Reference re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11 (38663) (38781) (39116)

“In 2018, Parliament enacted the Greenhouse Gas Pollution Pricing Act  (“GGPPA ”). The GGPPA comprises four parts and four schedules. Part 1 establishes a fuel charge that applies to producers, distributors and importers of various types of carbon-based fuel. Part 2 sets out a pricing mechanism for industrial greenhouse gas (“GHG”) emissions by large emissions-intensive industrial facilities. Part 3 authorizes the Governor in Council to make regulations providing for the application of provincial law concerning GHG emissions to federal works and undertakings, federal land and Indigenous land located in that province, as well as to internal waters located in or contiguous with the province. Part 4 requires the Minister of the Environment to prepare an annual report on the administration of the GGPPA  and have it tabled in Parliament.
Saskatchewan, Ontario and Alberta challenged the constitutionality of the first two parts and the four schedules of the GGPPA  by references to their respective courts of appeal, asking whether the GGPPA  is unconstitutional in whole or in part. In split decisions, the courts of appeal for Saskatchewan and Ontario held that the GGPPA  is constitutional, while the Court of Appeal of Alberta held that it is unconstitutional. The Attorney General of British Columbia, who had intervened in the Court of Appeal of Alberta, the Attorney General of Saskatchewan and the Attorney General of Ontario now appeal as of right to the Court.”

The SCC (6:3, with one judge dissenting in part, and two judges writing separate dissenting reasons) held: the appeals by the Attorney General of Saskatchewan and the Attorney General of Ontario should be dismissed, and the appeal by the Attorney General of British Columbia should be allowed; the reference questions answered in the negative.

Chief Justice Wagner wrote as follows (at paras. 2-5, 162-166):

“The essential factual backdrop to these appeals is uncontested. Climate change is real. It is caused by greenhouse gas emissions resulting from human activities, and it poses a grave threat to humanity’s future. The only way to address the threat of climate change is to reduce greenhouse gas emissions. In the Paris Agreement, U.N. Doc. FCCC/CP/2015/10/Add.1, December 12, 2015, states around the world undertook to drastically reduce their greenhouse gas emissions in order to mitigate the effects of climate change. In Canada, Parliament enacted the GGPPA  as part of the country’s effort to implement its commitment.

However, none of these facts answer the question in these appeals. The issue here is whether Parliament had the constitutional authority to enact the GGPPA . To answer this question, the Court must identify the true subject matter of the GGPPA  and then classify that subject matter with reference to the division of powers set out in the Constitution Act, 1867  (“Constitution ”). In doing so, the Court must give effect to the principle of federalism, a foundational principle of the Canadian Constitution, which requires that an appropriate balance be maintained between the powers of the federal government and those of the provinces.

Below, I conclude that the GGPPA  sets minimum national standards of greenhouse gas price stringency to reduce greenhouse gas emissions, pollutants that cause serious extraprovincial harm. Parliament has jurisdiction to enact this law as a matter of national concern under the “Peace, Order, and good Government” clause of s. 91  of the Constitution . National concern is a well-established but rarely applied doctrine of Canadian constitutional law. The application of this doctrine is strictly limited in order to maintain the autonomy of the provinces and respect the diversity of Confederation, as is required by the principle of federalism. However, Parliament has the authority to act in appropriate cases, where there is a matter of genuine national concern and where the recognition of that matter is consistent with the division of powers. In this case, Parliament has acted within its jurisdiction.

I also conclude that the levies imposed by the GGPPA  are constitutionally valid regulatory charges. In the result, the GGPPA  is constitutional.

In summary, finding that a matter is one of national concern involves a three-step analysis.

First, Canada must establish that the matter is of sufficient concern to the country as a whole to warrant consideration as a possible matter of national concern. This question arises in every case, regardless of whether the matter can be characterized as historically new. If Canada discharges its burden at the step of this threshold inquiry, the analysis will proceed.

