Carbon tax ‘squarely within provincial jurisdiction’: Read the dissenting opinion
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National Post
Publishing date:
Mar 25, 2021 • 46 minutes ago • 11 minute read • 23 Comments 
Supreme Court of Canada Justice Russell Brown looks on during his welcoming ceremony at the Supreme Court in Ottawa on October 6, 2015. Photo by Adrian Wyld /THE CANADIAN PRESS Article content
In split 6-3 ruling the Supreme Court found the federal carbon tax constitutional. Here is Justice Russell Brown’s reasons for dissenting.
The Greenhouse Gas Pollution Pricing Act (“Act ”) cannot be supported by any source of federal authority, and it is therefore wholly ultra vires Parliament. The Act’s subject matter falls squarely within provincial jurisdiction. The fact that the Act ’s structure and operation is premised on provincial legislatures having authority to enact the same scheme is fatal to the constitutionality of the Act under Parliament’s residual authority to legislate with respect to matters of national concern for the peace, order, and good government of Canada under the Constitution Act, 1867 .
There is agreement with Rowe J.’s reasons, and therefore Rowe J.’s review of the jurisprudence on the residual POGG power is adopted. To determine whether an enactment falls within the legislative authority of its enacting body, a reviewing court must apply two steps: first, it must characterize the enactment to determine its pith and substance or dominant subject matter and, secondly, it must classify the identified subject matter, with reference to the classes of subjects or heads of power enumerated in ss. 91 and 92 of the Constitution Act, 1867 . Where an enumerated head of power is relied upon, the pith and substance of the impugned law is identified at the characterization step, and that pith and substance is then classified under a head of power or class of subjects. Where Parliament relies upon the national concern branch of POGG as the source of its authority to legislate, the analytical process differs. If it is decided that the pith and substance of the impugned law does not fall under an enumerated head of power, the reviewing court must then consider whether the matter said to be of national concern satisfies the requirements of singleness, distinctiveness and indivisibility as stated in Crown Zellerbach. If so, the matter is placed under exclusive and permanent federal jurisdiction.
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The dominant subject matter of an enactment is determined by considering its purpose and effects. The purpose of characterization is to facilitate classification so as to determine whether the Constitution grants the enacting body legislative authority over the subject matter. The legislation’s dominant subject matter must therefore be characterized precisely enough for it to be associated with a specific class of subjects described in the Constitution’s heads of power. If an enactment’s subject matter could be classified under different heads of power listed under both ss. 91 and 92 of the Constitution Act, 1867 , then the subject matter should be identified with more precision until it is clear which single level of authority (as between federal and provincial) may legislate in respect thereof.
As a sufficiently precise description may well refer to why and how the law operates, it can be appropriate to include reference to the legislative means in the pith and substance analysis. However, it is not appropriate to do so where describing legislation only in terms of its means would not accurately capture its dominant subject matter or where the description of the means is something that only federal legislative authority can undertake, such as minimum national standards. The determinative consideration in identifying an appropriate level of abstraction should be facilitating the subject matter’s classification among the classes of subjects described in the Constitution’s heads of power so far as necessary to resolve the case.
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In this case, describing the Act ’s pith and substance as relating to the regulation of GHG emissions is too broad because it does not facilitate classification under a federal or provincial head of power. Greater specificity in describing how the legislation proposes to regulate GHG emissions is required so as to determine whether the Constitution grants Parliament legislative authority over the subject matter. However, the inclusion of minimum national standards in the pith and substance of the Act is equally unhelpful. It adds nothing to the pith and substance of a matter, which is directed not to the fact of a standard, but to the subject matter to which the standard is to be applied. The inclusion of minimum national standards in the pith and substance of a federal statute also effectively decides the jurisdictional dispute, given that only Parliament is capable of imposing minimum national standards ⸺ only federally enacted standards can apply nationwide, and, by operation of paramountcy, only federally enacted standards can be a minimum. Furthermore, reference to “integral” standards also has no relevance to identifying the Act ’s pith and substance because such a determination would require the Court to consider whether the standards set out in the Act are effective, which is not a valid consideration in the pith and substance analysis.
