Court of Appeal for Saskatchewan  
Docket: CACV3239  
Citation: Reference re Greenhouse Gas  
Pollution Pricing Act, 2019 SKCA 40  
Date: 2019-05-03  
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  
Before:  
Richards C.J.S., Jackson, Ottenbreit, Caldwell and Schwann JJ.A.  
Disposition:  
The majority of the Court is of the opinion that the Greenhouse Gas  
Pollution Pricing Act is not unconstitutional in whole or in part. The  
minority of the Court is of the opinion that the Act is wholly  
unconstitutional.  
Majority reasons by:  
In concurrence:  
The Honourable Chief Justice Richards  
The Honourable Madam Justice Jackson  
The Honourable Madam Justice Schwann  
Minority reasons by:  
The Honourable Mr. Justice Ottenbreit and The Honourable  
Mr. Justice Caldwell  
Appeal Heard:  
Counsel:  
February 1314, 2019  
Mitch McAdam, Q.C., and Alan Jacobson for the Attorney General of  
Saskatchewan  
Sharlene Telles-Langdon, Brooke Sittler and Neil Goodridge for the  
Attorney General of Canada  
Joshua Hunter, Padraic Ryan and Thomas Lipton for the Attorney General  
of Ontario  
William Gould for the Attorney General of New Brunswick  
Gareth Morley for the Attorney General of British Columbia  
David Thera, Q.C., and Robert Affleck for Saskatchewan Power  
Corporation and SaskEnergy Incorporated  
Bruce Hallsor, Q.C., and Alexander Shalashniy for Canadian Taxpayers  
Federation  
Ryan Martin and Steven Dollansky for United Conservative Association  
Jeffrey Grubb, Q.C., and Khurrum Awan for Agricultural Producers  
Association of Saskatchewan Inc.  
Lisa DeMarco and Jonathan McGillivray for International Emissions  
Trading Association  
Jennifer King and Michael Finley for Canadian Public Health Association  
Amir Attaran and Matt Hulse for Athabasca Chipewyan First Nation  
Jacqueline Wilson and Theresa McClenaghan for Canadian  
Environmental Law Association and Environmental Defence Canada,  
Inc.  
Stuart Wuttke and Victor Carter for Assembly of First Nations  
Joshua Ginsberg and Danielle Gallant for David Suzuki Foundation  
Stewart Elgie and Nathalie Chalifour for Ecofiscal Commission of Canada  
Nathan Hume for Intergenerational Climate Coalition  
Larry Kowalchuk and Taylor-Anne Yee for Climate Justice Saskatoon;  
National Farmers Union; Saskatchewan Coalition for Sustainable  
Development; Saskatchewan Council for International Cooperation;  
Saskatchewan Electric Vehicle Club; The Council of Canadians:  
Prairie and Northwest Territories Region; The Council of Canadians:  
Regina Chapter; The Council of Canadians: Saskatoon Chapter; The  
New Brunswick Anti-Shale Gas Alliance; and Youth of the Earth  
i
TABLE OF CONTENTS FOR THE MAJORITY REASONS  
I. The question posed ................................................................................................................. 1  
II. Overview................................................................................................................................. 1  
III.  
Background......................................................................................................................... 4  
A. The greenhouse gas issue.................................................................................................... 4  
B. International efforts to address climate change .................................................................. 6  
C. Climate change initiatives in Canada.................................................................................. 8  
D. The basic architecture of the Act....................................................................................... 10  
E. The application of the Act................................................................................................. 12  
IV.  
Analysis............................................................................................................................. 13  
A. Does the principle of federalism render the Act unconstitutional?................................... 15  
B. Does the Act impose taxes in contravention of s. 53 of the Constitution Act, 1867? ....... 20  
1. Basic principles............................................................................................................. 20  
2. Does Part 1 impose a tax or a regulatory charge?......................................................... 22  
3. Does Part 2 impose a tax or a regulatory charge?......................................................... 25  
4. If Part 1 or 2 does impose a tax, is s. 53 of the Constitution Act, 1867 offended?....... 27  
C. Is the Act sustainable under the national concern branch of POGG? ............................... 31  
1. Basic principles............................................................................................................. 32  
2. The pith and substance of the Act ................................................................................. 33  
3. The POGG “matter” in issue......................................................................................... 35  
4. Application of the Crown Zellerbach test..................................................................... 41  
5. The validity of the Act................................................................................................... 46  
D. Can the Act be upheld under heads of jurisdiction identified by the intervenors? ........... 47  
1. The general trade and commerce power ....................................................................... 47  
2. Treaty powers................................................................................................................ 50  
3. Criminal law power....................................................................................................... 51  
4. The emergency power................................................................................................... 57  
5. Section 35 of the Constitution Act, 1982 ...................................................................... 57  
E. A final issue ...................................................................................................................... 58  
V. Conclusion ............................................................................................................................ 59  
Appendix A................................................................................................................................. 149  
ii  
TABLE OF CONTENTS FOR THE MINORITY REASONS  
I. Introduction........................................................................................................................... 60  
II. The Constitution Act, 1867 ................................................................................................... 60  
A. The division of powers...................................................................................................... 63  
B. Sections 91 and 92 ............................................................................................................ 63  
C. Pith and substance............................................................................................................. 69  
1. Characterisation ............................................................................................................ 69  
a. Background............................................................................................................... 69  
b. Preamble to the Act ................................................................................................... 73  
c. The two schemes of the Act ...................................................................................... 74  
d. The two schemes and matter characterisation .......................................................... 76  
2. Scheme of taxation or regulatory scheme? ................................................................... 77  
a. The characteristics of a tax ....................................................................................... 79  
b. Distinguishing a regulatory charge from a tax.......................................................... 79  
3. Tax or regulatory charge? ............................................................................................. 80  
a. Lawson tax analysis .................................................................................................. 81  
b. Regulatory scheme analysis...................................................................................... 84  
4. Classification of the Act.............................................................................................. 100  
D. Constitutional limits on the power to tax........................................................................ 105  
1. No clear and unambiguous delegation of the power to tax......................................... 110  
2. Overbreadth in the delegation of law-making power ................................................. 112  
3. The backstop aspect of the Act.................................................................................... 118  
E. Peace, Order and good Government ............................................................................... 123  
1. Federalism................................................................................................................... 123  
2. The POGG power ....................................................................................................... 125  
3. The two-step test in Crown Zellerbach....................................................................... 129  
4. Analysis....................................................................................................................... 133  
5. Conclusion under POGG ............................................................................................ 147  
III.  
