March 29, 2021

Canada’s High Court Rules Carbon Tax Is Constitutional

In a 6-3 decision issued on March 25, Canada’s Supreme Court ruled that the nation’s Greenhouse Gas Pricing Act, which sets minimum emissions standards for Canadian provinces, is constitutional. The law also gives the federal government the power to apply its own carbon tax as a backstop for provinces that do not meet the national standard. (Seven of 13 provinces currently pay the backstop rate of C$30 per ton of carbon dioxide.)

As CBC explained, “Chief Justice Richard Wagner, writing for the majority, said the federal government is free to impose minimum pricing standards because the threat of climate change is so great that it demands a coordinated national approach. He agreed with the federal government’s argument that climate change is a pressing matter of national concern and said it’s constitutionally permissible for Ottawa to take the lead on a threat that crosses provincial boundaries.”

The decision “allows Ottawa to push ahead with its ambitious plan to ensure every province and territory has a price on carbon to curb greenhouse gas emissions.”

In the United States, meanwhile, last week the American Petroleum Institute endorsed putting a price on carbon emissions as part of its wider new climate policy platform. Read more here.