Constitutional Chutzpah? Alberta Court of Appeal Finds Greenhouse Gas Pollution Pricing Act Unconstitutional

Publication March 2020

In the Reference re Greenhouse Gas Pollution Pricing Act1,  a majority of the Alberta Court of Appeal (ABCA) diverged from both the Saskatchewan and Ontario Courts of Appeal (SKCA and ONCA, respectively), finding the federal Greenhouse Gas Pollution Pricing Act (the Act) unconstitutional.2 Appeals from the SKCA and ONCA decisions are scheduled to be heard by the Supreme Court of Canada (SCC) on March 23 and 24, 2020, and are expected to address arguments raised by the ABCA.

The Act

Two of the Act’s four parts were at issue. Part 1 sets a fuel charge on products such as gasoline, natural gas, and propane. Part 2 limits greenhouse gas (GHG) emissions by large industrial emitters. The Act allows provinces and territories to establish their own plans to reduce GHG emissions, but also creates a federal backstop that applies if provinces and territories fail to enact a scheme that meets the federal standards.

Defending the division of powers

Writing for the majority, Fraser CJA emphasized that the Act’s unconstitutionality has nothing to do with climate change and everything to do with Canada’s constitutional framework and the division of powers between the federal and provincial governments. According to Fraser CJA, courts must be vigilant in safeguarding this division of powers, which ensures that provinces and their citizens control local matters that they are best equipped to handle, while serving as a check on federal control. Among the powers vested exclusively to the provinces is the power to regulate natural resources.

A matter of national concern or a “constitutional Trojan horse”?

As it did in the SKCA and ONCA decisions, Canada argued that the Act is constitutional because it falls within the national concern doctrine of Parliament’s peace, order and good government (POGG) power. To determine if the Act satisfies the national concern test, courts must first characterize the impugned law’s “matter,” and then classify it within a legislative head of power. Fraser CJA reasoned that if the “matter” intrudes on an exclusive provincial head of power it fails this test.

In characterizing the matter, the majority of the ABCA found that both the SKCA and ONCA erroneously narrowed the Act’s matter to make it constitutional. It found that the Act’s “matter” is no less than the “regulation of GHG emissions,” which it classified as an amalgamation of several exclusive provincial powers. Thus, the Court found the Act to be unconstitutional. If allowed to stand, the Act would represent a new federal head of power, which intrudes on “several heads of provincial powers assigned exclusively to the provinces.”

In the alternative, applying the test set out in R. v Crown Zellerbach Canada Ltd.,3  the majority of the ABCA found that the Act’s matter is not a national concern because it (1) lacks singleness, distinctiveness and indivisibility, (2) fails the “provincial inability” test and (3) is not reconcilable with the division of powers.

Concurring and dissenting opinions

Wakeling JA, concurring, found the Act to be unconstitutional after applying a five part test, asking: (1) Why did Parliament pass this law and what are its effects? (2) Does the law display a feature that reasonably justifies its classification as a class of laws assigned to the provinces? (3) If yes, can it also reasonably be classified as a class of laws assigned to Parliament? (4) If yes, which level of government is more justified in its jurisdiction? (5) If the answer to that question is unclear, the paramountcy doctrine applies and Parliament has jurisdiction.4 He characterized the Act broadly, finding that its classification was within provincial jurisdiction and outside of Parliament’s.5 Accordingly, he stopped his analysis at the third question, concluding that the law would represent a “massive and unprecedented peacetime-nonemergency invasion of […] the provinces’ jurisdiction.”6

Feehan JA, dissenting, characterized the “matter” as: “To effect behavioral change throughout Canada leading to increased energy efficiencies by the use of minimum national standards necessary and integral to the stringent pricing of [GHG] emissions.”7  He found, inter alia, that this matter: (1) either did not exist at the time of Confederation or is one that has since become of national concern, (2) demonstrates a singleness, indivisibility, and distinctiveness from provincial powers, and (3) cannot be realistically satisfied by co-operative provincial action.8

Implications of the decision

While the ABCA’s decision will not be under appeal on March 23 and 24, 2020, Fraser CJA’s reasons may influence the SCC’s deliberations. The ABCA’s decision will either be confirmed or overturned by default when the SCC deals with the appeals from the SKCA and ONCA. If the SCC follows the ABCA’s decision, it could confine the national concern doctrine to “matters” that do not fall within the provinces’ exclusive jurisdiction and thus limit the basis upon which the federal government can legislate on matters within the provinces’ jurisdiction. Regardless, the SCC’s decision will be an important development in Canada’s constitutional framework and division of powers.

The authors wish to thank articling student Preston Brasch for his help in preparing this legal update.


Footnotes

1   2020 ABCA 74.

3   R. v Crown Zellerbach Canada Ltd., [1988] 1 SCR 401, 1988 CanLII 63 (SCC).

4   At paras 356-396, 555-578, 619-629.

5   At para 394.

6   At para 348.

7   At para 943.

8   At para 1055.



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