Greenhouse Gas Pollution Pricing Act

{{Infobox legislation

| short_title = Greenhouse Gas Pollution Pricing Act

| image = Parliament-Ottawa.jpg

| imagesize =

| imagelink =

| imagealt =

| caption =

| long_title = An Act to mitigate climate change through the pan-Canadian application of pricing mechanisms to a broad set of greenhouse gas emission sources and to make consequential amendments to other Acts

| citation = S.C. 2018, c. 12, s. 186

| territorial_extent = Canada

| enacted_by = House of Commons of Canada

| date_enacted =

| date_assented = June 21, 2018

| date_signed =

| date_commenced = June 21, 2018

| bill = Bill C-74 (Part 5), 42nd Parliament, 1st Session{{cite web | url=https://parl.ca/DocumentViewer/en/42-1/bill/C-74/royal-assent | title=Government Bill (House of Commons) C-74 (42-1) - Royal Assent - Budget Implementation Act, 2018, No. 1 - Parliament of Canada }}

| bill_citation =

| bill_date =

| introduced_by = Bill Morneau, Minister of Finance

| 1st_reading = March 27, 2018

| 2nd_reading = April 23, 2018

| 3rd_reading = June 6, 2018

| white_paper =

| committee_report = May 28, 2018

| enacted_by2 = Senate of Canada

| bill2 = Bill C-74 (Part 5)

| 1st_reading2 = June 7, 2018

| 2nd_reading2 = June 11, 2018

| 3rd_reading2 = June 14, 2018

| committee_report2 = June 14, 2018

| amendments =

| repeals =

| related =

| summary =

| keywords = Carbon pricing, climate change

| status = current

}}

The Greenhouse Gas Pollution Pricing Act{{efn|Full title: An Act to mitigate climate change through the pan-Canadian application of pricing mechanisms to a broad set of greenhouse gas emission sources and to make consequential amendments to other Acts}} ({{langx|fr|Loi sur la tarification de la pollution causée par les gaz à effet de serre}}) is a Canadian federal law establishing a set of minimum national standards for carbon pricing in Canada to meet emission reduction targets under the Paris Agreement.{{cite news |title=What you need to know about the Ontario Court of Appeal's carbon-tax decision |url=https://www.tvo.org/article/what-you-need-to-know-about-the-ontario-court-of-appeals-carbon-tax-decision|work=TVO |publisher=Ontario Educational Communications Authority|date=June 28, 2019|last=McGrath |first=John Michael }} It was passed as Part 5 of the Budget Implementation Act, 2018, No. 1 – an omnibus budget bill – during the 42nd Parliament of Canada.{{cite web|title=Bill C-74 |url=https://www.parl.ca/DocumentViewer/en/42-1/bill/C-74/royal-assent |publisher=Parliament of Canada}} The law came into force immediately upon receiving royal assent on June 21, 2018.{{cite act|title=Greenhouse Gas Pollution Pricing Act |legislature=Parliament of Canada |date=June 21, 2018 |index=S.C. 2018, c. 12, s. 186 |url=https://laws.justice.gc.ca/eng/acts/G-11.55/FullText.html}}

