Doug Ford broke law when he cut cap and trade, Ontario court finds

Ontario Premier Doug Ford's government broke the law by not holding public consultations before it scrapped the province's cap-and-trade program, an Ontario court has found.

Two of three Ontario Superior Court judges determined that the Ford government acted illegally when it killed the province’s cap-and-trade carbon price without first carrying out public consultations with Ontarians as required by the Environmental Bill of Rights (EBR).

Lawyers for Greenpeace Canada and Ecojustice brought the case to court in September 2018, arguing the Ford government acted illegally when it cancelled the province's cap and trade program without consulting the public.

The suit alleged that Ford’s environment minister, Rod Phillips, did not “do everything in his power to notify the public of the government's proposal to cancel this program, and allow the public to comment on it for a period of at least 30 days before the proposal is implemented” as the province’s environmental bill of rights legally mandates.

According to provincial law, the minister must provide for public notice and comment on proposed regulations and legislation that could have “a significant effect on the environment” at least 30 days before implementation.

In the 30-page decision, the two judges found the Ford government was in "clear breach of the EBR" and that "its apparent efforts to avoid judicial review of this conduct raises serious concerns — not about whether the government had the lawful authority to repeal the Cap and Trade Act, but of its respect for the rule of law and the role of the courts, as a branch of government."

"The new government failed to comply with the law,” one of the judges, David Corbett, wrote in the decision. “It has since sought to justify that illegality by its election victory and has passed legislation purporting to preclude judicial review of what it has done. In my view, the ‘practical effect’ of this determination is to state, clearly, that self-granted impunity does not trump the rule of law."

Ontario Environment Minister Jeff Yurek hailed the decision as a victory, citing the dismissal of the suit, but did not comment on the judge’s findings on the illegality of the decision.

The judges noted that because cap and trade has been repealed, and has been subject to public consultation after the challenge, “there is no practical purpose” to seeking damages or legal penance.

Yurek said in a statement that the Ford government “campaigned on a clear commitment to eliminate the cap-and-trade program that made life costly for Ontario’s families and businesses,” and touted the Made-in-Ontario Environment Plan.

“Our plan serves as proof that you can both oppose a carbon tax and continue to do more to fight climate change — you don’t have to choose,” he stated, using an oft-repeated slogan.

Dianne Saxe, former environmental commissioner of Ontario, said she was glad the court upheld the requirements of the bill — the importance of which she emphasized in her final report before her office was axed — and “rapped the government on its knuckles.” But she was left unsatisfied with the repercussions.

“It didn’t lead to any consequences. The government got away with tearing out our cap-and-trade system just before the Nobel Prize (in) Economics was given to the man who proved that a price for carbon was the cheapest and best way to move to a green economy.”

‘The government cannot ignore the EBR on the basis that it has the legal authority to govern’

During the 2018 provincial election, Ford campaigned on ending Ontario’s “cap-and-trade carbon tax” as part of his plan to reduce gas prices by 10 cents per litre. Standing on the steps of Queen's Park as a newly sworn-in premier, Ford said scrapping the province's key climate strategy would be his first act in office.

The court decision notes the very hasty timeline that followed: “The election was on June 7, 2018. The press release from the office of the premier-elect followed immediately upon the election results being made public: the decision to end cap and trade was already made, before the minister was named to the new cabinet or sworn in. The cabinet was sworn in on June 29, 2018, and later that same day the cancelling regulation was enacted.”

Despite the EBR’s legal requirement to allow for 30 days of public consultations, a week later, on July 7, 2018, Rod Phillips, then environment minister, revoked regulations that provided the framework for cap and trade. In doing so, he also invoked Section 10 of the Cap and Trade Cancellation Act, which contains a broad clause preventing anyone from taking the government to court for compensation over the end of this program.

Throughout all this, the official reason continuously given by the government was that the election campaign effectively serves as public consultation.

But the court decision handed down Friday found that “a general election is in no way 'substantially equivalent' to the process of public participation prescribed in the EBR.”

"I understand the political logic of the government's actions," Corbett writes. "lt is this. ‘We ran on a platform that we would repeal cap and trade. We won. We are going to fulfil our promise. lt doesn't matter what the public might say in a process under the EBR: we said we would do this, and we are going to do this. Therefore, we are not going to conduct the public participation process required by the EBR.’

"This is not defensible as a matter of law. In a democracy characterized by the rule of law, the government cannot ignore the EBR on the basis that it has the legal authority to govern: its authority to govern is circumscribed by the law."

Justice Graeme Mew added that “the EBR provides for a comprehensive process that goes well beyond the blandishments of the campaign trail.”

The decision notes that the EBR requires “more than notice of an intention to implement a new policy. It requires specific notice of the proposed action, an opportunity for Ontarians — all Ontarians — to provide comments about the proposed action. It requires the government to consider the comments given to it by Ontarians. And it requires the government to explain what impact, if any, the process of public consultation (will have) on its proposed action.”

Corbett noted that the decision handed Friday "makes a point broader than its four corners: it makes the point that the government is not above the law and may not insulate itself from judicial review when it acts unlawfully."

