Saving Canada From Climate Change, at the Expense of Federalism

Climate change is the single greatest existential threat facing Canada. Greater than terrorism. Greater than cyber attacks on our digital infrastructure. Even greater than the COVID-19 pandemic.

Despite this, Canada has failed miserably in responding to this threat, despite knowing about it for decades. The reasons for this ultimately come down to politics, and narrow interests far too often confined by political cycles.

In 2019, Canada’s independent environment auditor, the Commissioner of the Environment and Sustainable Development, released a report which stated,

As Commissioner, I was proud to present the results of the first truly national picture of climate change action in this country. This historic audit brought together all of Canada’s provincial auditors general, along with the federal office, all auditing one topic at the same time. Never had this been done before in Canada. This work provided Canadians and elected officials from coast to coast to coast with a clear picture of the nation’s status on what is one of the most significant challenges of our time.

As important as this snapshot is, it’s the slow action on climate change that is disturbing. Many of my reports focused on climate change from various angles. We looked at federal support for sustainable municipal infrastructure, mitigating the impacts of severe weather, marine navigation in the Canadian Arctic, environmental monitoring of oil sands, oversight of federally regulated pipelines, funding clean energy technologies, fossil fuel subsidies, and progress on reducing greenhouse gases. For decades, successive federal governments have failed to reach their targets for reducing greenhouse gas emissions, and the government is not ready to adapt to a changing climate. This must change.
[emphasis added]

This statement was released the day after another report, by Environment Canada,

Canada is warming faster than the world as a whole — at more than twice the global rate — and the Canadian Arctic is warming even faster — at about three times the global rate…

Global temperature change is effectively irreversible on multi-century timescales. This is because the total amount of carbon dioxide emitted over time is the main determinant of global temperature change and because carbon dioxide has a long (century-scale) lifetime in the atmosphere.

In 2015, Canada committed at the Paris climate summit to stopping global temperature increases at 1.5 °C, with a 2030 goal of 30% of Greenhouse Gas (GHG) reductions below 2005 levels. At that time, all of Canadians seemed committed to a unified approach towards climate change.

First Ministers from across the country met in 2016, adopting the Vancouver Declaration on clean growth and climate change, and promising cooperation and collaboration between different levels of government. A statement released by the First Ministers at the time said,

We know that a fair transition to a sustainable, low-carbon economy is necessary for our collective prosperity, competitiveness, health, and security. Taking smart and effective action today is essential for future generations. These decisions will put Canada at the forefront of the global clean growth economy, and will create opportunities to diversify our economies, open up access to new markets, reduce emissions, and generate good paying, long-term jobs for Canadians…

Federal, provincial, and territorial governments will work together to make this vision a reality. We will work collaboratively with Indigenous peoples across the country to ensure a more sustainable and prosperous future for Canada. We also recognize that businesses, civil society, and individual Canadians should be mobilized to achieve these goals.
[emphasis added]

Based on this commitment, the federal government released The Pan-Canadian Framework on Clean Growth and Climate Change in 2016. It was immediately adopted by 8 of the 10 provinces, and all 3 territories. A ninth province, Manitoba, adopted it in February 2018. Only Alberta held out from signing on, an important portend of the turmoil to come.

The Framework was followed by a technical paper on federal carbon pricing backstop, and other documents on the pricing of carbon pollution. Then in 2018, it introduced the Greenhouse Gas Pollution Pricing Act (GGPPA).

The Commissioner of the Environment and Sustainable Development’s statements in 2019 were really informed by events in the previous year, where Ontario, Alberta and Manitoba withdrew from the Framework, in protest of the GGPPA.

Ontario elected a new party in a landslide in 2018, Saskatchewan elected a new leader of the governing party in the same year, and in 2019 Alberta ousted its climate-friendly government with one that was decidedly more guarded. The provincial promises of cooperation and collaboration of yesteryear were themselves in the rearview.

Alberta, Saskatchewan, and Ontario all launched constitutional challenges against the act, with the court in the first province finding it unconstitutional, and the courts in the second two finding it constitutional.

The Supreme Court of Canada recently released its decision in Reference re Greenhouse Gas Pollution Pricing Act, finding the GGPPA constitutional. In doing so, they may have saved the environment, and by extension Canada’s future. But we will be asking for many years, at what cost to federalism.

The GGPPA is admittedly a complex legislation, which still allows provinces to introduce measures that will achieve GHG targets. However, if a province fails to meet these targets, the GGPPA introduces a “backstop” that is controlled federally.

The case before the Court was perhaps best described in Justice Brown’s dissent, as follows,

[297] The issue before us is whether the Act is intra vires Parliamentary authority. Importantly, the issue is not whether Parliament can act to combat climate change. It clearly can ⸺ indeed, it can do much of what it seeks to do in the Act by, for example, exercising its taxation power under s. 91 of the Constitution Act, 1867. Nor is the issue whether Parliament can act to confront this or other existential threats to the country. Again, it clearly can, by relying upon its broad residual power to legislate in response to emergencies for the peace, order, and good government of Canada (“POGG”).