On March 25, 2021, the Supreme Court of Canada rejected the 2019 appeal of the provinces of Alberta, Ontario, and Saskatchewan and ruled in Reference re Greenhouse Gas Pollution Pricing Act that the GHGPPA was constitutional.{{Cite court | court = Supreme Court of Canada| access-date = March 25, 2021| date = March 25, 2021| url = https://www.scc-csc.ca/case-dossier/cb/2021/38663-38781-39116-eng.aspx}}{{cite news |last1=Tasker |first1=John Paul |title=Supreme Court rules Ottawa's carbon tax is constitutional |url=https://www.cbc.ca/news/politics/supreme-court-federal-carbon-tax-constitutional-case-1.5962687 |publisher=CBC |date=March 25, 2021}}{{cite news |last1=FINE |first1=SEAN |last2=BAILEY |first2=IAN |last3=GRANEY |first3=EMMA |title=Canada's carbon pricing is constitutional, Supreme Court rules |url=https://www.theglobeandmail.com/canada/article-canadas-carbon-tax-is-constitutional-supreme-court-rules/ |publisher=The Globe and Mail Inc |date=March 25, 2021}} Commentators had varying reactions to who the ruling benefited most politically,{{cite news |last1=Coyne |first1=Andrew |title=The Supreme Court rules. And the winner is … Erin O'Toole? |url=https://www.theglobeandmail.com/opinion/article-the-supreme-court-rules-and-the-winner-is-erin-otoole/ |publisher=The Globe and Mail Inc |date=March 25, 2021}}{{cite news |last1=Platt |first1=Brian |title=The dissenting view: Two SCC justices say federal carbon tax 'rewrites the rules of Confederation' |url=https://nationalpost.com/news/politics/the-dissenting-view-why-two-scc-justices-say-the-federal-carbon-tax-rewrites-the-rules-of-confederation |publisher=National Post, a division of Postmedia Network Inc |date=March 25, 2021}}{{cite news |last1=Cosh |first1=Colby |title=Federal government plays the 'POGG' card on carbon tax |url=https://nationalpost.com/opinion/colby-cosh-the-feds-play-the-pogg-card-on-carbon-tax |publisher=National Post, a division of Postmedia Network Inc |date=March 25, 2021}} with some stating that it represented a blow to the group of conservative premiers that made opposition to carbon pricing a central aspect of their policies.{{cite news |last1=Clark |first1=Campbell |title=The court deals a blow to the already-weakening political opposition to carbon taxes |url=https://www.theglobeandmail.com/politics/article-the-court-deals-a-blow-to-the-already-weakening-political-opposition/ |publisher=The Globe and Mail Inc |date=March 25, 2021}}

On March 14, 2025, Trudeau's successor as prime minister, Mark Carney, removed the consumer carbon tax implemented via the Act through a prime ministerial directive that was affirmed by an order-in-council signed by the Governor General.{{cite web |last1=Major |first1=Darren |title=Carney kills consumer carbon tax in first move as prime minister |url=https://www.cbc.ca/news/politics/mark-carney-drops-carbon-tax-1.7484290 |website=CBC News |access-date=14 March 2025 |date=14 March 2025}}

Provisions

The legislation aims to put a price on all greenhouse gases that play a significant role in trapping heat in the atmosphere through binding "minimum national standards" on the federal government and all of the provinces and territories of Canada.{{cite web |title=Legislative Proposals Relating to the Greenhouse Gas Pollution Pricing Act |url=https://fin.canada.ca/drleg-apl/2018/ggpp-tpcges-eng.html |website=fin.gc.ca |publisher=Ministry of Finance |date=January 2018}} The standards on pricing are divided into two parts: a regulatory charge on carbon-based fuels and an output-based emissions trading system for polluting industries.{{cite web |title=How we're putting a price on carbon pollution |url=https://www.canada.ca/en/environment-climate-change/services/climate-change/pricing-pollution-how-it-will-work/putting-price-on-carbon-pollution.html |website=Environment and Climate Change Canada |publisher=Government of Canada |accessdate=August 5, 2019 |date=October 23, 2018}}

The GHGPPA requires that all provincial and territorial governments establish a pollution pricing scheme that meets the national minimum price per tonne of carbon dioxide equivalent and established emission caps under the act.{{cite news |last1=Brean |first1=Joseph |title=In dissent on carbon pricing, a 'traditionalist' judge puts Ottawa in its place |url=https://nationalpost.com/news/in-dissent-on-carbon-pricing-a-traditionalist-judge-puts-ottawa-in-its-place |agency=National Post |publisher=Postmedia Network Inc. |date=June 28, 2019}} A federally-managed backstop system under GHGPPA applies in provinces or territories that do not have a system that meets the criteria or if the province or territory request the federal system be used. {{As of|2019|06}}, five provinces and two territories are under the federal pricing system for one or both aspects of pollution pricing. The provinces of Ontario, Manitoba, New Brunswick, and Saskatchewan are under both the federal fuel charge and industrial emissions trading system; the territories of Yukon and Nunavut are voluntarily under both systems; and Prince Edward Island is voluntarily under the federal pricing system for industrial emissions trading only. Following the repeal of Alberta's provincial fuel levy on May 30, 2019, the federal fuel charge system will be applied to Alberta beginning January 1, 2020.{{cite web |first1= |title=Alberta and pollution pricing |url=https://www.canada.ca/en/environment-climate-change/services/climate-change/pricing-pollution-how-it-will-work/alberta.html |website=Environment and Climate Change Canada |publisher=Government of Canada |accessdate=September 25, 2019 |date=June 28, 2019}}

