(June 23, 2021) On March 25, 2021, the Supreme Court of Canada, in a 6–3 decision, issued an opinion holding the 2018 Greenhouse Gas Pollution Pricing Act constitutional under Parliament’s residual power to make laws for “peace, order, and good government.” (References re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11 (Decision); Greenhouse Gas Pollution Pricing Act, S.C. 2018, c. 12, s. 186; Constitution Act, 1867, s 91.)
Greenhouse Gas Pollution Pricing Act
The Greenhouse Gas Pollution Pricing Act (Greenhouse Act) imposes a regulatory charge “with the characteristics of a tax” through a fuel charge imposed at the point of purchase and a separate carbon pricing system for large emitters. (Decision para. 213.) The act applies only to certain provinces and territories listed in schedule 1 of the act: Ontario, Manitoba, Saskatchewan, Alberta, Yukon, and Nunavut.
The provinces of Alberta, Ontario, and Saskatchewan challenged the constitutionality of the Greenhouse Act in the lower courts. The courts of appeals were split 2–1 in favor of the act’s constitutionality. The three cases’ decisions hinged on the meaning of the “peace, order, and good government” clause in section 91 of the Constitution Act, 1867.
The “Peace, Order, and Good Government” Power
Section 91 of the Constitution Act, 1867, states that “[i]t shall be lawful for the Queen, by and with the Advice and Consent of the Senate and House of Commons, 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[.]” Whether a matter falls under the exclusive jurisdiction of the provincial legislatures depends on if the matter is a “national concern.”
In the majority opinion, Chief Justice Wagner detailed the national concerns arising out of global climate change and stated that addressing it required “collective action.” Given this collective nature, the problem of global climate change qualifies as a national concern merely through the “pith and substance” of the problem and the matter that the statute addresses. Moreover, a province deciding to opt out of the cooperative scheme would create “grave consequences for extraprovincial interests” because carbon emissions that could be reduced in participating provinces would be offset by increased emissions in the nonparticipating provinces. Holding that the Greenhouse Act fell within the “peace, order, and good government” power of Parliament to enact national legislation, the Supreme Court held that the carbon pricing scheme was constitutional. Three members of the Supreme Court—Justices Côté, Brown, and Rowe— submitted dissenting opinions.