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In order to characterize the Act ’s pith and substance appropriately, its purpose and effects must be determined. In this case, the pith and substance of Parts 1 and 2 of the Act must be characterized separately. While the two parts share a purpose ⸺ the reduction of GHG emissions ⸺ they are otherwise not remotely similar to each other. They each have distinct operational features and the legislative means they employ are mutually distinct. The pith and substance of Part 1 is the reduction of GHG emissions by raising the cost of fuel. The pith and substance of Part 2 is the reduction of GHG emissions by pricing emissions in a manner that distinguishes among industries based on emissions intensity and trade exposure.
Once identified, the subject matter must be classified, with reference to the classes of subjects or heads of power described in ss. 91 and 92 of the Constitution Act, 1867 . Courts should look first to the enumerated powers, rather than immediately considering whether a statute’s dominant subject matter fits within the residual POGG authority.
In this case, provincial jurisdiction over property and civil rights authorized by s. 92(13) stands out as the most relevant source of legislative authority for the pith and substance of Parts 1 and 2 of the Act . Regulating trade and industrial activity, all within the boundaries of specified provinces, is indisputably captured by this broad head of power, which includes the regulation of business not coming within one of the enumerated federal heads of power, as well as the law of property and of contracts. In the alternative, the provincial residuum in s. 92(16) , granting authority over all matters of a local or private nature, could also authorize Parts 1 and 2. Part 2, as a deep foray into industrial policy, also falls within matters of provincial legislative authority granted by s. 92(10) over local works and undertakings. Also relevant to Part 2 is s. 92A , which gives the provinces the exclusive jurisdiction to make laws in relation to the exploration, development, conservation and management of non-renewable natural resources in the province.
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The identification of several applicable provincial heads of power should be the end of the matter, since all such heads of power are, by the terms of ss. 92 and 92A(1) , matters over which the provincial legislatures may exclusively make laws. By the terms of s. 91 , the POGG power applies only in relation to matters not coming within the classes of subjects assigned exclusively to the legislatures of the provinces. This exclusivity of provincial jurisdiction over matters falling under s. 92 is fundamental to the Canadian brand of federalism, and was a unique and deliberate choice by the makers of the Constitution who were concerned about federal overreach via the POGG power. The federal law‑making authority for the peace, order, and good government of Canada was intended to be subject to the division of powers. Within their areas of legislative authority, provinces are not only sovereign, but exclusively so. The Act’s entire scheme is premised on the provinces having jurisdiction to do precisely what Parliament has presumed to do in the Act ⸺ it operates only where provincial legislative authority is not exercised, or not exercised in a manner acceptable to the federal Cabinet. The Act’s backstop model is therefore constitutionally impossible: if the provinces have jurisdiction to do what the Act does, then the Act cannot be constitutional under the national concern branch of POGG. This demonstrates that Parliament has legislated in respect of a matter that falls within provincial legislative authority.
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Even so, given the majority’s acceptance that some aspect of the Act is truly and distinctly national in scope and lies outside provincial jurisdiction, the question of whether the matter said to be of national concern satisfies the requirements stated in Crown Zellerbach must be considered. The POGG jurisprudence offers little guidance on the question of whether the pith and substance of the impugned legislation can or should be coextensive with the matter of national concern, or whether the matter of national concern can or should be broader than the pith and substance of the legislation. It would be unprecedented and undesirable to accept that the matter of national concern must always be the same as the pith and substance of the statute under review, which can include legislative means, because this would effectively confine Parliament to that particular legislative means in responding to the matter of national concern.
It is not possible for a matter formerly under provincial jurisdiction to be transformed, when minimum national standards are invoked, into a matter of national concern. To accept that allocating national targets or minimum national standards can serve as a basis for recognizing that some aspect of an area of provincial jurisdiction is distinctly national in scope, and therefore lies outside provincial jurisdiction, would be to accept a model of supervisory federalism by which the provinces can exercise their jurisdiction only as long as they do so in a manner that the federal legislation authorizes. This would open up any area of provincial jurisdiction to unconstitutional federal intrusion once Parliament decides to legislate uniform treatment.