Second, the court must undertake the analysis explained in Crown Zellerbach through the language of “singleness, distinctiveness and indivisibility”. More important than this terminology, however, are the principles underpinning the inquiry. The first of these principles is that, to prevent federal overreach, jurisdiction based on the national concern doctrine should be found to exist only over a specific and identifiable matter that is qualitatively different from matters of provincial concern. The second principle to be considered at this stage of the inquiry is that federal jurisdiction should be found to exist only where the evidence establishes provincial inability to deal with the matter.

If these two principles are satisfied, the court will proceed to the third and final step and determine whether the scale of impact of the proposed matter of national concern is reconcilable with the division of powers.

The onus is on Canada throughout this analysis, and evidence is required. Where a proposed federal matter satisfies the requirements of all three steps of the framework, there is a principled basis to conclude that the matter is one that, by its nature, transcends the provinces and should be recognized as a matter of national concern.”

Justice Côté (dissenting in part) wrote as follows (at paras. 222-224):

“I have read the carefully crafted reasons of the Chief Justice, and I am in agreement with his formulation of the national concern branch analysis. However, I must respectfully part company with the Chief Justice’s ultimate conclusion that the Greenhouse Gas Pollution Pricing Act, S.C. 2018, c. 12, s. 186  (“GGPPA ” or “Act ”) is, in its current form, constitutional. In my view, the GGPPA , as presently drafted, cannot be said to accord with the matter of national concern properly formulated by the Chief Justice because the breadth of the discretion conferred by the Act  on the Governor in Council results in the absence of any meaningful limits on the power of the executive. Additionally, the provisions in the GGPPA  that permit the Governor in Council to amend and override the GGPPA  itself violate the Constitution Act, 1867 , and the fundamental constitutional principles of parliamentary sovereignty, rule of law, and the separation of powers.

This Court must decide the constitutionality of the GGPPA  based on the totality of the measures it authorizes, and not simply the steps currently taken under the Act . Thus, when I consider what the GGPPA  authorizes, irrespective of whether it has in fact been implemented, it is clear that the Act , as it is currently written, vests inordinate discretion in the executive with no meaningful checks on fundamental alterations of the current pricing schemes.

Although delegation of legislative power is not inherently problematic, as discretion provides flexibility and makes it possible to overcome the practical difficulties associated with amending provisions and enacting regulations at the legislative level, when an Act  endows a select few with the power to re-write, and thus reengineer, a law which affects virtually every aspect of individuals’ daily lives and provincial industrial, economic, and municipal activities, it goes too far.”

Justice Brown (dissenting) wrote as follows (at paras. 297-301, 426, 441, 451-456):

“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”).

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 Attorney General of Canada urges us to find that the Act  represents a constitutionally valid exercise by Parliament not of the powers it clearly has to address climate change, but of its residual authority to legislate with respect to matters of “national concern” under POGG. The significance of this cannot be overstated. This power ⸺ unlike Parliament’s authority to legislate in the face of national emergencies ⸺ permanently vests exclusive jurisdiction in Parliament over the matter said to be of national concern. Were this simply the straightforward matter, as the Attorney General of Canada says, of requiring polluters to “pay”, the consequences for the division of powers would be minor. But neither the Attorney General nor the majority fairly or completely describes what the Act  does. In particular, they downplay significantly what the Act  actually authorizes the Governor in Council ⸺ that is, the federal Cabinet ⸺ to do, and ignore the detailed regulatory intrusion into matters of provincial jurisdiction authorized by Part 2 of the Act . The result is a permanent and significant expansion of federal power at the expense of provincial legislative authority ⸺ unsanctioned by our Constitution , and indeed, as I will explain, expressly precluded by it.