All funds collected under the federal system are returned to the province or territory where they are collected. In cases where the provincial or territorial government requested to be part of the federal system, such as Yukon (fuel charge and emissions trading) or Prince Edward Island (emissions trading only), the funds are remitted to the government of that province or territory.{{cite news |last1=Aiello |first1=Rachel |title=How federal carbon tax rebates will be doled out |url=https://www.ctvnews.ca/politics/how-federal-carbon-tax-rebates-will-be-doled-out-1.4146471 |accessdate=August 5, 2019 |work=CTV News |date=October 23, 2018}} Residents of provinces and territories that are under the federal system due to not implementing a pollution pricing system, such as Ontario and New Brunswick, receive their share of the collected charges directly as a tax-free Climate Action Incentive Payment paid out four times per year (until 2022 the CAI was a refundable tax credit on the federal income tax for residents of these provinces instead).{{cite news |last1=Ballingall |first1=Alex |title=Carbon tax rebate claimed by 97 per cent of eligible families so far this year, Canada Revenue Agency says |url=https://www.thestar.com/politics/federal/2019/05/24/almost-everyone-who-is-eligible-97-per-cent-has-claimed-the-carbon-price-rebate-on-their-taxes-so-far-this-year.html |accessdate=August 5, 2019 |work=Toronto Star |date=May 24, 2019 |language=en}}{{Cite web |publisher=Canada Revenue Agency |first= |date=20 April 2022 |title=Climate action incentive payment |url=https://www.canada.ca/en/revenue-agency/services/child-family-benefits/cai-payment.html |access-date=21 July 2022 |website=Tax credits and benefits for individuals|quote=The CAIP will now be paid as a quarterly benefit. If you are entitled, you will automatically receive your CAIP four times a year, starting in July 2022.}} Approximately ten percent of the money collected from these "backstop provinces" is separately distributed by the federal government for environmental initiatives in those provinces, such as green retrofits of public schools.{{cite news |last1=Thurton |first1=David |title=Ottawa earmarks $60M for school retrofits in provinces that fought carbon tax |url=https://www.cbc.ca/news/politics/school-retrofits-carbot-backstop-1.5188886 |accessdate=August 10, 2019 |work=CBC News |date=June 25, 2019}}

Constitutional challenges

The provisions of the GHGPPA were opposed by the governments of Saskatchewan and Ontario, and challenged in provincial courts. They were joined in their legal challenges by several others. For example, under Premier Blaine Higgs, the New Brunswick Attorney General submitted his intention to intervene in Saskatchewan's court challenge of the federal government's carbon pricing plan.{{efn|In November 2018, the Attorney General of New Brunswick submitted his intention to "intervene in the Matter of the Greenhouse Gas Pollution Pricing Act, Bill C-74, Part V, and in the Matter of a Reference by the Lieutenant Governor in Council to the Court of Appeal under The Constitutional Questions act, 2012."}}{{cite news |url=https://www.ctvnews.ca/politics/n-b-to-intervene-in-saskatchewan-court-challenge-of-carbon-tax-1.4198112 |title=N.B. to intervene in Saskatchewan court challenge of carbon tax |first=Kevin |last=Bissett |date=November 29, 2018 |access-date=December 19, 2018 |work=CTV News |archive-url=https://web.archive.org/web/20181211103117/https://www.ctvnews.ca/politics/n-b-to-intervene-in-saskatchewan-court-challenge-of-carbon-tax-1.4198112 |archive-date=December 11, 2018 |url-status=live }}

