Canada supreme court upholds Trudeau’s carbon tax

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Canada’s supreme court has ruled that the federal government can impose a carbon price across the country against the wishes of some provinces, finding that “global warming causes harm beyond provincial boundaries and that it is a matter of national concern”.

The ruling will be seen as vindication for Justin Trudeau’s governing Liberal party, which made climate a centrepiece of its re-election bid in 2019 and in December committed the country — the biggest exporter of oil to the US — to achieving net-zero greenhouse gas emissions by 2050.

The six-to-three majority decision dismisses a challenge from the oil-rich provinces of Alberta and Saskatchewan, which were joined by Conservative run Ontario in arguing that the federal government’s 2018 carbon tax law infringed on their jurisdiction.

The court said there was “broad consensus among expert international bodies that carbon pricing is a critical measure for the reduction of [greenhouse gas] emissions”.

“This matter is critical to our response to an existential threat to human life in Canada and around the world,” it said.

Jonathan Wilkinson, Canada’s minister of environment and climate change, said the ruling “reaffirmed that climate change impacts Canadians no matter where they live . . . and that the federal government can continue to ensure pollution isn’t free”.

Justifying the federal government’s right to set national carbon prices, the court said that climate impacts would be felt disproportionately by Canada’s vulnerable communities.

“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,” the court said.

“The impact on those interests justify the limited constitutional impact on provincial jurisdiction.”

The Trudeau government, which came to power in 2015, enacted carbon-pricing legislation in 2018 and last year said that the levy would increase from C$30 ($24) a tonne to C$170/tonne in 2030, one of the world’s most aggressive carbon-pricing regimes.

In December, the government outlined a plan to deliver economy wide net-zero emissions by 2050 and said Canada would “exceed” its Paris climate agreement targets to reduce greenhouse gas emissions 30 per cent below 2005 levels by 2030.

Canada’s natural resources minister, Seamus O’Regan, tweeted after the ruling that carbon pricing was “a market-based small c-conservative tool that harnesses the market’s ability to innovate. It’s stable. Predictable. And 100 per cent constitutional. So let’s move on.”

Although the ruling affirmed the federal government’s authority over carbon prices, provinces can still set their own carbon prices if they exceed those set by Ottawa. By allowing that leeway, the ruling managed to “thread a nice needle”, said Andrew Leach, an energy and environmental economist and professor at the University of Alberta.

“But the battle to stop this particular piece of legislation is over,” Leach added, saying it would put Canada firmly “in the vanguard” of the international fight against climate change.

The Trudeau government has faced opposition to its climate plans, especially in the centre-right governed western provinces of Alberta and Saskatchewan where fossil fuel production and exports are economic mainstays.

Alberta has its own carbon-pricing scheme, but it applies to large industrial emitters, not economy wide.

Politicians in Alberta reacted angrily earlier this year when US president Joe Biden finally cancelled the proposed Keystone XL pipeline between Canada’s oil sands developments and the American Gulf of Mexico coast, and accused Ottawa of not defending Canadian energy interests.

Earlier this month members of Canada’s federal opposition Conservative party voted against adding green policies to its agenda and language saying that “climate change is real”. The party has vowed to scrap national carbon pricing.

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