IV.  
Climate change and Confederation................................................................................. 147  
Opinion ........................................................................................................................... 148  
Appendix A................................................................................................................................. 149  
Page 1  
Richards C.J.S.  
I.  
THE QUESTION POSED  
[1]  
This is a reference pursuant to s. 2 of The Constitutional Questions Act, 2012, SS 2012,  
c C-29.01. By way of Order in Council 194/2018, the Lieutenant Governor in Council has asked  
the Court for an advisory opinion on the following question:  
The Greenhouse Gas Pollution Pricing Act was introduced into Parliament on March 28,  
2018 as Part 5 of Bill C-74. If enacted, will this Act be unconstitutional in whole or in  
part?  
[2]  
The Greenhouse Gas Pollution Pricing Act, SC 2018, c 12, s 186 [Act], came into force  
on June 21, 2018. It varies in some small particulars from Part 5 of Bill C-74, as referred to in  
Order in Council 194/2018. I understand the Lieutenant Governor in Council to be concerned  
with the Act as it presently stands and will proceed on that basis. All of the participants in these  
proceedings took the same approach.  
[3]  
As explained below, and in answer to the question posed by the Lieutenant Governor in  
Council, the Act falls within the legislative authority of Parliament. It is not unconstitutional in  
whole or in part.  
II.  
OVERVIEW  
[4]  
The factual record presented to the Court confirms that climate change caused by  
anthropogenic greenhouse gas [GHG] emissions is one of the great existential issues of our time.  
The pressing importance of limiting such emissions is accepted by all of the participants in these  
proceedings.  
[5]  
The Act seeks to ensure there is a minimum national price on GHG emissions in order to  
encourage their mitigation. Part 1 of the Act imposes a charge on GHG-producing fuels and  
combustible waste. Part 2 puts in place an output-based performance system for large industrial  
facilities. Such facilities are obliged to pay compensation if their GHG emissions exceed  
applicable limits. Significantly, the Act operates as no more than a backstop. It applies only in  
   
Page 2  
those provinces or areas where the Governor in Council concludes GHG emissions are not priced  
at an appropriate level.  
[6]  
The sole issue before the Court is whether Parliament has the constitutional authority to  
enact the Act. The issue is not whether GHG pricing should or should not be adopted or whether  
the Act is effective or fair. Those are questions to be answered by Parliament and by provincial  
legislatures, not by courts.  
[7]  
The Constitution Act, 1867 distributes legislative authority between Parliament and the  
provincial legislatures. Broadly speaking, a statute is valid if its essential character falls within a  
subject matter allocated to the legislative body that put the statute in place. Neither level of  
government has exclusive authority over the environment. As a result, Parliament can legislate in  
relation to issues such as GHGs so long as it stays within the four corners of its prescribed  
subject matters and the provinces can do the same so long as they stay within their prescribed  
areas of authority.  
[8]  
The Attorney General of Saskatchewan [Saskatchewan] challenges the Act by submitting  
it imposes taxes in the constitutional sense of the term. This would normally be legally  
unobjectionable because Parliament enjoys a broad taxing authority. However, Saskatchewan  
contends the Act is invalid because the Governor in Council determines the provinces where it  
operates. This is said to offend the principle of federalism in that the application of the Act  
depends on whether a province has exercised its own jurisdiction in relation to pricing GHG  
emissions to a standard considered appropriate by the Governor in Council. Saskatchewan also  
says the Act runs afoul of s. 53 of the Constitution Act, 1867. Section 53 requires, in effect, that  
taxes be authorized by legislative bodies themselves, not by executive government or otherwise.  
[9]  
Saskatchewan’s arguments on this front cannot be accepted. The principle of federalism  
is not a free-standing concept that can override an otherwise validly enacted law. Rather, it is a  
value to be taken into account when interpreting the Constitution. The s. 53 argument cannot be  
sustained either because, in constitutional terms, the levies imposed by the Act are regulatory  
charges, not taxes. In any event, even if they were taxes, the Act does not offend s. 53.  
Parliament has clearly and expressly authorized the Governor in Council to decide where the Act  
will apply.  
Page 3  
[10] Saskatchewan submits, by way of an alternative line of argument, that the Act is  
unconstitutional because it is concerned with property and civil rights and other matters of a  
purely local nature falling within exclusive provincial legislative authority. The Attorney General  
of Canada [Canada] responds by seeking to uphold the Act as a valid exercise of Parliament’s  
jurisdiction under the national concern branch of its “Peace, Order, and good Government”  
[POGG] power. The national concern branch of POGG applies to matters of national  
consequence that have a singleness, distinctiveness and indivisibility clearly distinguishing them  
from matters coming within provincial jurisdiction and, as well, a scale of impact on provincial  
jurisdiction that is compatible with the basic division of powers between Parliament and the  
legislatures under the Constitution. Canada contends it should be recognized, under the national  
concern branch, as having jurisdiction over “the cumulative dimensions of GHG emissions”.  
This approach must be rejected because it would allow Parliament to intrude so deeply into areas  
of provincial authority that the balance of federalism would be upset. Further, it would hamper  
and limit provincial efforts to deal with GHG emissions.  
