness, distinctiveness and indivisibility analysis, the court should inquire into whether the matter is predominantly extraprovincial and international in its nature or its effects, into the content of any international agreements in relation to the matter, and into whether the matter involves a federal legislative role that is distinct from and not duplicative of that of the provinces. It is clearly not enough for a matter to be quantitatively different from matters of provincial concern — the mere growth or extent of a problem across Canada is insufficient to justify federal jurisdiction. International agreements may in some cases indicate that a matter is qualitatively different from matters of provincial concern. However, the existence of treaty obligations is not determinative of federal jurisdiction as there is no freestanding federal treaty implementation power and Parliament’s jurisdiction to implement treaties signed by the federal government depends on the ordinary division of powers. Furthermore, to be qualitatively different from matters of provincial concern, the matter must not be an aggregate of provincial matters. The federal legislative role must be distinct from and not duplicative of that of the provinces. Federal legislation will not be qualitatively distinct if it overshoots regulation of a national aspect of the field and instead duplicates provincial regulation or regulates issues that are primarily of local concern.
The second principle underpinning the singleness, distinctiveness, and indivisibility analysis is that federal jurisdiction should be found to exist only where the evidence establishes provincial inability to deal with the matter. Provincial inability functions as a strong constraint on federal power and should be seen as a necessary but not sufficient requirement for the purposes of the national concern doctrine. In order for provincial inability to be established both of these factors are required: (1) the legislation should be of a nature that the provinces jointly or severally would be constitutionally incapable of enacting; and (2) the failure to include one or more provinces or localities in a legislative scheme would jeopardize the successful operation of the scheme in other parts of the country. And there is a third factor that is required in the context of the national concern doctrine in order to establish provincial inability: a province’s failure to deal with the matter must have grave extraprovincial consequences. The requirement for grave extraprovincial consequences sets a high bar for a finding of provincial inability for the purposes of the national concern doctrine and can be satisfied by actual harm or by a serious risk of harm being sustained in the future. It may include serious harm to human life and health or to the environment, though it is not necessarily limited to such consequences. Mere inefficiency or additional financial costs stemming from divided or overlapping jurisdiction is clearly insufficient. Evaluating extraprovincial harm helps to determine whether a national law is not merely desirable, but essential, in the sense that the problem is beyond the power of the provinces to deal with it. This connects the provincial inability test to the overall purpose of the national concern test, which is to identify matters of inherent national concern that transcend the provinces.
At the third and final step of the national concern analysis, Canada must show that the proposed matter has a scale of impact on provincial jurisdiction that is reconcilable with the fundamental distribution of legislative power under the Constitution . The purpose of the scale of impact analysis is to protect against unjustified intrusions on provincial autonomy and prevent federal overreach. At this stage of the analysis, the intrusion upon provincial autonomy that would result from empowering Parliament to act is balanced against the extent of the impact on the interests that would be affected if Parliament were unable to constitutionally address the matter at a national level. Identifying a new matter of national concern will be justified only if the latter outweighs the former.
In this case, the true subject matter of the GGPPA is establishing minimum national standards of GHG price stringency to reduce GHG emissions. Both the short and long titles of the GGPPA confirm that its true subject matter is not just to mitigate climate change, but to do so through the pan-Canadian application of pricing mechanisms to a broad set of GHG emission sources. Likewise, it is clear from reading the preamble as a whole that the focus of the GGPPA is on national GHG pricing. In Parliament’s eyes, the relevant mischief is the effects of the failure of some provinces to implement GHG pricing systems or to implement sufficiently stringent pricing systems, and the consequential failure to reduce GHG emissions across Canada. To address this mischief, the GGPPA establishes minimum national standards of GHG pricing that apply across Canada, setting a GHG pricing floor across the country.
Similarly, it can be seen from the events leading up to the enactment of the GGPPA and from government policy papers that there was a focus on GHG pricing and establishing minimum national standards of GHG price stringency for GHG emissions — through a federally imposed national direct GHG pricing backstop — without displacing provincial and territorial jurisdiction over the choice and design of pricing instruments. This is supported by evidence of the legislative debates. Both elected representatives and senior public servants consistently described the purpose of the GGPPA in terms of imposing a Canada-wide GHG pricing system, not of regulating GHG emissions generally.
The legal effects of the GGPPA confirm that its focus is on national GHG pricing and confirm its essentially backstop nature. In jurisdictions where Parts 1 and 2 of the GGPPA apply, the primary legal effect is to create one GHG pricing scheme that prices GHG emissions in a manner that is consistent with what is done in the rest of the Canadian economy. Part 1 of the GGPPA directly prices the emissions of certain fuel producers, distributors and importers. Part 2 directly prices the GHG emissions of covered facilities to the extent that they exceed the applicable efficiency standards. The GGPPA does not require those to whom it applies to perform or refrain from performing specified GHG emitting activities. Nor does it tell industries how they are to operate in order to reduce their GHG emissions. Instead, all it does is to require persons to pay for engaging in specified activities that result in the emission of GHGs. The GGPPA leaves individual consumers and businesses free to choose how they will respond, or not, to the price signals sent by the marketplace. The legal effects of the GGPPA are thus centrally aimed at pricing GHG emissions nationally.