= Saskatchewan =

On May 3, 2019, the Court of Appeal for Saskatchewan ruled in favour of the federal government in a 155-page 3–2 split decision that concluded that, "The Greenhouse Gas Pollution Pricing Act is not unconstitutional either in whole or in part."{{efn|{{cite journal |title=In The Matter Of The Greenhouse Gas Pollution Pricing Act, Bill C-74, Part 5 And In The Matter Of A Reference By The Lieutenant Governor In Council To The Court Of Appeal For Saskatchewan Under The Constitutional Questions Act, 2012, SS 2012, c C-29.01 |journal=Court of Appeal for Saskatchewan |date=May 3, 2019 |volume=Citation: 2019 SKCA 40 |issue=Docket: CACV3239 |url=https://sasklawcourts.ca/images/documents/CA_2019SKCA040.pdf}}}}{{cite news |title=Federal carbon tax is constitutional: Saskatchewan Court of Appeal |url=https://globalnews.ca/news/5237439/federal-carbon-tax-constitutional-saskatchewan-court-appeal/ |publisher=Global News, a division of Corus Entertainment Inc |date=May 3, 2019}} The federal government argued successfully that the Act was a legitimate exercise of Parliament’s "Peace, Order, and good Government" (POGG) power.{{Cite news| date = May 3, 2019| newspaper = Regina Leader-Post| title = Sask. carbon tax challenge: SK Appeal Court rules in Ottawa's favour | access-date = May 23, 2019| url = https://leaderpost.com/news/saskatchewan/sask-carbon-tax-challenge-decision-coming-at-noon}} Moe said he would bring the case before the Supreme Court of Canada.

On May 31, 2019, Premier Scott Moe filed his appeal of the Saskatchewan decision to the Supreme Court of Canada. He hopes the case will be heard in the fall of 2019.{{Cite news| date = May 31, 2019| first = Adam |last=Hunter |work=CBC News| title = Saskatchewan files notice of carbon tax appeal to Supreme Court of Canada | access-date = June 21, 2019| url = https://www.cbc.ca/news/canada/saskatchewan/sask-carbon-tax-supreme-court-appeal-1.5157465}}

= Ontario =

Following the election of a Progressive Conservative Party government under Doug Ford in the 2018 Ontario general election, Ontario cancelled its participation in the Western Climate Initiative cap-and-trade system.{{cite news |last1=Rieti |first1=John |title=Doug Ford is officially ending Ontario's cap-and-trade plan, but what's next? |url=https://www.cbc.ca/news/canada/toronto/doug-ford-ending-cap-and-trade-1.4731954 |accessdate=August 9, 2019 |work=CBC News |date=July 3, 2018}} For this reason, the province was deemed non-compliant with the minimum national standards set by the GHGPPA and both backstop federal pricing systems were implemented for Ontario on April 1, 2019.{{cite news |last1=Tasker |first1=John Paul |title=What you need to know: Federal carbon tax takes effect in Ont., Manitoba, Sask. and N.B. today |url=https://www.cbc.ca/news/politics/tasker-federal-carbon-tax-explainer-1.5077445 |accessdate=August 9, 2019 |work=CBC News |date=April 1, 2019}}