[11] However, Parliament does have authority over a narrower POGG subject matter the  
establishment of minimum national standards of price stringency for GHG emissions. This  
jurisdiction has the singleness, distinctiveness and indivisibility required by the law. It also has a  
limited impact on the balance of federalism and leaves provinces broad scope to legislate in the  
GHG area. The Act is constitutionally valid because its essential character falls within the scope  
of this POGG authority.  
[12] Various intervenors suggest the Act, or aspects of it, can be sustained under such federal  
heads of power as trade and commerce, the emergency doctrine, criminal law and treaty powers.  
Canada has chosen not to make these submissions itself but says it does not object to the Act  
being upheld on any of these grounds. At the end of the day, none of these arguments are viable  
in light of how Parliament has chosen to frame the Act.  
[13] As explained below, it follows from all of this that the Act is not unconstitutional either in  
whole or in part.  
Page 4  
III. BACKGROUND  
A. The greenhouse gas issue  
[14] GHGs are gases that absorb and re-emit infrared radiation. Carbon dioxide is the most  
recognizable GHG.  
[15] The general character of the GHG phenomenon and the basic science of climate change  
are not contested by any of the participants in this Reference. In simplest terms, planet Earth  
absorbs energy from sunlight. When that energy is emitted, GHGs capture some of it. This slows  
the escape of such energy into space and, over time, heats the atmosphere and the surface of the  
earth. These higher temperatures disrupt global climate patterns.  
[16] The broad contours of the impact of anthropogenic emissions of GHGs and of the nature  
of the climate change issue are summarized in Climate Change 2014 Synthesis Report Summary  
for Policymakers [Climate Change 2014]. It was prepared by the Intergovernmental Panel on  
Climate Change [IPCC], which was established by the United Nations Environmental  
Programme and the World Meteorological Organization. The IPCC, as described by John  
Moffet, Assistant Deputy Minister with Environment and Climate Change Canada, in his  
affidavit of October 25, 2018, is “the leading world body for assessing the most recent scientific,  
technical, and socio-economic information produced worldwide relevant to understanding  
climate change, its impacts and potential future risks, and possible response options”. Climate  
Change 2014 concludes as follows:  
(a)  
“Human influence on the climate system is clear, and recent anthropogenic  
emissions of greenhouse gases are the highest in history. Recent climate changes  
have had widespread impacts on human and natural systems” (at 2).  
(b)  
“Warming of the climate system is unequivocal, and since the 1950s, many of the  
observed changes are unprecedented over decades to millennia. The atmosphere  
and ocean have warmed, the amounts of snow and ice have diminished, and sea  
level has risen” (at 2).  
   
Page 5  
(c)  
Anthropogenic greenhouse gas emissions have increased since the pre-industrial  
era, driven largely by economic and population growth, and are now higher than  
ever. This has led to atmospheric concentrations of carbon dioxide, methane and  
nitrous oxide that are unprecedented in at least the last 800,000 years. Their  
effects, together with those of other anthropogenic drivers, have been detected  
throughout the climate system and are extremely likely to have been the dominant  
cause of the observed warming since the mid-20th century” (emphasis in original,  
at 4).  
(d)  
(e)  
“Changes in many extreme weather and climate events have been observed since  
about 1950. Some of these changes have been linked to human influences,  
including a decrease in cold temperature extremes, an increase in warm  
temperature extremes, an increase in extreme high sea levels and an increase in  
the number of heavy precipitation events in a number of regions” (at 7).  
“Continued emission of greenhouse gases will cause further warming and long-  
lasting changes in all components of the climate system, increasing the likelihood  
of severe, pervasive and irreversible impacts for people and ecosystems. Limiting  
climate change would require substantial and sustained reductions in greenhouse  
gas emissions which, together with adaptation, can limit climate change risks”  
(at 8).  
(f)  
“Surface temperature is projected to rise over the 21st century under all assessed  
emission scenarios. It is very likely that heat waves will occur more often and last  
longer, and that extreme precipitation events will become more intense and  
frequent in many regions. The ocean will continue to warm and acidify, and  
global mean sea level to rise” (emphasis in original, at 10).  
(g)  
“Climate change will amplify existing risks and create new risks for natural and  
human systems. Risks are unevenly distributed and are generally greater for  
disadvantaged people and communities in countries at all levels of development”  
(at 13).  
Page 6  
(h)  
“Without additional mitigation efforts beyond those in place today, and even with  
adaptation, warming by the end of the 21st century will lead to high to very high  
risk of severe, widespread and irreversible impacts globally (high confidence). ...”  
(emphasis in original, at 17).  
None of these conclusions were challenged or put in issue by the participants in this Reference.  
[17] Climate change impacts affecting Canada and Canadians include thawing permafrost,  
increases in extreme weather and extreme weather events such as forest fires, degradation of soil  
and water resources, increased frequency and severity of heat waves, and expansion of the ranges  
of vector-borne diseases. Predictions show that Canada’s temperature, particularly in the Arctic,  
will warm at a faster rate than that of the world as a whole. See: Affidavit of John Moffet at  
paras 1826.  
B.  
International efforts to address climate change  
[18] The United Nations Framework Convention on Climate Change [Framework  
Convention] was ratified by Canada in December of 1992 and came into force internationally in  
March of 1994. The objective of the Framework Convention, as described in Article 2, is to  
achieve the “stabilization of greenhouse gas concentrations in the atmosphere at a level that  
would prevent dangerous anthropogenic interference with the climate system”.  
[19] Canada’s commitments under the Framework Convention include a commitment to adopt  
“national policies and take corresponding measures on the mitigation of climate change, by  
limiting its anthropogenic emissions of greenhouse gases” (Article 4 at para 2(a)) with the aim of  
“returning [GHG emissions] individually or jointly to their 1990 levels” (Article 4 at para 2(b)).  
