Supreme Court Upholds Trojan Horse Carbon Tax

Just a few minutes ago, the Supreme Court of Canada ruled 6-3 in favour of the federal government regarding the constitutionality of the carbon tax.

The federal carbon tax requires provinces to introduce carbon taxes and, crucially, also allows the federal government to impose a special federal carbon tax on any province that refuses to do so.

Alberta, Saskatchewan, and Ontario took the case to the Supreme Court after a series of provincial court cases.

When Alberta first took the case, Premier Kenney made it clear just how crucial this court case was:

"I think this is perhaps a first in Canadian history when the federal Parliament has passed a bill attacking a major export product of only one province."

"This is a prejudicial, discriminatory attack on this province."

He's not wrong, the federal carbon tax is nothing short of a direct attack on western Canada.

But, I'm afraid I have to inform you that the problem actually goes far beyond just a carbon tax.

This ruling sets an incredibly dangerous constitutional precedent that will have dramatic long-term consequences for the balance of power between the federal government and the provinces in Canada.

The ownership of natural resources by the provinces, not the federal government, was enshrined in Canada's constitution after massively important negotiations over the Constitution Act, 1982 by both Saskatchewan and Alberta, led by then-Premier Peter Lougheed.

Premier Lougheed's leadership during that crucial time embodied perfectly the spirit of a young province trying to take control of its own destiny in the face of a federal government determined to treat Alberta and the west as a mere colony.

But ever since then, central government forces in Ottawa have not let up, and the fight has continued to escalate.

Today's Court decision was the culmination of a long effort by the federal government to use environmental issues as a back-door to regain control over Alberta's natural resources.

In effect, the federal government's argument was that because the environment is a federal matter, and because natural resources impact the environment, then the federal government should have control over natural resources too.

But if we accept that logic, the federal government could take control of practically any issue, by simply claiming that any matter of provincial jurisdiction affects a matter of federal jurisdiction.

That's why today's Court decision is nothing short of a disaster for Alberta and Saskatchewan, but also for every province, and for national unity overall.

If you'll bear with me, because this is crucial I have highlighted several key arguments that were heard in the Alberta Court of Appeal case, but that today were ignored by the Supreme Court of Canada, that explains this issue:

[5] … “[W]e must address a core element of our constitutional architecture – that is the division of powers between the federal Parliament and the provincial Legislatures. What is fundamental to Canada’s constitutional democracy and our continued existence is federalism. And what is essential to federalism is preservation of the carefully calibrated division of powers between the federal and provincial governments.”

[8] “In particular, Quebec had been understandably concerned to protect its jurisdiction especially over property and civil rights. It recognized its minority position and vulnerability to the consequences of majority rule. It was determined that control over property and civil rights, which typically goes to a central government, be vested in the provinces. The other provinces agreed. Thus, under Canada’s Constitution, power over property and civil rights – the Crown jewel of legislative powers – was vested in the provinces and not the central government.”

[9] “Exclusive provincial powers include not only those originally allocated under s 92 of the Constitution Act, 1867 but also those allocated to the provinces under s 92A of the Constitution Act, 1982 with respect to non-renewable natural resources in their province. Section 92A was added to the Constitution at repatriation in 1982 following extensive negotiations between the federal government, on the one hand, and Saskatchewan and Alberta, as the lead negotiators for the provinces, on the other.”

[10] “In addition, provincial powers include the proprietary powers flowing from another Crown jewel under our federal state, namely the provinces’ ownership of their natural resources under s 109 of the Constitution Act, 1867. These are distinct from the provinces’ legislative powers under the division of powers. Hence, the provinces’ proprietary rights as owners of their natural resources must also be taken into account in assessing the constitutionality of the Act. For Alberta, the combined effect of Parts 1 and 2 covers essentially the entire oil and gas industry from small wells up to and including large plants.”

[15] “Before this Court, Canada defended the constitutionality of the Act on one basis only, namely that it falls within the national concern doctrine of Parliament’s peace, order and good government (POGG) power. That power, found in the opening paragraph of s 91(1) of the Constitution Act, 1867, allows 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 by this Act assigned exclusively to the Legislatures of the Provinces”. Canada did not contend that the Act fell within either of the other two branches of POGG – the gap branch (which covers new subject matters) or the ‘emergency’ branch.”

[21] …“[T]he regulation of GHG emissions or any variation on this theme does not qualify for inclusion as a federal head of power under the national concern doctrine. Assigning this Act or a class of laws of this nature to Parliament would forever alter the constitutional balance that exists between the heads of power allotted to Parliament and the provincial Legislatures in the federal Canadian state. None of the cases in which the national concern doctrine has been successfully invoked contemplates a wholesale takeover of a collection of clear provincial jurisdictions and rights. But this Act does. There is no principled basis to judicially expand the heads of federal powers to concentrate such extensive law‑making powers in Parliament. We take no issue with the federal government’s virtuous motives for the Act; we are assessing only its constitutionality under division of powers.”

[22] “The Act is a constitutional Trojan horse. Buried within it are wide ranging discretionary powers the federal government has reserved unto itself. Their final shape, substance and outer limits have not yet been revealed. But that in no way diminishes the true substance of what this Act would effectively accomplish were its validity upheld. Almost every aspect of the provinces’ development and management of their natural resources, all provincial industries and every action of citizens in a province would be subject to federal regulation to reduce GHG emissions. It would substantially override ss 92A, 92(13) and 109 of the Constitution.”

[23] Thus, in answer to the question posed by the Lieutenant Governor in Council, we have concluded that Parts 1 and 2 of the Act are unconstitutional in their entirety.

As you can see, never before has the federal government attempted a wholesale takeover of clear provincial jurisdiction and rights in this way.

This decision is a constitutional Trojan horse that will forever alter the constitutional balance between the provinces and the federal government.

At Project Confederation, we don't think the full implications of this decision have been realized by basically anyone yet - including the Provinces.

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