Federal carbon tax deemed constitutional in Sask appeal-court split decision

The Saskatchewan Court of Appeal has sided with the federal government in its battle with the province over the constitutionality of Ottawa's carbon levy.

In the appeal court's majority ruling, Chief Justice Robert Richards writes, “The Greenhouse Gas Pollution Pricing Act is not unconstitutional either in whole or in part.”

Environment minister Catherine McKenna described the decision as "a win for all Canadians and for all future generations."

"This decision confirms that putting a price on carbon pollution...is not only constitutional, it is an effective and essential part of any serious response to the global challenge of climate change," said McKenna.

But Saskatchewan premier Scott Moe was buoyed by the 3-2 split decision, in which minority Justices Neal Caldwell and Ralph Ottenbreit alternatively argue the act "is wholly unconstitutional", and tweeted that he would see the feds at the Supreme Court of Canada.

On April 1st of this year, the federally mandated carbon tax took effect in Saskatchewan, Manitoba, Ontario and New Brunswick – provinces that had declined to implement their own regimes.

Saskatchewan was the first jurisdiction to challenge what it viewed as federal overreach into provincial affairs and similar challenges launched by Ontario and Manitoba are still before their respective appeal courts.

A recent Parliament Budget Office report—“Fiscal and Distributional Analysis of the Federal Carbon Pricing System”— indicated households in these provinces would pay the bulk of the carbon tax as industry has been largely exempt from the levy.

The PBO calculates source revenue related to the tax will be 90 per cent fuel-based reaping $2.63 billion this year; $6.21 billion by 2021.

“Households will largely bear the cost of the pricing system through their consumption of energy used for residential and transport purposes, and carbon charges embodied in non-energy products,” according to the PBO's analysis.