[20] The Framework Convention established a Conference of the Parties [COP], which is the  
decision-making body of the Convention. All states that are parties are represented at the COP.  
[21] The third session of the COP [COP 3] took place in Kyoto in 1997. The resulting Kyoto  
Protocol observed that the GHG emission reduction targets established by the Framework  
Convention were inadequate and established binding GHG reduction commitments for developed  
country parties. Canada ratified the Kyoto Protocol in 2002 and committed to reduce its GHG  
 
Page 7  
emissions for 20082012 to an average of six percent below 1990 levels. Canada withdrew from  
the Kyoto Protocol in 2012.  
[22] COP 15 took place in Copenhagen in 2009. The Copenhagen Accord, agreed to by 114 of  
the 194 parties to the Framework Convention, declared that “climate change is one of the  
greatest challenges of our time” and recognized the scientific view that, to achieve the objective  
of the Convention, the increase in global temperature should be below two degrees Celsius.  
Canada joined the Copenhagen Accord and pledged to reduce its GHG emissions by 17 percent  
from its 2005 levels by 2020.  
[23] COP 21 was held in Paris in 2015. The resulting Paris Agreement was ratified by Canada  
in October of 2016 and entered into force in November of 2016. Currently, the Paris Agreement  
has been ratified by 179 states and the European Union.  
[24] The preamble of the Paris Agreement reflects the COP’s assessment of the urgency of  
addressing climate change. It includes the following terms:  
Recognizing that climate change represents an urgent and potentially irreversible  
threat to human societies and the planet and thus requires the widest possible cooperation  
by all countries, and their participation in an effective and appropriate international  
response, with a view to accelerating the reduction of global greenhouse gas emissions,  
Also recognizing that deep reductions in global emissions will be required in order to  
achieve the ultimate objective of the Convention and emphasizing the need for urgency in  
addressing climate change,  
Emphasizing with serious concern the urgent need to address a significant gap  
between the aggregate effect of Parties’ mitigation pledges in terms of global annual  
emissions of greenhouse gases by 2020 and aggregate emission pathways consistent with  
holding the increase in the global average temperature to well below 2 °C above pre-  
industrial levels and pursuing efforts to limit the temperature increase to 1.5 °C above  
pre-industrial levels.  
[25] To repeat, the aim of the Paris Agreement is to strengthen the global response to the  
threat of climate change by “[h]olding the increase in the global average temperature to well  
below 2 °C above pre-industrial levels and pursuing efforts to limit the temperature increase to  
1.5 °C above pre-industrial levels” (Article 2 at para 1(a)). In order to achieve this goal, the  
parties “aim to reach global peaking of greenhouse gas emissions as soon as possible,  
recognizing that peaking will take longer for developing country Parties” (Article 4 at para 1).  
Page 8  
C.  
Climate change initiatives in Canada  
[26] Prior to Canada signing the Paris Agreement, the Prime Minister and all provincial and  
territorial premiers [First Ministers] met in Vancouver to discuss climate change issues. The  
result was the March 3, 2016, Vancouver Declaration on Clean Growth and Climate Change  
[Vancouver Declaration]. First Ministers recognized the call in the Paris Agreement for  
significant reductions in GHG emissions and committed to “implement GHG mitigation policies  
in support of meeting or exceeding Canada’s 2030 target of a 30% reduction below 2005 levels  
of emissions, including specific provincial and territorial targets and objectives” (at 1).  
[27] The Vancouver Declaration spoke to increasing the level of ambition in relation to  
limiting GHG emissions, promoting clean economic growth, and increasing action on adaptation  
and resilience. In the section on GHG mitigation, the Declaration observed that carbon pricing  
mechanisms were being used in Canada and elsewhere to “drive the transition to a low carbon  
economy” (at 3). The Declaration also indicated that “the provinces and territories have the  
flexibility to design their own policies to meet emission reductions targets, including their own  
carbon pricing mechanisms” (at 3). The Declaration went on to provide for the establishment of  
a Working Group on Carbon Pricing Mechanisms. The Working Group was to “provide a report  
with options on the role of carbon pricing mechanisms in meeting Canada’s emissions reduction  
targets, including different design options taking into consideration existing and planned  
provincial and territorial systems” (at 7).  
[28] The Working Group prepared a Final Report. It observed in the “Context” section that  
many experts regard carbon pricing as “a necessary policy tool for efficiently reducing GHG  
emissions” (at 5) and that there was a widespread international trend toward carbon pricing. The  
Final Report went on to describe various carbon pricing mechanisms and to explore design  
parameters for such mechanisms. It identified three options for carbon pricing: (a) a single  
broad-based pricing mechanism for the entire country; (b) broad-based pricing mechanisms in all  
jurisdictions but with flexibility of instrument choice; and (c) a range of broad-based pricing  
mechanisms in some jurisdictions with the remaining jurisdictions instituting other mechanisms  
or policies to meet specific GHG reduction targets within their jurisdictions (at 44).  
 
Page 9  
[29] The federal government released a document entitled Pan-Canadian Approach to Pricing  
Carbon Pollution on October 3, 2016. The approach outlined in the document was grounded  
both on the proposition that economy-wide carbon pricing was the most efficient way to reduce  
GHG emissions and a recognition that several jurisdictions including British Columbia, Ontario  
and Québec had already introduced carbon pricing regimes. The approach proposed by the  
government involved a pan-Canadian “benchmark” for carbon pricing. The benchmark involved  
a requirement that pricing regimes apply to essentially the same emission sources as British  
Columbia’s carbon tax. The required stringency of the benchmark, for an explicit price-based  
system, was that carbon pricing should start at a minimum of $10 per tonne in 2018 and rise by  
$10 per year to $50 per tonne in 2022. The provinces with cap-and-trade systems would have to  
ensure that emission reduction targets were in line with Canada’s overall reduction target. As  
well, the federal government’s approach was stated to involve a “backstop”. This was the idea  
that the federal government would introduce an explicit price-based carbon pricing system in  
jurisdictions that did not meet the benchmark.  
