Division of powers

SCC’s Reference re GGPPA Decision: an important milestone, but still a long road to travel

Posted on by Tal Schreier

by Cameron Somerville

On March 25th, 2021, the Supreme Court of Canada (SCC) upheld as constitutional the federal Greenhouse Gas Pollution Pricing Act (GGPPA), which sets a benchmark for pricing greenhouse gas (GHG) emissions across the country. In a 6-3 decision, the SCC established that the federal government has jurisdiction to apply the GGPPA under the Peace, Order, and Good Government powers (POGG) of the Constitution. Significantly, this sets a marker for the federal government’s ability to control greenhouse gas emissions.

“Climate change is real,” wrote Chief Justice Wagner.[1] “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.”[2]

This decision, while important, is unlikely to be the last word on carbon pricing in Canada.

Charting A New Course

The GGPPA received royal assent in 2018. The preamble to the legislation details the Act’s stated purpose: limiting the negative impacts of carbon emissions on Canadians’ well-being. Notably, it characterizes climate change as a “national problem.” The SCC has previously held legislation can use the preamble to “provide a base for assessing the gravity” of an issue of national concern.[3]

The GGPPA has two main parts. Part 1 is administered by the Canada Revenue Agency and applies a charge to 21 types of fuel and combustible waste. Part 2 establishes a GHG emissions pricing mechanism for large industrial emitters. Provinces can choose whether to implement a carbon pollution price or implement a cap-and-trade system, that allows corporations to trade emissions allowances under an overall cap, or limit, on those emissions.

The Act only operates as a “backstop,” forcing a system on provinces that don’t already have one in place. Additionally, the Act requires the agency return 90% of the revenue as rebates to provinces and individuals, so it is not a tax.

Diverging Paths: Provincial Courts of Appeal Decisions

Alberta, Ontario, & Saskatchewan challenged the federal government’s right to set price standards for carbon-based fuels and industry-based emissions. Ontario’s and Saskatchewan’s Courts of Appeal ruled the GGPPA falls within the National Concern Doctrine of the federal government’s POGG powers. Both judgements had dissents that indicated the law would be valid if its structure were changed, placing it under the federal tax power.

The Alberta Court of Appeal was the final provincial ruling and the only court to rule the GGPPA ultra vires Parliament. The majority found the Act infringed the provincial power to manage natural resources. The Court held that the National Concern Doctrine failed, as carbon pricing does not possess the requisite degree of unity to make it indivisible, in other words that the doctrine could not be used to assign a new head of power to the federal government where the subject matter falls within the province’s exclusive jurisdiction.

The Latest Stop: Supreme Court of Canada Decision

The SCC split 6-3 in finding the Act intra vires the federal government, with three separate dissenting judgements.

Chief Justice Wagner’s Majority Reasons

The majority judgement uses the Act’s long title to frame its main thrust as not just the mitigation of climate change but mitigation through pan-Canadian GHG pricing mechanisms.[4] They argue both Parts 1 and 2 of the GGPPA are “centrally aimed” at creating one GHG pricing scheme nationally.[5]

The majority finds the law is “tightly focused” and that all the provinces acting together would be “incapable” of enacting legislation with equivalent effects because they could not impose a binding outcome-based standard.[6] Therefore, the law meets the first set of requirements for the POGG national concern doctrine.

Lastly, the majority determines the impact of the legislation is reconcilable with the distribution of legislative powers. Since the law merely operates as a “backstop” within a “narrow and specific regulatory mechanism” it does not unduly infringe provincial powers.[7] Furthermore, considering the interests climate change would harm, they find the impact on provincial heads of power is relatively limited.[8]

They determine the GGPPA meets the criteria established in R v Crown-Zellerbach Canada Ltd. and is intra vires the Parliament of Canada.[9]

The Dissenting Judgements

Justice Côté takes issue primarily with the power granted under the GGPPA to the Governor in Council. He argues no clause should give the executive branch the power to nullify or amend Acts of Parliament. Furthermore, when an Act grants such power, the law cannot be within the national concern doctrine as the minimum standards have not been set by Parliament but by the executive branch.[10]

Justice Brown found the subject matter of the GGPPA was “squarely within” provincial jurisdiction and argued the Court should “condemn” the “leveraging” of climate change.[11] He finds provincial property and civil rights stand out as “the most relevant source of legislative authority” for the GGPPA.[12]

Finally, Justice Rowe took issue with the use of POGG in the majority’s reasons. He felt the doctrine of National Concern, and POGG more generally, should only be used as a last resort to “preserve the exhaustiveness of the division of powers.”[13]

The Road Ahead

This decision is not the end of the story for litigation of environmental legislation and climate change protection in Canada. As Justices Brown and Rowe indicate, the on-going balancing of powers in federalism will no doubt be fodder for the next leg of the journey.

This latest ruling is only directly about carbon pricing schemes. David Suzuki said the judgement gives the federal government the “power to make a difference,” but the extent of that power remains unclear.[14] The SCC in Friends of the Oldman River Society v Canada (Minister of Transport) ruled the “environment” cannot be assigned solely to one level of government, as the “environment” is too broad.[15] This case is likely not the last time a court will need to balance Canada’s climate crisis and federalism issues.

Nonetheless, potential future challenges should in no way undermine the magnitude of this decision. The finding that a matter is one of national concern is “permanent” and confers exclusive jurisdiction on the issue to Parliament.[16] The Supreme Court has moved the line for federal authority in environmental legislation. The question remains just how far it has moved.