The majority accedes to all these things, granting the Attorney General of Canada everything he seeks. But it does not stop there. The majority goes even further, in substance abandoning and re‑writing this Court’s jurisprudence on the national concern branch of POGG as stated in R. v. Crown Zellerbach Canada Ltd., [1988] 1 S.C.R. 401. Specifically, it dilutes the test stated in Crown Zellerbach, which required that a national concern exhibit qualities of “singleness, distinctiveness and indivisibility” (p. 432) from a matter falling within provincial legislative authority, by injecting into that test a body of unrelated trade and commerce jurisprudence. The result is a new three‑step test. Under this new test, the requirement of “singleness, distinctiveness and indivisibility” is informed by two “principles” that “animat[e]” the inquiry (Chief Justice’s reasons, at para. 146). The first of these “animating” principles is two‑pronged, and one of those prongs is informed by three “factors” (paras. 147, 151 and 157). The second “animating principle” is to be analyzed by reference to three other requirements (paras. 152‑56). To add to the confusion, the inevitable resulting expansion of federal authority under the national concern branch is fortified by the injection of judicial discretion into the scale of impact analysis, by which the scale of impact on provincial jurisdiction is balanced in light of other “interests”, which implicitly include the judiciary’s view of the importance of the matter (paras. 161 and 206). (It is apparently to be assumed that all important matters fall within federal jurisdiction.)

But the true danger in the majority’s reasons for judgment does not lie in the blending of trade and commerce jurisprudence with POGG jurisprudence, or in the confusing and confused test that it states. It is in the majority’s abandonment of any meaningful constraint on the national concern branch of the POGG power.

As Abella and Karakatsanis JJ. forcefully expressed in their concurring judgment in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, the doctrine of “[s]tare decisis places significant limits on this Court’s ability to overturn its precedents” (para. 255). While the Court was divided in Vavilov about whether those strictures were satisfied, the point is that horizontal stare decisis promotes certainty and predictability in the development of the law, contributes to the integrity of the judicial process and safeguards this Court’s institutional legitimacy (paras. 260‑61). If this applies to our statements of the law governing the standard by which judges review the decisions of administrative tribunals, it surely applies to our precedents on adjudicating the division of powers under the Constitution.

In its dilution of the national concern test, the majority has lost sight of what that test is supposed to achieve: the identification of matters that are distinctive (being different from those falling under any other enumerated power, and thus beyond the constitutional powers of the provinces to address), and indivisible (being a matter for which responsibility cannot be divided between Parliament and the provinces). While the majority’s “principle” of “qualitativ[e] differen[ce] from matters of provincial concern” (para. 146) echoes Crown Zellerbach’s requirement of distinctiveness, its three “factors” in effect adulterate that requirement to the point that there is no principle left. Almost any provincial head of power is open to federal intrusion simply by recasting the federal matter as one of “minimum national standards”.

But the real problem with my colleagues’ scale of impact analysis is their significant understatement of the intrusion into provincial jurisdiction effected by the Act . It will be recalled that the majority finds that the impact on provincial jurisdiction is limited, in part because the “impact on the provinces’ freedom to legislate is minimal” and “strictly limited”, since provinces “are free to design and legislate any GHG pricing system as long as it meets minimum national standards of price stringency” (paras. 199-200 (emphasis added)). As I have noted, this ignores the detailed industrial regulations authorized by Part 2 of the Act . But it also ignores that the federal benchmark is not static, and can be set to an increasingly stringent level so as to correspondingly narrow provincial jurisdiction in the field. It is only by ignoring such things that the majority is able to claim that the federal power that it recognizes here is “significantly less intrusive than [that recognized] in Crown Zellerbach” (para. 201).

More fundamentally, and even if federalism were a thing whose terms were not constitutionally enshrined but could instead be judicially balanced, the majority’s overall approach is not one of balance. Rather, the majority puts its thumb heavily on the federal side of the scale ⸺ by legitimating as a national concern the device of “minimum national standards” on matters of importance that otherwise fall within provincial jurisdiction, and by insisting that doing so still preserves provincial autonomy (as long as it is exercised in accordance with federal priorities). Parliament now knows how to ensure that the balance will always tip its way, whenever provinces choose to exercise their legislative authority in a way that impedes the federal agenda.

