Kenney concerned carbon tax ruling enables future intrusions on provincial jurisdiction
Alberta premier says his government will consult with Albertans, like-minded provinces on next steps
Alberta Premier Jason Kenney says he's concerned the Supreme Court's carbon tax ruling could set a precedent for future federal intrusions on provincial jurisdiction.
The country's highest court ruled Thursday morning that the federal government's carbon tax plan was constitutional after legal challenges from Alberta, Saskatchewan and Ontario.
- WATCH | Alberta Premier Jason Kenney comment on the Supreme Court decision in the above video.
"The best we can hope for is that the Supreme Court has invented a one-time-only carbon pricing exception to the constitutional order," Kenney told reporters Thursday morning.
He quoted at length from last year's Alberta Court of Appeal decision, as well as from the dissenting Supreme Court justices, who raised concerns this decision could open the door for more frequent federal challenges to provincial jurisdiction over natural resources.
"While we are disappointed with this decision, we have to respect that it is the majority decision of the Supreme Court of Canada," Kenney said.
"We will continue to fight to defend our exclusive provincial power to regulate our resource industries."
The ruling allows Prime Minister Justin Trudeau and the Liberal government to push ahead with their plan to ensure every province and territory has a price on carbon to lower greenhouse gas emissions.
Supreme Court Chief Justice Richard Wagner, writing for the majority, said the federal government is free to impose minimum pricing standards because the threat of climate change is so great that it demands a coordinated national approach.
Provinces 'incapable' of reducing national emissions
Wagner agreed with the federal government's argument that reducing greenhouse gas (GHG) emissions in order to combat climate change is a pressing matter of national concern and Ottawa could take the lead on a threat that crosses provincial boundaries.
He wrote that "the provinces, acting alone or together, are constitutionally incapable of establishing minimum national standards of GHG price stringency to reduce GHG emissions" and that "a failure to include one province in the scheme would jeopardize its success in the rest of Canada."
He noted that between 2005 and 2016, Canada's total emissions declined by only 3.8 per cent, despite significant reductions in most provinces, including 22 per cent in Ontario and 11 per cent in Quebec.
"But these decreases were largely offset by increases of 14 per cent in Alberta and 10.7 per cent in Saskatchewan," he wrote.
"As a result, Canada failed to honour its commitment under the Kyoto Protocol before withdrawing from that agreement in 2011, and it is not currently on track to honour its Copenhagen Accord commitment."
Wagner found that Ottawa can act under the Constitution's "peace, order and good government" clause, better known as POGG — which gives the federal government authority to enact laws to deal with issues that concern the entire country.
Kenney said his United Conservative Party government would immediately begin to consult with Albertans and the other like-minded provinces to determine what the next steps would be on the matter, with a focus on minimizing the economic cost to the province.
- WATCH | You can see Kenney's full news conference on Facebook below:
Attention turns to Alberta's other court challenge
Kenney's UCP government recently asked the federal government to commit $30 billion to advance the province's plans for carbon capture technologies. It is also challenging the federal government's environmental impact assessment legislation, Bill C-69, in Alberta's Court of Appeal.
The premier said he's treating the Supreme Court ruling as a single-issue decision, and said he hopes it won't influence Alberta's ongoing court challenges.
"I cannot imagine a situation where a court would say that the clear meaning of the constitution can be violated by the whim of a federal government, so we're going to fight that to the hill," Kenney said.
Kenney also took exception to Quebec's cap-and-trade program, which he said doesn't align with the pricing structure the federal government is mandating for other provinces.
"That is an inequity we cannot abide."
Opposition NDP Leader Rachel Notley said losing the carbon tax challenge is another sign Kenney can't deliver on his promises for job creation and economic growth.
"Instead of getting Albertans back to work he gave away our control over a made-in-Alberta climate response plan," she said.
Notley called today's court result predictable and added that the premier should have included Albertans in the province's plans to fight climate change years ago.
"The premier has had a long time to develop a program that meets the criteria," she said.
Last February, the Alberta Court of Appeal ruled that the carbon tax was unconstitutional in a 4-1 decision.
The court said the carbon tax was a "constitutional Trojan horse" and intruded on the province's jurisdiction over natural resources.
At the time, Kenney hailed the ruling as a "great victory for Alberta and a victory for Canadian federalism."
Alberta's government then demanded that the carbon tax no longer apply to the province in the wake of the court of appeal's decision. It also sent a letter to Ottawa saying Albertans should be reimbursed for taxes paid up to that point.
Federal Environment Minister Jonathan Wilkinson said at the time the ultimate decision rested with the Supreme Court and he was confident the tax would pass the test.
Carbon tax certainty an opportunity for energy industry
One lawyer said there's little threat of this Supreme Court ruling setting a precedent for invading provincial jurisdiction.
"This floodgates argument is overblown, people should not have concerns about it at all," Avnish Nanda, a lawyer at Nanda & Company, said, referencing the justifications set out in the ruling. He represented an Alberta intervener in support of the carbon tax legislation.
He added that there are few avenues left to pursue a challenge of the carbon tax. Provinces could make another reference question and focus it on a different aspect of the legislation, but Nanda said that would be "frivolous."
Now, he said it's up to the government to control its own plan or accept Ottawa's backstop.
Industry representatives said they will continue to participate in meeting global climate objectives.
"Each province has very different opportunities to mitigate climate change based on their unique circumstances, and we support continued flexibility to allow for provincial input," a statement from The Canadian Association of Petroleum Producers read.
Another hailed the certainty that this ruling provides.
"We're in the business of large-scale capture and storage, and there needs to be incentive to do it … this is one and it's good to know that it's finally been clarified that it's constitutional," Kevin Jabusch, the CEO of Enhance Energy, said.
"We need to attract private capital, and that capital can be attracted with certainty of regulation, certainty of pricing ... The certainty and the confidence it's going to be there over the long term is is really what's going to make this business grow and prosper."
Former TransCanada Corp. vice-president Dennis McConaghy wasn't surprised by the ruling, and said it will have few consequences on industrial emitters.
"The oilpatch was already paying through Alberta's large industrial emitter program," he said. "What this really would affect is residential [and[ commercial entities that didn't fall under those regulations."
Increases, rebates and costs at the pump
The Liberal government backstop was imposed on Alberta in January 2020, after the UCP government's proposal for emissions reduction measures was rejected by Ottawa.
In December, the federal government announced it would gradually hike the carbon tax up to $170 a tonne by 2030. The tax had already been anticipated to hit $50 a tonne in 2022.
The price at the pump will increase by 37.57 cents a litre by 2030 as a result of this new plan, and the cost of light fuel oil for home heating, natural gas and propane will rise as well.
Ottawa has outlined that 90 per cent of revenues from the carbon tax would be returned to consumers through rebates. A family of four in Alberta is eligible for a tax credit of $3,242.
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With files from John Paul Tasker