[30] First Ministers convened on December 9, 2016, to adopt the Pan-Canadian Framework  
on Clean Growth and Climate Change [Pan-Canadian Framework]. It addressed carbon pricing  
as well as matters concerning adaptation, clean technology and innovation issues. In relation to  
carbon pricing, the Framework said the provinces and territories had the flexibility to design  
their own policies to meet emission reductions targets and that the approach should be flexible  
and recognize already implemented carbon pricing policies in some provincial jurisdictions. It  
annexed the federal benchmark announced in October of 2016.  
[31] It is also worth observing here that the Pan-Canadian Framework proceeded on the basis  
that GHG pricing was a necessary, but not sufficient, response to the GHG problem. As a result,  
the Pan-Canadian Framework also outlined extensive complementary actions in relation to  
electricity generation, construction practices, transportation, industry, forestry, agriculture and  
waste management. It also addressed financing for clean technology research and innovations.  
[32] In May of 2017, the federal government released a document entitled Technical Paper on  
the Federal Carbon Pricing Backstop [Technical Paper]. It outlined the components of the  
proposed carbon pricing system and sought feedback from stakeholders. Further information was  
Page 10  
provided in Guidance on the Pan-Canadian Carbon Pollution Pricing Benchmark, a document  
published by the federal government in August of 2017. Supplemental Benchmark Guidance  
followed in December of 2017.  
[33] The Government of Saskatchewan did not accept the federal government’s proposed  
carbon pricing scheme and did not adopt the Pan-Canadian Framework. In December of 2017,  
Saskatchewan released its own climate change strategy. Prairie Resilience: A Made-in-  
Saskatchewan Climate Change Strategy outlined the steps the Province plans to take in order to  
address climate change. This strategy does not include a broad-based carbon tax or levy. This  
was explained as follows at page 1:  
We wholeheartedly support efforts to reduce greenhouse gases. But those efforts must be  
effective and they must not disadvantage one region of Canada more than another. A  
federal carbon tax is ineffective and will impair Saskatchewan’s ability to respond to  
climate change.  
Our opposition to the federal government’s carbon tax should not be seen as reluctance to  
act. Rather, it is a recognition that we must act, and act decisively, with all our economic  
strength. For Saskatchewan, mitigation is not enough. Our agriculture and resource-rich  
province must also focus on climate adaptation and resilience in order to be effective.  
The Strategy includes a plan to impose sector-specific output-based performance standards on  
facilities emitting more than 25,000 tonnes of CO2 equivalent per year and to obligate facilities  
that emit more than the regulated standard to take compliance actions.  
D.  
The basic architecture of the Act  
[34] The federal government proceeded with the legislative steps necessary to establish  
minimum national standards of price stringency of GHG emissions. The Act was introduced in  
the House of Commons in March of 2018 as Part 5 of the Budget Implementation Act, 2018,  
No. 1, SC 2018, c 12 (Bill C-74).  
[35] The Act came into force on June 21, 2018. It has four parts.  
[36] Part 1 implements a fuel charge. It applies to 22 GHG-producing fuels listed in Schedule  
2 of the Act. These include such things as gasoline, kerosene, fuel oil, propane, coke oven gas,  
and methanol. The Governor in Council may add to, or delete from, this list (s 3, definition of  
“fuel”; s 17(1)).  
 
Page 11  
[37] The charge under Part 1 applies to fuels that are produced, delivered or used in a listed  
province (ss 17, 18, 21(1), 34 and 35), brought to a listed province from another place in Canada  
(ss 19(1) and 20(2)) or imported into Canada at a place in a listed province (ss 19(2) and 20(3)).  
Generally, a registered distributor will pay the fuel charge. The registered distributors will  
typically be fuel producers or wholesale fuel distributors. Part 1 also imposes a charge on the  
burning of combustible waste used to generate heat or energy (s 25).  
[38] The amount of the charge for each fuel is set out in Schedule 2 of the Act. For 2019, the  
specified rates represent $20 per tonne of CO2 equivalent emitted by each fuel. The rates rise to a  
total of $50 per tonne of CO2 equivalent in 2022.  
[39] The Part 1 charge is not payable on fuels delivered to specified persons. Such persons  
include farmers and fishers in respect of qualifying fuels (s 17(2)). Further, the charge is not  
payable on fuels delivered to industrial facilities subject to the output-based performance  
standards under Part 2 of the Act. This is because GHG emissions for such facilities are priced  
under Part 2.  
[40] Part 1 also provides specific rules for determining the fuel charge applicable to certain  
interjurisdictional air, marine, rail and road concerns (ss 2835).  
[41] The fuel charge is administered by the Minister of National Revenue acting through the  
Canada Revenue Agency. Part 1 sets out a variety of administrative rules dealing with filing  
obligations, filing periods and so forth. It also prescribes penalties and means of recovery.  
[42] Part 2 of the Act establishes output-based performance standards for GHG emissions by  
large industrial facilities. It applies to “covered facilities”. These are facilities either designated  
by the Minister or meeting criteria specified in the regulations (s 169). Mr. Moffet indicates in  
his affidavit that the initial intention is that the output-based performance standards will apply  
primarily to facilities with annual CO2 equivalent emissions of 50 kt or more annually  
(at para 111). See: Notice Establishing Criteria Respecting Facilities and Persons and  
Publishing Measures, SOR/2018-213. As noted, covered facilities are exempt from the Part 1  
fuel charge.  
Page 12  
[43] The annual GHG emissions limits for covered facilities will employ an emissions  
intensity standard established by regulation. The output-based standard for an industry will be  
prescribed as a percentage of the GHGs emitted on average by the facilities in the industrial  
sector for a given unit of product.  