[298] In other words, the constitutionality of the scheme that Parliament has enacted in this case does not govern whether Parliament can seek to control GHG emissions so as to meet reduction targets. It can. The question before us goes simply to how Parliament has chosen to do so ⸺ and, in particular, whether it has chosen a means of doing so that is supported by its legislative authority as conferred by the Constitution of Canada. This question properly directs our attention to the structure and operation of the Act ⸺ features which receive little to no consideration in the majority’s reasons ⸺ and to the jurisdictional basis upon which the Attorney General of Canada seeks to uphold it. Again, it is worth stressing ⸺ since all parties before us say that much is at stake in the fight against climate change ⸺ that Parliament’s capacity to contribute meaningfully to that fight does not hang on the Court’s answer to the reference question.

The majority concluded that the minimum national standards set in the GGPPA was constitutional under the federal Peace, Order, and Good Government (POGG) powers of the constitution, as there was a matter of genuine national concern.

Justice Brown’s concern was that the majority’s approach abandoned any meaningful constraints on this national concern branch of POGG power. Because the GGPPA is only operative where the provinces have failed to enact their own effective carbon pricing measures, it presumes in its very structure that this is within the provincial power to regulate.

The Court has dealt these types of concerns in recent cases, finding a pan-Canadian securities regime in 2011 to be unconstitutional, and a reformulated securities regime in 2018 to be constitutional.

The distinction between the two largely seemed to hinge on the formal coordinated regime with joint representatives from different levels of governments, and model provincial legislation.

In the 2011 securities decision, the Court stated,

[61] While flexibility and cooperation are important to federalism, they cannot override or modify the separation of powers. The Secession Reference affirmed federalism as an underlying constitutional principle that demands respect for the constitutional division of powers and the maintenance of a constitutional balance between federal and provincial powers.

[62] In summary, notwithstanding the Court’s promotion of cooperative and flexible federalism, the constitutional boundaries that underlie the division of powers must be respected.  The “dominant tide” of flexible federalism, however strong its pull may be, cannot sweep designated powers out to sea, nor erode the constitutional balance inherent in the Canadian federal state…

[128] To summarize, we accept that the economic importance and pervasive character of the securities market may, in principle, support federal intervention that is qualitatively different from what the provinces can do. However, as important as the preservation of capital markets and the maintenance of Canada’s financial stability are, they do not justify a wholesale takeover of the regulation of the securities industry which is the ultimate consequence of the proposed federal legislation.  The need to prevent and respond to systemic risk may support federal legislation pertaining to the national problem raised by this phenomenon, but it does not alter the basic nature of securities regulation which, as shown, remains primarily focused on local concerns of protecting investors and ensuring the fairness of the markets through regulation of participants. Viewing the Act as a whole, as we must, these local concerns remain the main thrust of the legislation — its pith and substance.
[emphasis added]

The Court has also struggled in recent years with novel issues of federalism, such as with genetic discrimination and assisted reproduction. However, the majority here was insistent that there is no constitutional requirement that a matter be historically new to be one of national concern, and that newness was an unhelpful or neutral factor in the analysis.

What really made the GGPPA a matter of national concern was that, unlikely the pressing need for better securities regulation, the threat of climate change is real and immediate. It cannot suffer or wait another election cycle or another decade to deliberate what can or should be done.

This matter alone is of such significance that it brought it into the three-step analysis of national concern that transcends the provinces,

[185] More recently, even though all the provinces made a commitment in the Vancouver Declaration in March 2016 to work collectively to significantly reduce GHG emissions, Saskatchewan had withdrawn by the time of the Pan-Canadian Framework seven months later, and Ontario and Alberta also subsequently withdrew. Together, these three provinces accounted for 71 percent of Canada’s total GHG emissions in 2016… when provinces that are collectively responsible for more than two thirds of Canada’s total GHG emissions opt out of a cooperative scheme, this illustrates the stark limitations of a non-binding cooperative approach. The participating provinces can only reduce their own emissions — less than one third of Canada’s total — and are vulnerable to the consequences of the lion’s share of the emissions being generated by the non-participating provinces.

[186] What is more, any province’s refusal to implement a sufficiently stringent GHG pricing mechanism could undermine GHG pricing everywhere in Canada because of the risk of carbon leakage. Carbon leakage is a phenomenon by which businesses in sectors with high levels of carbon emissions relocate to jurisdictions with less stringent carbon pricing policies… Thus, provincial cooperation may not result in national emissions reductions, as businesses could simply relocate to non-cooperating provinces, leaving Canada’s net emissions unchanged and people across Canada vulnerable to the consequences of those emissions.

[191] …in the absence of a federal law binding the provinces, there is nothing whatsoever to protect individual provinces or the country as a whole from the consequences of one province’s decision, in exercising its authority, to take insufficient action to control GHGs, or to take no steps at all. In short, federal action is indispensable, and GHG pricing in particular is an integral aspect of any scheme to reduce GHG emissions.