Even the Attorney General of Canada was not so bold as to ask for a weighted scale, much less a redefined framework that accounts for other interests that should have no bearing on the division of powers. And yet, the majority has given him just that.
The Act’s subject matter falls squarely within provincial jurisdiction. It cannot be supported by any source of federal legislative authority, and it is therefore ultra vires Parliament. This Court, a self‑proclaimed “guardian of the constitution” should condemn, not endorse, the Attorney General of Canada’s leveraging of the importance of climate change ⸺ and the relative popularity of Parliament’s chosen policy response ⸺ to fundamentally alter the division of powers analysis under ss. 91  and 92  of the Constitution Act, 1867  and, ultimately, the division of powers itself (Hunter v. Southam Inc., [1984] 2 S.C.R. 145, at p. 155).

The majority’s reasons for judgment are momentous, and their implications should be fully and soberly comprehended. This Court once maintained that the Constitution , underpinned as it is by the principle of federalism, “demands respect for the constitutional division of powers” (2011 Securities Reference, at para. 61; see also Reference re Secession of Quebec, at paras. 56 and 58). But in its unfortunate judgment, the majority discards that constitutionally faithful principle for a new, distinctly hierarchical and supervisory model of Canadian federalism, with two defining characteristics: (1) the subjection of provincial legislative authority to Parliament’s overriding authority to establish “national standards” of how such authority may be exercised; and (2) the replacement of the constitutionally mandated division of powers with a judicially struck balance of power, which balance 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 our 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. I dissent.”

Justice Rowe (dissenting) wrote as follows (at paras. 457-459, 616):

“The national concern doctrine is a residual power of last resort. I have come to this view through a close reading of R. v. Crown Zellerbach Canada Ltd., [1988] 1 S.C.R. 401, and the cases that preceded it. Faithful adherence to the doctrine leads inexorably to the conclusion that the national concern branch of the “Peace, Order, and good Government” (“POGG”) power cannot be the basis for the constitutionality of the Greenhouse Gas Pollution Pricing Act, S.C. 2018, c. 12, s. 186  (“Act ”).

My focus is mainly doctrinal. To attain the objectives sought by the federal structure, and for courts to be accountable to the public in how they exercise their power as umpires in federalism disputes, doctrinal coherence, clarity and predictability regarding the division of powers are essential (Canadian Western Bank v. Alberta, 2007 SCC 22, [2007] 2 S.C.R. 3, at para. 23; Quebec (Attorney General) v. 9147‑0732 Québec inc., 2020 SCC 32, at para. 3).

First, I discuss the principle of federalism and the division of powers: the starting point for a complete understanding of the national concern doctrine. Second, I discuss the residual and circumscribed nature of the POGG power, rooted in s. 91  of the Constitution Act, 1867 . While some commentators refer to the existence of three branches of POGG — gap, national concern, and emergency — in my view, the case law does not support a distinction between “gap” and “national concern”, nor is such a distinction useful. Rather, what commentators refer to as “gap” and “national concern” is better understood as one manifestation of the cumulatively exhaustive nature of the division of powers, and the residual nature of POGG. Third, I apply this understanding to the national concern test set out in Crown Zellerbach, and interpret the concepts of “singleness, distinctiveness and indivisibility”, “provincial inability” and “scale of impact on provincial jurisdiction” accordingly (p. 432). The national concern doctrine applies only to matters that are distinct from those falling under provincial jurisdiction and that cannot be distributed between the existing powers of both orders of government. In addition, their recognition under POGG cannot upset the federal balance. Fourth, I compare this approach to the approach urged on us by the Attorney General of Canada. Finally, I address an entirely distinct matter: the methodology for reviewing regulations for compliance with the division of powers and how it may apply to regulations made under the Act . In the result, for these reasons and those of Justice Brown, which I adopt, the legislation is ultra vires in whole.

A patient and careful examination of the doctrine reveals that POGG should be, and was always intended to be, a residual and circumscribed power of last resort that preserves the exhaustiveness of the division of powers. It is only available where no enumerated head of power, or combination of enumerated heads of power, is available. The approach of the Attorney General of Canada reflects a troubling misinterpretation of and departure from Crown Zellerbach and the doctrine that preceded it.”

Full Decision