[44] Part 2 requires a covered facility to provide compensation for the portion of its GHG  
emissions that exceeds its annual limit (s 174). This can be done in one of three ways: (a) by  
submitting surplus credits earned in the past or acquired from other facilities; (b) by paying an  
excess emissions charge; or (c) a combination of both. If a facility emits less than its annual  
limit, it will receive credits that it can bank and use for future compliance obligations or sell to  
other regulated facilities (s 175).  
[45] Part 2 also includes a variety of administrative enforcement provisions.  
[46] Part 3 of the Act, which is not challenged in this proceeding, authorizes the Governor in  
Council to make provincial laws applicable to federal works and undertakings, federal lands,  
Indigenous lands, internal waters of Canada, the territorial sea, Canada’s exclusive economic  
zone, and the continental shelf. It falls within the jurisdiction of Parliament.  
[47] Part 4 of the Act requires the Minister of Environment to make reports to Parliament.  
There is no suggestion that it is unconstitutional.  
E.  
The application of the Act  
[48] Both Part 1 and Part 2 apply only in provinces or areas listed by the Governor in Council  
in Schedule 1 of the Act. These listings are to be made for “the purpose of ensuring that the  
pricing of greenhouse gas emissions is applied broadly in Canada at levels that the Governor in  
Council considers appropriate” (ss 166(2) and 189(1)). In making an order listing a province or  
area, the Act requires the Governor in Council to take into account, as the “primary factor”, the  
stringency of provincial pricing mechanisms for GHG emissions (ss 166(3) and 189(2)).  
[49] The Minister of National Revenue must distribute the revenues raised under Part 1 and  
Part 2 in a listed province. That distribution may be made to the listed province itself, to  
prescribed persons in that province, or to a combination of both (ss 165(2) and 188(1)).  
 
Page 13  
[50] The Governor in Council, for purposes of Part 1 of the Act, has listed Ontario, New  
Brunswick, Manitoba and Saskatchewan. A modified fuel levy will also apply in Yukon and  
Nunavut. See: SOR/2019-79. For purposes of Part 2 of the Act, the Governor in Council has  
listed Ontario, New Brunswick, Manitoba, Prince Edward Island, Yukon and Nunavut.  
See: SOR/2018-212. Part 2 applies only partially in Saskatchewan because the provincial  
government has implemented its own output-based performance standards system for large  
industrial facilities. See: SOR/2018-213.  
IV. ANALYSIS  
[51] Saskatchewan advances two main lines of argument in seeking to have the Act found  
unconstitutional. The first is that the principle of federalism prevents Parliament from enacting a  
statute applicable in only some provinces because of how those provinces have chosen to  
exercise their legislative authority. Saskatchewan’s second argument is that the Act imposes a tax  
and, because it allows the Governor in Council to decide where it applies, the Act offends the  
requirement in s. 53 of the Constitution Act, 1867 that bills imposing taxes must originate in the  
House of Commons. Saskatchewan goes on to deny that, as contended by Canada, the Act can be  
sustained under Parliament’s authority under the national concern branch of POGG. It also  
denies, as suggested by some intervenors, that the Act, or features of it, can be supported under  
Parliament’s authority in relation to trade and commerce, emergencies, criminal law or treaties.  
[52] In light of the arguments presented by Saskatchewan, Canada and the various intervenors,  
it is appropriate to assess the constitutional validity of the Act by considering the following main  
issues:  
(a)  
(b)  
(c)  
(d)  
Does the principle of federalism render the Act unconstitutional?  
Does the Act impose taxes in contravention of s. 53 of the Constitution Act, 1867?  
Is the Act sustainable under the national concern branch of POGG?  
Can the Act be upheld under heads of jurisdiction identified by the intervenors?  
 
Page 14  
[53] Each of these matters must be addressed in turn. However, before turning to them, it may  
be useful to emphasize three basic points relevant to the required analysis.  
[54] First, “the environment” is not a legislative subject matter that has been assigned to either  
Parliament or the provincial legislatures under the Constitution Act, 1867. Rather, as the  
Supreme Court put it in Friends of the Oldman River Society v Canada (Minister of Transport),  
[1992] 1 SCR 3 at 64, the environment is “a constitutionally abstruse matter which does not  
comfortably fit within the existing division of powers without considerable overlap and  
uncertainty”. Justice La Forest explained this as follows in R v Hydro-Québec, [1997] 3 SCR 213  
[Hydro-Québec]:  
112  
In considering how the question of the constitutional validity of a legislative  
enactment relating to the environment should be approached, this Court in Oldman River,  
supra, made it clear that the environment is not, as such, a subject matter of legislation  
under the Constitution Act, 1867. As it was put there, “the Constitution Act, 1867 has not  
assigned the matter of ‘environment’ sui generis to either the provinces or Parliament”  
(p. 63). Rather, it is a diffuse subject that cuts across many different areas of  
constitutional responsibility, some federal, some provincial (pp. 63-64). Thus Parliament  
or a provincial legislature can, in advancing the scheme or purpose of a statute, enact  
provisions minimizing or preventing the detrimental impact that statute may have on the  
environment, prohibit pollution, and the like. In assessing the constitutional validity of a  
provision relating to the environment, therefore, what must first be done is to look at the  
catalogue of legislative powers listed in the Constitution Act, 1867 to see if the provision  
falls within one or more of the powers assigned to the body (whether Parliament or a  
provincial legislature) that enacted the legislation (ibid. at p. 65). If the provision in  
essence, in pith and substance, falls within the parameters of any such power, then it is  
constitutionally valid.  
