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

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}

Unresolved Fault Lines Appear on the Normative Scope of Criminal Law Powers

By Nicholas Buhite

On July 10th, 2020, the Supreme Court of Canada released its judgment in Reference re Genetic Non-Discrimination Act (2020 SCC 17), a reference case coming out of the Quebec Court of Appeal. At issue was whether Parliament had constitutional jurisdiction under criminal law powers provided in s. 91(27) of the Constitution Act, 1867, or whether the law fell solely within provincial competence over property and civil rights under s. 92(13). In a five-four decision, the Supreme Court of Canada overturned the ruling made by the Quebec Court of Appeal and held that the law was within Parliament’s jurisdiction under its criminal law powers.

Justice Karakatsanis wrote for the plurality, joined by Justices Abella and Martin. Justice Moldaver, joined by Justice Côté, wrote a separate concurring opinion. Justice Kasirer, joined by Chief Justice Wagner and Justices Brown and Rowe, wrote in dissent.

Background

In 2017, Parliament passed the Genetic Non-Discrimination Act on a free vote without government support. Among other things, the Act made it an offence punishable by indictment or summary conviction for anyone offering goods, contracts, or services to compel any person to undergo genetic testing or disclose its results. In the same vein, withholding goods, services, or contracts for refusing to undergo such testing was also prohibited, as was collecting, utilizing, or disclosing genetic testing information without a person’s written consent. The Act also established exceptions to these rules for certain medical and research purposes.

Following the passage of the Act, the Attorney General of Quebec, joined by the Attorney General of Canada, presented a reference question to the Quebec Court of Appeal submitting that ss. 1 – 7 of the Act were ultra vires. They contended that the act fell solely within provincial property and civil rights powers set out under s. 92(13) of the Constitution Act, 1867 and not under federal criminal law powers set out in s. 91(27).

To assess this division of power argument, a court must establish what the “pith and substance” (R v Morgentaler [1993]), also called the “dominant purpose” (Reference re Assisted Human Reproduction Act) or “true subject matter” (Reference re Pan-Canadian Securities Regulation) of the impugned provision is and determine whether that subject matter falls within the scope of a matter under federal authority. In defining the “dominant purpose” of the impugned provision, a court must look to its purpose and effects (both legal and practical) (Firearms Reference). To fall under criminal law powers, the pith and substance of the impugned provision must 1. consist of a prohibition; 2. be accompanied by a penalty; and 3. be supported by a criminal law purpose. In this case, whether there is a valid criminal law purpose to the provision was the primary issue for the Court.

In 2018, the Quebec Court of Appeal concluded that the Act did not fall within federal competence. It held that, in pith and substance, the law was meant to promote public health by encouraging the use of genetic testing by assuaging fear that the results may be used against someone. It also held that the impugned provision did not, in pith and substance, prohibit or address discrimination (Para 12). In its determination that this goal was not a valid criminal law purpose, the Court of Appeal distinguished the goal of promoting public health from defending public health against “intrinsic threats” such as drugs and tobacco. Instead the court held that the law regulated information available for employment and insurance purposes, and fell within provincial competence over property and civil rights (Para 13)

The Canadian Coalition for Genetic Fairness, acting as amicus curiae, appealed to the Supreme Court of Canada.

Karakatsanis, Abella and Martin (Plurality)

Justice Karakatsanis’ plurality opinion differed significantly from the Court of Appeal on the proper characterization of the pith and substance of the impugned provisions.

In determining the provisions’ purpose she rejected the idea presented by the Court of Appeal and other justices on the Supreme Court that the dominant purpose of the Act was to increase the public’s willingness to undergo genetic testing, and took a broader view that the law was meant to prevent discrimination and address Canadians’ fears that their genetic test results could be used against them. This difference in description was based primarily on a broader interpretation of the Parliamentary record and a willingness to examine the purpose of the provisions in the general context of the Act. In examining effects, she held that the practical effect of the impugned provisions was to give individuals control of their genetic testing data in a broad and general sense. By adopting a broad and general interpretation of the law’s effects, J. Karakatsanis also rejected the position, presented in J. Kasirer’s dissent, that the provisions served mainly to regulate insurance contracts.

