Ontario Government Loses Carbon Tax Battle


Doug Ford and the government of Ontario have been dealt another blow this week, as Ontario's top court has ruled that the federal government's carbon tax is both constitutional and a valid measure to adopt to combat climate change. 

The judge ruled that Parliament's passage of the Greenhouse Gas Pollution Pricing Act, which was implemented in April 2019, was an appropriate and legally sound response to what more organizations are officially referring to as a climate emergency.

"The Act is within Parliament's jurisdiction to legislate in relation to matters of ‘national concern’ under the 'Peace, Order, and good Government' clause of the Constitution Act," Chief Justice George Strathy wrote in the ruling. 

"Parliament has determined that atmospheric accumulation of greenhouse gases causes climate changes that pose an existential threat to human civilization and the global ecosystem. The impact on Canada, especially in coastal regions and in the north, is considered particularly acute." 

Ontario's PC government has vowed to appeal the decision. 

“Ontario is disappointed that the Court did not accept Ontario’s position that the federal carbon tax is an unconstitutional tax,” said Premier Doug Ford. “We know, as do the people of this province, that the federal government’s carbon tax is making life more expensive for Ontarians and is putting jobs and businesses at risk. We promised to use every tool at our disposal to challenge the carbon tax and we will continue to fight to keep this promise.”

Ford and his government launched the legal challenge some time ago, arguing that the tax was illegal because it trampled the rights of provinces and territories and allowed the federal government to dictate matters outside of its jurisdiction. 

The province of Saskatchewan also argued that the tax was unconstitutional before ultimately losing its court battle with the federal government this past spring.

The Ford government spent $30 million on the legal challenge—and the province intends to keep fighting.

The governments of Ontario and Saskatchewan say they plan to take their arguments to the Supreme Court of Canada. 

“Ontario will be appealing this decision to the Supreme Court of Canada. Ontario doesn’t need a carbon tax to address climate change," said Minister of the Environment, Conservation and Parks, Jeff Yurek, in a statement.

Yurek said the province, which cancelled cap and trade shortly after being elected last year, has its own plan to curb emissions.  

Yurek argued that the province's plan, which includes taxing significant polluters, is committed to meeting Canada’s greenhouse gas emissions target of 30 per cent below 2005 levels by 2030.

The province argues that its solution is an alternative to the federal output-based pricing system and will "recognize the unique circumstances of Ontario’s economy while allowing for economic growth." 

The federal carbon tax, which is intended to discourage reliance on fossil fuels, has increased the price of gasoline in Ontario by 4.4 cents per litre. This will rise to 6.6 cents in 2020, 8.8 cents in 2021, and 11.1 cents per litre in April 2022.

The province also says that the tax will increase heating costs exponentially, costing hospitals an additional $27.2 million in 2022. It also argues that small businesses could end up paying an additional $1,000 a year on heating costs in 2022.

Data suggests that households could be paying an additional $648 a year by 2022.

That said, the federal government does remit a Climate Action Incentive tax rebate to families to offset the increased costs.  

Now, Ontarians can expect a rebate of $154 for individuals, $231 for couples and even more for couples with dependent children. According to the federal government, this rebate is a form of redistributing the tax from business to the citizens.

Climate Change Minister Catherine McKenna praised the court's decision.

"Today's judgement confirming the constitutionality of the federal government's approach to pricing carbon pollution is good news for every Canadian who believes that climate action is urgent and that smart solutions can make the planet safer and our economy stronger, too," McKenna said in a video statement posted to her Facebook page.

"It is also good news for Canada and the ability of the federal government to tackle carbon pollution which knows no borders, is a clear issue of national concern, and which presents an urgent threat to Canadians and the world. It is unfortunate that Conservative politicians including Doug Ford and Jason Kenney, supported by Andrew Scheer, continue to waste taxpayers' dollars fighting climate action in court rather than taking real action to fight climate change." 

In a joint station issued by Ford and Yurek, the government pledged to continue its fight against the federal government.

"Ontario continues to stand united with our coalition of provinces, including Saskatchewan, Alberta, Manitoba and New Brunswick, pledged to fight the federal government’s Greenhouse Gas Pollution Pricing Act. Ontario has intervened in Saskatchewan’s appeal of its reference to the Supreme Court of Canada and in Manitoba’s application for judicial review in the Federal Court. We will also be seeking to intervene in Alberta’s challenge." 

While it remains to be seen how the Supreme Court will deal with the appeals, it does look provincial courts have been upholding the federal carbon tax as a constitutional solution to climate change.

Whether residents are up for another costly legal challenge is also an important question these governments should be asking themselves—especially in the runup to a hyper-competitive federal election. 

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