(Emphasis added)  
[55] The second general point is that the standard methodology for deciding the constitutional  
validity of a law applies, of course, to laws touching on or implicating the environment. This  
methodology involves a two-stage process. To begin, it is necessary to determine the “pith and  
substance” of the law in question. This involves identifying the essential character or dominant  
characteristic of the law through an examination of both its purpose and its effect. Legislative  
history, Parliamentary debates and other such extrinsic material may be considered in addressing  
the question of purpose. The “mischief” that the legislation is aimed at curing may also be  
considered. Assessing the effect of a law focuses on how the law will operate and how it will  
affect Canadians. See, for example: Reference re Firearms Act, 2000 SCC 31 at paras 1618,  
[2000] 1 SCR 783.  
Page 15  
[56] In the next step of the analysis, the pith and substance of the legislation is slotted into the  
roster of legislative powers found in ss. 91 and 92 of the Constitution Act, 1867. This is not a  
precise science and may involve an interpretation of the scope of the power. As the Supreme  
Court observed in Reference re Firearms Act at paragraph 26, “[l]aws mainly in relation to the  
jurisdiction of one level of government may overflow into, or have ‘incidental effects’ upon, the  
jurisdiction of the other level of government. It is a matter of balance and of federalism: no one  
level of government is isolated from the other, nor can it usurp the functions of the other”. A law  
is valid only if it falls within the jurisdiction of the enacting legislature.  
[57] The third and final general point to note here is that the efficacy of a law in  
accomplishing its goals does not bear on the division of powers analysis. The division of powers  
issue is whether the law in question falls within the jurisdiction of Parliament or the provincial  
legislatures. It is not whether the law is a sound policy initiative. Justice La Forest, dissenting but  
not on this point, explained as follows in RJR-MacDonald Inc. v Canada (Attorney General),  
[1995] 3 SCR 199 at para 44 [RJR-MacDonald]:  
… the wisdom of Parliament’s choice of method cannot be determinative with respect to  
Parliament’s power to legislate. The goal in a pith and substance analysis is to determine  
Parliament’s underlying purpose in enacting a particular piece of legislation; it is not to  
determine whether Parliament has chosen that purpose wisely or whether Parliament  
would have achieved that purpose more effectively by legislating in other ways; see R. v.  
Big M Drug Mart Ltd., [1985] 1 S.C.R. 295, at p. 358 (per Wilson J.) and Morgentaler,  
supra, at p. 487:  
Only when the effects of the legislation so directly impinge on some  
other subject matter as to reflect some alternative or ulterior purpose do  
the effects themselves take on analytic significance.  
[58] With this background confirmed, I turn to the arguments that have been advanced about  
the constitutional validity of the Act.  
A.  
Does the principle of federalism render the Act unconstitutional?  
[59] Saskatchewan submits the principle of federalism is an “overarching limit” on  
Parliament’s powers. It then argues Parliament is not constitutionally entitled to exercise its  
legislative authority in ways that offend the principle of federalism. While not going so far as to  
contend all federal statutes must have uniform application across the country, Saskatchewan  
 
Page 16  
argues Parliament cannot condition the application of laws on how provinces have chosen to  
exercise their own legislative jurisdiction. Thus, so the argument goes, the Act cannot stand  
because it applies only in those provinces that have not adopted GHG pricing regimes considered  
appropriate by the Governor in Council.  
[60] It is useful to begin by underlining that, as Saskatchewan concedes, there is no  
recognized constitutional requirement that laws enacted by Parliament must apply uniformly  
from coast to coast to coast. To the contrary, a number of decisions have upheld federal laws  
with uneven geographic application. For example, in Russell v The Queen (1882), 7 App Cas 829  
[Russell], the Privy Council sustained an Act allowing the Governor in Council, after a petition  
from the electors of a city or county, to apply alcohol prohibitions to that city or county. In  
Lord’s Day Alliance of Canada v British Columbia (Attorney General), [1959] SCR 497, the  
Supreme Court upheld a legislative scheme that allowed provincial laws to provide exceptions to  
federal bans on certain activities. In R v Burnshine, [1975] 1 SCR 693, dealing with a challenge  
under the Canadian Bill of Rights, the Supreme Court upheld a federal law that gave special  
sentencing options to judges in British Columbia. Justice Martland, for the majority, said a  
requirement that laws apply uniformly in all areas of Canada would represent a “substantial  
impairment of the sovereignty of Parliament in the exercise of its legislative powers” (at 705).  
Justice Laskin, as he then was, noted in dissent that “[a]s a matter of legislative power only, there  
can be no doubt about Parliament’s right to give its criminal or other enactments special  
applications, whether in terms of locality of operation or otherwise” (at 715). R v Furtney, [1991]  
3 SCR 89, also warrants mention. It dealt with Criminal Code charges for counselling the  
violation of bingo lotteries. Justice Stevenson observed, at pages 104105, that Parliament may  
“incorporate provincial legislation by reference and it may limit the reach of its legislation by a  
condition, namely the existence of provincial legislation”. See also: R v S. (S.), [1990] 2 SCR  
254 at 289290; R v Turpin, [1989] 1 SCR 1296 at 13331335; Coughlin v Ontario (Highway  
Transport Board), [1968] SCR 569 at 575; Hydro-Québec at para 153.  
[61] I turn, then, to the notion of federalism. It is one of the fundamental organizing principles  
of the Canadian Constitution. See: Reference re Secession of Quebec, [1998] 2 SCR 217 at  
para 57. This is so because the Constitution Act, 1867 divides political power between the federal  
and provincial orders of government by assigning jurisdiction with respect to some subject  
Page 17  
matters to Parliament and assigning jurisdiction with respect to other subject matters to the  
provincial legislatures. See: Maritime Bank of Canada (Liquidators) v Receiver-General of New  
Brunswick, [1892] AC 437 (PC) at 441442. Provincial legislatures and Parliament are sovereign  
within their own realms. Thus, the federalism principle recognizes the autonomy of provincial  
legislatures to independently develop their own political and policy priorities. As indicated in  
Re The Initiative and Referendum Act, [1919] AC 935 (PC) at 942, the aim of the Constitution  
Act, 1867 was not “to weld the Provinces into one, nor to subordinate Provincial Governments to  
a central authority”.  