Moreover, because the GGPPA operates as a backstop, the legal effects of Parts 1 and 2 of the statute — a federally imposed GHG pricing scheme — apply only if the Governor in Council has listed a province or territory. The GGPPA provides that the Governor in Council may make listing decisions for Parts 1 and 2 of the statute only for the purpose of ensuring that the pricing of greenhouse gas emissions is applied broadly in Canada at levels that the Governor in Council considers appropriate, taking into account, as the primary factor, the stringency of provincial pricing mechanisms for greenhouse gas emissions. As a result, the GHG pricing mechanism described in Parts 1 and 2 of the GGPPA will not come into operation at all in a province or territory that already has a sufficiently stringent GHG pricing system. Not only does this confirm the backstop nature of the GGPPA — that of creating minimum national standards of GHG pricing — but this feature gives legal effect to the federal government’s commitment to give the provinces and territories the flexibility to design their own policies to meet emissions reductions targets, including carbon pricing, adapted to each province and territory’s specific circumstances, as well as to recognize carbon pricing policies already implemented or in development by provinces and territories.
Although evidence of practical effects is not helpful in this case given the dearth of such evidence, the evidence of practical effects to date is consistent with providing flexibility and support for provincially designed GHG pricing schemes. Practically speaking, the only thing not permitted by the GGPPA is for provinces and territories not to implement a GHG pricing mechanism or one that is not sufficiently stringent.
Applying the threshold question, Canada has adduced evidence that clearly shows that establishing minimum national standards of GHG price stringency to reduce GHG emissions is of sufficient concern to Canada as a whole that it warrants consideration in accordance with the national concern doctrine. The history of efforts to address climate change in Canada reflects the critical role of carbon pricing strategies in policies to reduce GHG emissions. There is also a broad consensus among expert international bodies that carbon pricing is a critical measure for the reduction of GHG emissions. This matter is critical to our response to an existential threat to human life in Canada and around the world. As a result, it passes the threshold test and warrants consideration as a possible matter of national concern.
Minimum national standards of GHG price stringency, which are implemented by means of the backstop architecture of the GGPPA , relate to a federal role in carbon pricing that is qualitatively different from matters of provincial concern. GHGs are a specific and precisely identifiable type of pollutant. The harmful effects of GHGs are known, and the fuel and excess emissions charges are based on the global warming potential of the gases. GHG emissions are also predominantly extraprovincial and international in their character and implications. This flows from their nature as a diffuse atmospheric pollutant and from their effect in causing global climate change. Moreover, the regulatory mechanism of GHG pricing is also specific and limited. GHG pricing operates in a particular way, seeking to change behaviour by internalizing the cost of climate change impacts, incorporating them into the price of fuel and the cost of industrial activity. It is a distinct form of regulation that does not amount to the regulation of GHG emissions generally or encompass regulatory mechanisms that do not involve pricing. The Governor in Council’s power to make a regulation that applies the GGPPA ’s pricing system to a province may be exercised only if it is first determined that the province’s pricing mechanisms are insufficiently stringent. If each province designed its own pricing system and all the provincial systems met the federal pricing standards, the GGPPA would achieve its purpose without operating to directly price GHG emissions anywhere in the country. The GGPPA is tightly focused on this distinctly federal role and does not descend into the detailed regulation of all aspects of GHG pricing.
Provincial inability is established in this case. First, the provinces, acting alone or together, are constitutionally incapable of establishing minimum national standards of GHG price stringency to reduce GHG emissions. While the provinces could choose to cooperatively establish a uniform carbon pricing scheme, doing so would not assure a sustained approach because the provinces and territories are constitutionally incapable of establishing a binding outcome-based minimum legal standard — a national GHG pricing floor — that applies in all provinces and territories at all times. Second, a failure to include one province in the scheme would jeopardize its success in the rest of Canada. The withdrawal of one province from the scheme would clearly threaten its success for two reasons: emissions reductions that are limited to a few provinces would fail to address climate change if they were offset by increased emissions in other Canadian jurisdictions; and any province’s failure to implement a sufficiently stringent GHG pricing mechanism could undermine the efficacy of GHG pricing everywhere in Canada because of the risk of carbon leakage. Third, a province’s failure to act or refusal to cooperate would have grave consequences for extraprovincial interests. It is well established that climate change is causing significant environmental, economic and human harm nationally and internationally, with especially high impacts in the Canadian Arctic, coastal regions and on Indigenous peoples.
Although the matter has a clear impact on provincial jurisdiction, its impact on the provinces’ freedom to legislate and on areas of life that would fall under provincial heads of power is qualified and limited. First, the matter is limited to GHG pricing of GHG emissions — a narrow and specific regulatory mechanism. If a province fails to meet the minimum national standards, the GGPPA imposes a backstop pricing system, but only to the extent necessary to remedy the deficiency in provincial regulation to address the extraprovincial and international harm that might arise from the province’s failure to act or to set sufficiently stringent standards. Second, the matter’s impact on areas of life that would generally fall under provincial heads of power is also limited. The discretion of the Governor in Council is necessary in order to ensure that some provinces do not subordinate or unduly burden the other provinces through their unilateral choice of standards. Although this restriction may interfere with a province’s preferred balance between economic and environmental considerations, it is necessary to consider the interests that would be harmed — owing to i