Ontario government launches constitutional court challenge against federal 'carbon tax'

The Ontario government filed arguments in court Friday challenging the federal carbon price policy on grounds it is an "unconstitutional hidden tax."

Environment Minister Rod Phillips used that phrase in announcing the move and said the key argument before the Court of Appeal is that putting a price on greenhouse gas emissions is not within the federal government's powers.

Green Party leader Mike Schreiner said the court challenge is ironic, given Premier Doug Ford's use of an override clause in the Constitution this week to ignore a court ruling that struck down his plan to slash Toronto city council's size during a municipal election campaign. The court had said that plan violated freedom of expression protection in the Constitution.

“The irony is appalling actually,” Schreiner told reporters after Phillips' Friday news conference. “The Premier, on the one hand, attacks the judiciary and is now actually using the judiciary to overturn legislation that was democratically passed by the federal government.”

“The premier is talking out of both sides of his mouth,” Schreiner said.

The carbon price challenge capped a week of intense debates and an emergency legislative sitting over Ford’s decision to overrule the court on the municipal law.

“I was elected. The judge was appointed,” Ford said at a press conference Monday. “A democratically elected government, trying to be shut down by the courts — that concerns me more than anything.”

Ford has said cutting city council would save taxpayers $25 million over four years, a figure that has been disputed by Toronto's deputy city manager, who says it will save Torontonians $2.08 over the same period.

Ontario now has officially joined Saskatchewan’s challenge of carbon pricing policy. Ford and Premier Scott Moe announced their plan to support each other's case in July.

Nathalie Des Rosiers, the Liberal Party’s judicial affairs critic, said she believes the Ford government’s “arguments are weak.”

“The federal government has the power to impose a carbon tax,” Des Rosiers, who is a co-editor of the Oxford Handbook of the Canadian Constitution, told reporters. “Knowing what I know about precedence, I don’t think it will be a successful claim.”

Both Des Rosiers and Schreiner urged the provincial government to provide a climate plan instead of embarking on the court challenge. Phillips has said on numerous occasions that a made-in-Ontario plan will be released in the fall.

“Why not put a price on pollution, make the big polluters pay, and put all the money in the pockets of Ontarians?” Schreiner asked. “(Ford) could literally be signing carbon dividend cheques from Doug Ford, Premier of Ontario.”

“They should have complied and they should have done what even (former Conservative leader) Patrick Brown was going to do, and operate within the carbon tax regime,” Des Rosiers said. “But that’s not what they have chosen to do, and here we are again in front of courts and tribunals, and I think we will be there often with the way this government is operating.”

Ford repealed cap and trade policy

Provinces are capable of regulating greenhouse gas emissions themselves, Phillips said, and there is no need for a “one-size-fits-all federal carbon tax" solution, claiming that it would drive up everyday energy costs at the expense of ratepayers.

Ford campaigned on abolishing province’s climate change framework, which came into effect in 2016. The Progressive Conservative government revoked the regulations that underpinned cap and trade — later tabling legislation to repeal it entirely — as one of their first orders of business.

Federal law allows the federal government to impose a carbon price on provinces which do not create their own. The Ontario government scrapped the former Liberal government's cap and trade program, which the Ford PCs inaccurately labeled a tax and claimed that would enable a cut in the cost of gas by 10 cents a litre. Cap and trade, enacted in 2016, was a shared carbon market between Quebec, California and Ontario, that allowed businesses to buy and sell emission allowances for greenhouse gas pollution.

Lisa DeMarco, a Toronto-based energy lawyer, says Ontario's argument sounds consistent with Saskatchewan’s constitutional reference.

“They’ll still have an uphill battle,” she told National Observer. “I think it’s interesting to see how it plays out.

Nathalie Chalifour agrees. She is an associate professor at the University of Ottawa's faculty of law and co-director of the Centre for Environmental Law and Global Sustainability.

“Like Saskatchewan’s factum, Ontario’s factum raises no new compelling arguments to suggest that the federal law is unconstitutional," she told National Observer in an email.

This week, the Ontario government opened up its cancellation of the cap and trade system to consultation, hours after Greenpeace filed a lawsuit in the superior court. Greenpece argued the Conservative government had violated the Ontario Environmental Bill of Rights when they sought to dramatically alter climate policies without asking Ontarians.

"You can’t make life better for Ontarians without a plan to protect them from the ever-deadlier and more destructive impacts of climate change,” said Keith Stewart, senior energy strategist for Greenpeace. “Rather than spending millions of taxpayer money to try to undermine the federal plan, the Ford government should tell us what they think an effective climate plan looks without a price on pollution.”

The law canceling cap and trade requires the environment minister to present a new plan, though it doesn’t require the government to legislate emission targets.

Greenpeace’s lawsuit was initially set to receive an expedited hearing since the bill would have likely been passed when the legislature was scheduled to return Sept. 24. Since the province will not be passing the act until the 30-day consultation period ends Oct. 11, the suit will not be heard until later this year.