In classifying what head of power this overarching purpose would fall under, the plurality held that it falls under criminal law powers to protect against threats to autonomy, privacy, equality and public health. Justice Karakatsanis also held that Parliament, by seeking to supress what it considered to be the moral wrong of potential genetic discrimination, acted under well-established criminal law powers to combat such wrongs (Margarine Reference). She also noted that Parliament’s choice to target precursors to discrimination rather than the discrimination itself, does not limit their criminal law powers over the matter (RJR-MacDonald).

In discussing the scope of Parliament’s criminal law authority over public health, the plurality held that “…[P]arliament is entitled to use its criminal law powers to respond to a reasoned apprehension of harm, including a threat to public health” (Para 96) and “no degree of seriousness of harm need be proved before it can make criminal law” (Para 79). Justice Karakatsanis held that such a reasoned apprehension of harm existed in this case and rejected the idea that Parliament’s criminal law powers could be effectively limited by a notion of “evils” or moral threats. Justice Kasirer, in his dissent, would have derived a more strenuous “real threat of harm” standard from the criminal jurisprudence’s past references to “evils.”

Moldaver and Côté (Concurrence)

While Justice Moldaver wrote in agreement with the result of the case, his characterization of the dominant purpose of the provisions represents something of a middle ground between J. Karakatsanis’ position and that of the Court of Appeal.

While he recognized that preventing or decreasing the likelihood of discrimination was an important facet of the provision, he held that it was not the dominant purpose. Instead, he looked to the health-centred definition that the Act gives to genetic testing, and to his own view of the Parliamentary record, and found that the dominant purpose of the Act was to protect public health against the threat that people would forego genetic testing out of fear that they would not have control over the test results.

In assessing whether Parliament’s criminal law authority applied to this alleged threat to public health, J. Moldaver declined to take a side between a “reasoned apprehension of harm” or a “real threat” standard, but stated that he would have found that Parliament was justified under either framework. In his view, the threat of detrimental health effects due to people foregoing genetic testing was real and well-defined, and the indirect methods used to tackle it were analogous to the federal powers exercised against tobacco advertising in RJR-Macdonald.

Kasirer, Wagner C.J., Brown and Rowe (Dissent)

Justice Kasirer rejected J. Karakatsanis and J. Moldaver’s characterizations of the pith and substance of the provisions, instead following the Court of Appeal’s approach.

He rejected the proposition that the impugned provisions of the Act were meant to combat genetic discrimination based on the idea the text did not prohibit it outright. Instead he argued that the sole dominant purpose of the Act was to promote usage of genetic testing and that goals of protecting individuals’ control over their data or making discrimination harder were solely ancillary to that purpose. In evaluating the effects of the provisions, he placed significant weight on the impacts they would have on the insurance industry, identifying the dominant purpose of the provisions as “removing the fear that information from genetic tests could serve discriminatory purposes in the provision of goods and services, in particular in insurance contracts, in order to encourage Canadians to avail themselves of those tests ” (Para 221).

In applying this characterization to criminal law powers, J. Kasirer argues that a mere deleterious effect on the public good is insufficient to capture the attention of criminal law. Instead, J. Kasirer argues that impugned legislation should 1. relate to a public purpose, 2. respond to a well-defined threat to be suppressed or prevented, and 3. relate to a threat that is “real” in that Parliament had a concrete basis and reasoned apprehension of harm when enacting the impugned legislation (Para 234).

Based on this standard, J. Kasirer went on to conclude that the threat to health, or privacy and autonomy, were not sufficiently well-defined and that there was no evidentiary basis to conclude that such a threat, even if better defined, presented a real threat of harm. He also rejected J. Moldaver’s position on harm arising from undetected diseases by stating that combatting such a harm was only a secondary effect of Parliament’s effort to promote genetic testing.

As such, J. Kasirer concluded that the provisions did not fall within federal powers over criminal law, but under provincial powers over property and civil rights.

Conclusion

By upholding federal jurisdiction over genetic testing, the Court has significantly expanded privacy protections for individuals undergoing such procedures. Nevertheless, the Court missed an opportunity to find majority support for a clear demarcation of the nature of threats that Parliament may respond to under criminal law powers. This failure to establish a predictable standard will likely lead to continuing uncertainty in federalist jurisprudence.

Nicholas Buhite is a 2L JD Candidate at the Faculty of Law.