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In this case, a broad characterization of the national concern is unavoidable in order to encompass the pith and substance of both Part 1 and Part 2. The matter said to be of national concern can therefore be identified as the purpose of the Act as a whole: the reduction of GHG emissions. This matter does not meet the requirements of Crown Zellerbach for a valid national concern: it fails to meet the requirements of singleness and indivisibility. The fact that harms may cross borders is not enough to make out indivisibility. The matter is divisible because GHGs emissions can be connected to the source province. Responsibility for the reduction of GHG emissions among the provinces can therefore be readily identified for regulation at the source of the emissions. Nationwide GHG emissions are nothing more than the sum of provincial and territorial GHG emissions. The reduction of GHG emissions therefore lacks the degree of unity required to qualify as an indivisible matter of national concern. While a provincial failure to deal effectively with the control or regulation of GHG emissions may cause more emissions from that province to cross provincial boundaries, that is insufficient to meet the requirement of indivisibility in Crown Zellerbach.
Even if each of the pith and substance of Parts 1 and 2 as proposed matters of national concern are considered on their own, the pith and substance of each part is not distinct from matters falling under provincial jurisdiction under s. 92 ; they therefore do not meet the requirements of Crown Zellerbach. The reduction of GHG emissions (whether by raising the cost of fuel, or by pricing emissions in a manner that distinguishes among industries based on emissions intensity and trade exposure) does not have the requisite distinctiveness to be recognized as a matter of national concern because the Act encourages provinces to enact substantially the same scheme to serve the same regulatory purpose. The provinces clearly have jurisdiction to establish standards of GHG price stringency in the province.
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The double aspect doctrine has no application in this case. While this doctrine allows for the concurrent application of both federal and provincial legislation, it does not create concurrent jurisdiction. The Act purports to do exactly what the provinces can do, and for precisely the same reason. There are simply no distinctly federal aspects of the reduction of GHG emissions that cannot be divided among the enumerated heads of power. The imposition of minimum national standards cannot be described as the distinctly federal aspect of the matter.
Even were the reduction of GHG emissions a single and indivisible area of jurisdiction, its impact on provincial jurisdiction would be of a scale that is irreconcilable with the division of powers. Because the power to legislate to reduce GHG emissions effectively authorizes an array of regulations and extends to the regulation of any activity that requires carbon-based fuel, it has the potential to undo Canada’s division of powers. GHG emissions simply cannot be treated as a single regulatory matter. While the Act does not forbid any activity, the charges it imposes will affect the cost of fuel and dictate the viability of emissions-intensive trade-exposed activities. These charges thereby stand to have a profound effect on provincial jurisdiction and the division of powers. The division of powers analysis allows no recourse to balancing or proportionality considerations. The Constitution Act, 1867 , sets out spheres of exclusive jurisdiction so that within their sphere of jurisdiction, the provincial legislatures are sovereign, which sovereignty connotes provincial power to act or not act as they see fit, not as long as they do so in a manner that finds approval at the federal Cabinet table.
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The delegation granted by the Act to the Cabinet is breathtakingly broad. On this point, the guidance provided by Rowe J. is endorsed, both as to the imperative that the division of powers confines the exercise by the federal Cabinet of Parliament’s delegated authority, and as to the appropriate methodology for reviewing regulations for compliance with the division of powers.
The long-established principles set down in Crown Zellerbach should not be departed from. The doctrine of stare decisis establishes a high threshold for departing from precedents and that threshold is not met in this case. There is disagreement with the majority’s modernization of the national concern doctrine and with the three-step framework it adopts, which dilutes the national concern test set down in Crown Zellerbach. The framework adopted results in a new, distinctly hierarchical and supervisory model of Canadian federalism that subjects provincial legislative authority to Parliament’s overriding authority to establish national standards of how such authority may be exercised and replaces the constitutionally mandated division of powers with a judicially struck balance of power, which must account for other interests. No province, and not even Parliament itself, ever agreed to ⸺ or even contemplated ⸺ either of these features. This is a model of federalism that rejects the Constitution and re-writes the rules of Confederation. Its implications go far beyond the Act , opening the door to federal intrusion ⸺ by way of the imposition of national standards ⸺ into all areas of provincial jurisdiction, including intra-provincial trade and commerce, health, and the management of natural resources. It is bound to lead to serious tensions in the federation. And all for no good reason, since Parliament could have achieved its goals in constitutionally valid ways.
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