Ecojustice’s Amir Attaran — who represented Greenpeace in this suit — said the decision was historic, since the EBR's statutes aren't normally tested in court “because governments don’t violate them.”

“But Doug Ford's first decision in power was to violate Ontario's environmental rights. It was his first act on his first morning in government, and it was illegal,” Attaran said in an interview. “Not a good start.”

Lisa DeMarco, a Toronto environmental lawyer, said it was a win for environmental rights in Ontario, noting that while Justice Corbett called the EBR "modest legislation" while Justice Mew called it "substantive, important" legislation, both agreed that the bill ensures the government "takes into consideration the views of all Ontarians."

Demarco add that the decision is "a shot across the bow" for present and future governments.

In an interview, Demarco noted the Ontario decision has broad parallels to what is happening south of the border where U.S. President Donald Trump has lost three legal challenges.

"It's a nice little shout out from three talented justices to say no one, including government is above the law," Demarco said. "This is a cautionary tale about process. Process matters. And you can't flagrantly disregard procedural laws in getting to the legislative outcome you want."

How did we get here?

The cap-and-trade agreement was set up by the former Liberal government. Under a multinational agreement, Ontario, Quebec and California collectively agreed to limits — or caps — on the greenhouse-gas emissions that large industrial polluters in each jurisdiction can emit every year.

Under this system, companies are able to purchase allowances to offset the pollution they expect to emit over a given period. All the revenues generated through the sale of these allowances are then redirected to green-energy projects. And if a company emits less than the expected amount, it can sell its allowances to other companies that emitted more.

Greenpeace said it wrote to Phillips on July 23 to oppose his revocation and, on Aug. 15, was promised a “substantive reply as soon as possible” that has still not come. On Sept. 11, Greenpeace served the government notice it will apply for judicial review of the move.

Prompted by the legal notice, Ford’s government announced the next day it would consult Ontarians about its climate-change policies.

Saxe said she found that, out of the 11,000 people who participated in the consultation, only one per cent supported the cancellation of cap and trade.

Despite that, “the government went ahead anyways,” Saxe said in an interview, adding that she wrote a letter at the same saying the government was not using the EBR consistently.

The final legislation associated with the June cancellation of cap and trade passed in November 2018, and included a clause — Section 10 — that said the government could not be sued.

Only one of the three judges involved with Friday’s court decision agreed that the government has the right to do this.

But Attaran says that the decision will open the door to more lawsuits, and that Section 10 of the cap-and-trade cancellation act “was not an effective vaccine against being sued for Doug Ford.”

“There were a great many investors who held assets in the cap-and-trade market and their assets were turned to nothing overnight. They are going to sue and they now have a green light to sue,” he said.

“And with hundreds of millions or perhaps billions of dollars of cancelled emissions credits out there, this could become a real problem for him.”

In an exclusive investigation, National Observer revealed that 227 emissions-reducing projects were cancelled on the day Ontario effectively pulled out of the cap-and-trade program — a fact not revealed by the Ford government.

These projects included 120 commuter cycling programs (each worth $25,000) in 120 jurisdictions across the province. It was set to help develop 41 green social housing programs, and 20 improvement or retrofit projects for social housing apartments. Money raised through the program was also going to go toward 11 electric vehicle charging stations and one electric-bus pilot in the city of Brampton (Canada's ninth largest city).

‘The conservatives are zero for three in fighting carbon pricing in the courts’

In a statement, Greenpeace’s Keith Stewart said the organization was “pleased” with the decision.

“Ontarians are marching in the streets demanding real action in response to the climate emergency, and we call on the Ford government to listen to the people this time, starting with an abandonment of its challenge of the federal carbon tax,” he said.

On Thursday, Environmental Defence released a report that looked at whether or not the government was adhering to the seven key actions the Ford government pledged to carry out in its own plan to fight climate change, and found "next to no progress" had been made on all but one.

The report says the government has taken no action on two programs that together account for one-third of its emissions-reduction target, which includes expanding conservation programs to reduce natural gas consumption and supporting innovation, such as energy storage and low-carbon heating fuels.

It says the government has taken minimal action on programs that account for another 40 per cent of the greenhouse gas (GHG) target, including increased use of green vehicles, cleaner fuels and emissions-reduction funds for businesses.

The report also notes that electric vehicle sales in Ontario decreased by 55 per cent during the first quarter of 2019 as compared to the same period last year, after the government scrapped all rebates for purchasing electric cars.

The cancellation of cap and trade also opened the door for the federal government to apply a carbon price to Ontario. And all legal challenges against this carbon price thus far — in Saskatchewan and in Ontario — have so far failed.

The latest decision means “the conservatives are zero for three in fighting carbon pricing in the courts,” Attaran said.

“It’s a reminder that just because you win an election does not mean you're above the law.”

Editor's note: This story was updated on Oct. 11, 2019 at 4:30 p.m. to include additional quotes from Ecojustice, Greenpeace and the court decision. It was updated again at 6:50 p.m. to add quotes from Lisa Demarco.