Cameron Somerville is a 1L JD student at the Faculty of Law and is a member of this year’s Asper Centre Climate Justice student working group.

[1] Reference re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11 at para 2 [re GGPPA] [2] Ibid
[3] Reference re Anti-Inflation Act, [1976] 2 SCR 373 at para 66
[4] re GGPPA, supra note 1 at para 58
[5] Ibid at para 71
[6] Ibid at paras 179, 182
[7] Ibid at paras 199-200
[8] Ibid at para 206
[9] R v Crown-Zellerbach, [1998] 1 S.C.R. 401
[10] GGPPA SCC, supra note 2 at para 294
[11] Ibid at para 454
[12] Ibid at para 343
[13] Ibid at para 616
[14] Supreme Court decision puts Canada on right track for carbon pricing, David Suzuki Foundation at https://bit.ly/3fMSCXa
[15] Friends of the Oldman River Society v Canada (Minister of Transport), [1992] 1 S.C.R. 3 at para 93
[16] re GGPPA, supra note 1 at para 90

Examining the Constitutional Concerns of Urbanization and Megacities

Posted on by Tal Schreier

By Julia Nowicki

“Urban agglomeration is amongst the most burning policy challenges of the twenty-first century”, says Ran Hirschl, professor of political science and law and fellow of the Royal Society of Canada. “The continued silence of constitutional thought and constitutional scholarship on the issue of cities, urbanization, is just striking.”

On Thursday, November 12th, 2020 Hirschl addressed the constitutional concerns of urbanization and cities’ relative lack of legislative authority during a Constitutional Roundtable discussion about his new book, “City, State: Constitutionalism and the Megacity”, hosted virtually by the Asper Centre. Hirschl says that the impetus for the book came from the 2019 Ontario Court of Appeal decision of Toronto (City) v Ontario Attorney General, which upheld the constitutionality of the Better Local Government Act. Passed in 2018 by the Ontario government, the Act had the effect of cutting the number of municipal wards in Toronto from 47 to 25, ahead of the municipal election that year.

Hirschl began his address by outlining the rapid acceleration of urban growth the world has faced in the last century. In Canada, Hirschl says, 55 per cent of the population lives in six metropolitan areas, and the Toronto metropolitan area itself is home to 20 per cent of Canada’s population. However, these statistics are not uniquely Canadian in nature, and urban population as compared to rural population globally is on the rise. “UN projections suggest that by the end of the 21st century, we will have cities such as Lagos, Kinshasa, Dar es Salaam, Mumbai and Karachi with populations between 70 and 85 […] million people,” Hirschl says. Rapid urban growth raises the issue of extreme density, which in turn may present a major challenge to the realization of social and economic rights of individuals.

In Canada, provinces are viewed as creatures of the province, and recent jurisprudence such as Toronto (City) affirms that provinces have the power to govern municipalities regardless of their relative size or population. This is affirmed in the Constitution Act of 1982, where the division of powers, s.92.8, places “ Municipal Institutions in the Province” within the purview of provincial legislation. In the U.S, cities lack any constitutional personality and are likewise governed by the state, according to a paper written by Hirschl, titled “Cities in National Constitutions: Northern Stagnation, Southern Innovation”. Issues such as gerrymandering, the power of the state to pre-empt city legislation, and the systemic sell-out of urban assets by states are representative of the relative constitutional weakness of cities in the U.S. Similar controls can be found in Australia, where states govern policy areas from education to infrastructure in cities, Hirschl says.

However, a number of countries in the global south have attempted to strengthen the constitutional protection of cities, Hirschl says. India, as an example outlined in Hirschl’s paper, adopted two constitutional amendments in 1993. The 73rd Amendment addresses the governance of rural settlement and townships, while the 74th Amendment addresses that of cities. Although the latter amendment allows for 18 policy areas of which the state government may devolve power to the municipality, Hirschl writes that in practice impacts of these changes are varied and the successful implementation of city power is often impacted by political factors. In Brazil, a new federal constitution was adopted in 1988. Included within was Article 182, which provides that “urban development policy, carried out by the municipal public authority, according to the general guidelines fixed by law, is intended to order the full development of the social functions of cities and to guarantee the well-being of their inhabitants”; Article 183 granted protections to long-term dwellers from forced evacuations by land developers. This constitutional right to the city, according to Hirschl, was “complemented by the adoption of the City Statute in 2001 as well as the establishment of the Ministry of Cities and the National Cities Council in 2003.” The Ministry was, nevertheless, absolved in 2019 and the City Statue likewise was repealed, Hirschl says. Likely, the most successful attempt to protect city rights, Hirschl says, is the result of efforts in South Africa, the government of which has included an entire chapter within their constitution (1996) pertaining to city rights. Granting city control over land use, planning, and social housing, etc, “framers wanted to explicitly reverse apartheid related urban policy,” Hirschl says.

Although attempts to constitutionalize city power have been met with varied success, Hirschl maintains the importance of large municipalities in addressing various issues, including climate change, housing, or economic inequality.  “It is impossible to address either rising economic inequality […] or climate change, without direct involvement of city government, and so the constitutional empowerment of cities may be thought of as an effective means of addressing the problem in a more bottom up fashion,” Hirschl argues. “Likewise the more constitutional power cities hold, the more they are likely to invest in social housing.”

Urbanization is one of the most important issues facing us today, Hirschl says, and “new thinking […] about constitutionalism and urbanization is the call of the hour.”

A recording of Professor Hirschl’s Constitutional Roundtable can be viewed here.

Julia Nowicki is a 2L JD student at the Faculty of Law and the Asper Centre’s current work-study student.