Ontario's Environment Minister Rod Phillips and Attorney General Caroline Mulroney announced a $30 million plan on August 2, 2018, to challenge the constitutionality of the GHGPPA in the Court of Appeal for Ontario.{{cite news|url=https://globalnews.ca/news/4367217/ontario-carbon-tax-court-challenge/ |title=Ontario government to challenge federal carbon tax plan in court |first=Paola |last=Loriggio |date=August 2, 2018 |access-date=August 5, 2018 |work=Global News|agency=The Canadian Press |archive-url=https://web.archive.org/web/20180803112130/https://globalnews.ca/news/4367217/ontario-carbon-tax-court-challenge/ |archive-date=August 3, 2018 |url-status=live }} The court challenge was opposed by all three of the province's opposition parties. Eighteen parties were granted intervenor status.{{cite web|author1=Strathy C.J.O. |author2=Hoy A.C.J.O. |author3=MacPherson, Sharpe |author4=Huscroft JJ.A. |title=Reference re Greenhouse Gas Pollution Pricing Act, 2019 ONCA 544 |url=http://www.ontariocourts.ca/decisions/2019/2019ONCA0544.htm |publisher=Court of Appeal for Ontario |date=June 28, 2019}} Intervenors supporting the Ontario government's challenge included the conservative Canadian Taxpayers Federation and Alberta's United Conservative Party (at the time forming Alberta's Official Opposition),{{cite news |last1=Vigliotti |first1=Marco |title=Parties in Ford government's challenge of federal carbon price get intervenor status |url=https://ipolitics.ca/2019/01/16/parties-in-ford-governments-challenge-of-federal-carbon-price-get-intervenor-status/ |accessdate=August 9, 2019 |work=iPolitics |date=January 16, 2019}} while the Assembly of First Nations and environmentalist groups like the David Suzuki Foundation were among the intervenors supporting the GHGPPA's constitutionality.{{cite web |last1=Foreman |first1=Gideon |title=Health organization to support carbon pricing in court |url=https://davidsuzuki.org/expert-article/health-organization-to-support-carbon-pricing-in-court/ |website=David Suzuki Foundation |accessdate=August 9, 2019 |date=January 28, 2019}}

The Court of Appeal for Ontario ruled by a four to one margin on June 28, 2019, that the Greenhouse Gas Pollution Pricing Act was constitutional.{{cite news|url=https://nationalpost.com/news/canada/newsalert-ottawas-carbon-pricing-law-valid-ontarios-top-court-rules|title=Federal government's carbon tax is constitutional, Ontario's top court rules|date=June 28, 2019|last=Perkel|first=Colin|work=National Post|agency=The Canadian Press|access-date=July 13, 2019}}{{cite news |last1=Ballingall |first1=Alex |last2=Ferguson |first2=Rob |title=Ontario's top court rebuffs Doug Ford government's challenge to federal carbon price plan |url=https://www.thestar.com/politics/provincial/2019/06/28/ontarios-top-court-rules-today-on-federal-governments-carbon-pricing-law.html |accessdate=August 9, 2019 |work=Toronto Star |date=June 28, 2019 |language=en}} Specifically, writing for the majority, Chief Justice George Strathy ruled that the law was within federal jurisdiction "to legislate in relation to matters of 'national concern' under the 'Peace, Order, and good Government' {{sic}} clause of s. 91 of the Constitution Act, 1867."

Justice Grant Huscroft wrote in his dissenting opinion that the decision of the majority could have repercussions to the existing division of powers between the provinces and the federal government. He noted: "federalism is no constitutional nicety; it is a defining feature of the Canadian constitutional order that governs the way in which even the most serious problems must be addressed" and "in effect, [the federal government] has asked the court to sanction a change to the constitutional order – to increase Parliament's lawmaking authority while diminishing that of the provincial legislatures, and to do so on a permanent basis." Huscroft's dissent was described as "traditionalist" in its view of the division of powers and compared to Gérard La Forest, a former puis-ne on the Supreme Court of Canada, by former Attorney-General Peter MacKay.

The Ontario government filed an appeal of the decision with the Supreme Court of Canada on August 28, 2019.{{cite news |title=Ontario appeals federal carbon tax decision to Supreme Court of Canada |url=https://www.cbc.ca/news/canada/toronto/appeal-carbon-ford-ontario-supreme-1.5262871 |accessdate=August 30, 2019 |work=CBC News |date=August 28, 2019}}

= Supreme Court of Canada =

On March 25, 2021, the Supreme Court of Canada ruled that the Greenhouse Gas Pollution Pricing Act is constitutional.{{cite web | title = Reference re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11 | publisher = CanLII | url = https://canlii.ca/t/jdwnw | access-date = March 25, 2021 | date = March 25, 2021 }}