Perhaps a bit more troubling is the emphasis found in Justice Côté’s dissent, which criticized the mechanisms of the GGPPA that allow for changes without going before Parliament. Unflatteringly referred to as Henry VII clauses, the Court has never found them to be unconstitutional.

However, their previous scrutiny by the Court emerged in cases like In Re George Edwin Gray, a WWI case that concerned conscription. Whether climate change rises to this level of importance may be more of a philosophical question rather than a factual, as the harm to a specific individual may not be as imminent. But it does illustrate how sparingly such approaches are used.

The majority outright refused to revisit the issue of Henry VIII clauses in the GGPPA, which involves delegating law-making power to the Governor in Council, as any regulation made must still be consistent with the enabling statute and the overriding purpose or object.

Justice Côté still found its implementation within the GGPPA to be conflicting,

[268] … Henry VIII clauses create a contradiction within an Act  by simultaneously requiring the executive to do something and authorizing the executive to defy that requirement. For instance, in the GGPPA, s. 168(2)  empowers the Governor in Council to regulate several specific subjects relating to the fuel charge, such as “providing for rebates, adjustments or credits in respect of the fuel charge system” (s. 168(2) (e)). However s. 168(4) provides that the Governor in Council can act contrary to any provision in Part 1. Therefore, Parliament simultaneously attempts to limit the Governor in Council to regulating specific subjects whilst also attempting to permit the Governor in Council to regulate anything they want.

[279] Like parliamentary sovereignty and the rule of law, the separation of powers is “a fundamental principle of the Canadian Constitution.” Although it is often said that Canada does not have a strict separation of powers, time and time again this Court has recognized the separation of powers as“an essential feature of our constitution”, “a cornerstone of our constitutional regime”, “[o]ne of the defining features of the Canadian Constitution” and a “backbone of our constitutional system.”
[citations omitted]

In Ontario Public School Boards’ Association v. Ontario (Attorney General) the Ontario Supreme Court reviewed 1997 amendments to the Education Act which transferred power of local school boards and their control of budgets and expenditures to the executive of the provincial government.

The amendments also gave the government the power to make regulations that override the Act itself, leading Justice Campbell to state,

[50] This breathtaking power, to amend by regulation the very statute which authorizes the regulation, is known to legal historians as a “King Henry VIII” clause because that monarch gave himself power to legislate by proclamation, a power associated since the 16th century with executive autocracy.

[51] This power is constitutionally suspect because it confers upon the government the unprotected authority to pull itself up by its own legal bootstraps and override arbitrarily, with no further advice from the Legislative Assembly, and no right to be heard by those who may be adversely affected by the change, the very legislative instrument from which the government derives its original authority.
[53] Until recent years this arbitrary government power, to override by regulation the very statute which authorized the regulation, was foreign to Ontario. The power was considered by many governments and successive generations of Crown law officers to be repugnant to our basic legal traditions of public accountability.

[60] It remains to be seen whether these arbitrary powers are actually necessary to achieve any valid legislative purpose. However legally offensive may be the existence of these powers, there has not yet been any attempt to use them. No regulations have been challenged which purport to rely upon these powers.

[61] Until there is an actual attempt to use these remarkable powers it is premature to adjudicate upon them in the absence of any concrete facts or actual violation of anyone’s rights.
[citations omitted]
The Court of Appeal in that case did not discuss this provision any further, and it does not appear as if the power was ever used, thereby avoiding any further scrutiny. The judicial distaste to this approach towards legislating in this manner, as echoed by Justice Côté, serves as an additional warning for those who think the disputes over climate change in Canada is over.

If the GGPPA is implemented by the federal government in a manner to regulate in an expansive manner, and one that takes the GGPPA outside either the pith and substance or the national concern, it may once again receive scrutiny by the courts.

Unfortunately, there might even be political appetite to do so.

When the GGPPA was passed in 2018, the government had a majority. None of the other parties supported it at the time. The government now has a minority, and while it is rightly celebrating the Court’s decision, it will also be under intense scrutiny on how GGPPA is implemented, and its effects on provinces that protest.

A private member’s bill, C-206, was introduced last year to redefine the exemptions under the GGPPA for “qualifying farming fuel,” to include marketable natural gas and propane.

These exemptions apply to farmers for charges for distributors, and formed part of the analysis for the Saskatchewan reference in the prohibitions and penalties part of the criminal purpose analysis. It also comprises the basis of the intended notice requirements in Ontario’s Federal Carbon Tax Transparency Act, which received its own successful constitutional challenge on the basis of legislation used for political means in a manner that violated the Charter.

The fight over how carbon emissions should be addressed in Canada will continue to play itself out in legislation, court decisions, and political platforms, in the years to come.

Yet the impacts of climate change, some of which can never be reversed in our lifetimes – or seven generations following – will be disproportionately experienced by Indigenous people, minorities, and the poor.

These are the very populations that will not be properly reflected in governments and the policy decisions they make. It is especially with these types of issues that the courts play a particularly important role in scrutinizing and validating national concern, because elected representatives will frequently be incapable of doing so.

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