[62] However, all of this said, federalism is not a free-standing constitutional imperative that  
somehow independently trumps the distribution of powers prescribed by the Constitution Act,  
1867. Rather, it is a value that informs how the Constitution, and especially how the division of  
powers prescribed by the Constitution Act, 1867, is to be understood and interpreted. Thus, by  
way of illustration, the breadth of Parliament’s jurisdiction over trade and commerce under  
s. 91(2) of the Constitution Act, 1867 has been heavily concerned with “the need to reconcile the  
general trade and commerce power of the federal government with the provincial power over  
property and civil rights” (General Motors of Canada Ltd. v City National Leasing, [1989]  
1 SCR 641 at 659 [General Motors]). As explained in Reference re Pan-Canadian Securities  
Regulation, 2018 SCC 48 at para 100, the concern in this regard has been that an aggressive  
interpretation of the trade and commerce power could overwhelm provincial authority in respect  
of matters of a local nature and property and civil rights.  
[63] A recent illustration of the federalism principle in action can be found in R v Comeau,  
2018 SCC 15, [2018] 1 SCR 342. There, the Supreme Court was required to consider the impact  
of s. 121 of the Constitution Act, 1867 which provides that all articles of manufacture from any  
province shall be “admitted free” into each of the other provinces – on a New Brunswick  
restriction on the possession of out-of-province liquor. After observing that foundational  
principles underlying the Constitution may aid in its interpretation, the Court said this about the  
federalism principle:  
[78]  
Federalism refers to how states come together to achieve shared outcomes, while  
simultaneously pursuing their unique interests. The principle of federalism recognizes the  
“autonomy of provincial governments to develop their societies within their respective  
spheres of jurisdiction”: Reference re Secession of Quebec, at para. 58; see also Caron v.  
Alberta, 2015 SCC 56, [2015] 3 S.C.R. 511, at para. 5. The tension between the centre  
Page 18  
and the regions is regulated by the concept of jurisdictional balance: Reference re  
Secession of Quebec, at paras. 56-59. The federalism principle requires a court  
interpreting constitutional texts to consider how different interpretations impact the  
balance between federal and provincial interests. The same concern has led to, for  
example, the development of doctrines like the necessarily incidental doctrine and the  
ancillary powers doctrine.  
(Emphasis added)  
[64] Another recent case, Quebec (Attorney General) v Canada (Attorney General), 2015  
SCC 14, [2015] 1 SCR 693, is also instructive here even though it deals with the concept of  
cooperative federalism (coordinated action between or among governments) as opposed to the  
principle of federalism per se. It arose out of the federal government’s decision to abolish the  
long-gun registry. Québec announced its decision to create its own gun registry and asked the  
federal authorities for their data connected to Québec. Canada refused this request and Québec  
then sought a declaration that it had a right to obtain the data, relying on the unwritten  
constitutional principle of cooperative federalism. The Supreme Court ruled against Québec,  
finding that the principle of cooperative federalism could not prevail over otherwise valid federal  
legislation. Justices Cromwell and Karakatsanis, writing for the majority, said this:  
[20]  
In our respectful view, the principle of cooperative federalism does not assist  
Quebec in this case. Neither this Court’s jurisprudence nor the text of the Constitution  
Act, 1867 supports using that principle to limit the scope of legislative authority or to  
impose a positive obligation to facilitate cooperation where the constitutional division of  
powers authorizes unilateral action. To hold otherwise would undermine parliamentary  
sovereignty and create legal uncertainty whenever one order of government adopted  
legislation having some impact on the policy objectives of another. Paradoxically, such  
an approach could discourage the practice of cooperative federalism for fear that  
cooperative measures could risk diminishing a government’s legislative authority to act  
alone.  
[21]  
We conclude that the principle of cooperative federalism does not prevent  
Parliament from exercising legislative authority that it otherwise possesses to dispose of  
the data.  
(Emphasis added)  
See also: Reference re Firearms Act at para 48; Rogers Communications Inc. v Châteauguay  
(City), 2016 SCC 23 at para 39, [2016] 1 SCR 467; Reference re Pan-Canadian Securities  
Regulation at para 18.  
Page 19  
[65] Notwithstanding these authorities, Saskatchewan suggests the strength of its federalism  
argument is revealed by asking what would happen if a national government, spurned by the  
electors in a particular province, implemented a tax aimed solely at that province in order to, in  
effect, punish the electors in question. Saskatchewan submits that, in such a circumstance, the  
principle of federalism would have to be invoked to invalidate the law. This line of argument is  
not convincing. The easiest and most doctrinally regular answer to Saskatchewan’s hypothetical  
problem lies in the doctrine of colourability, not in the principle of federalism. In other words,  
the punitive law envisioned by Saskatchewan would be struck down not because it offended the  
principle of federalism but because, in pith and substance, it was not a taxwithin the meaning  
of s. 91(3) of the Constitution Act, 1867.  
[66] There is little legal merit in Saskatchewan’s specific concern about Parliament  
conditioning the application of a federal law on whether a province has chosen to exercise its  
own jurisdiction. This is because of a very simple point. Parliament can only act within its own  
sphere of legislative authority. Thus, if it can make a law applicable in a province in light of  
provincial legislative inaction, that necessarily means it enjoyed the authority to make the law  
applicable all along. Parliament cannot somehow acquire additional authority because of a  
provincial decision not to act in relation to a particular matter. Parliament either has legislative  
authority to act or it does not. There is no constitutional magic in the fact a province has failed to  
move in a particular policy area.  
[67] This fundamental reality is perhaps somewhat obscured in areas like the regulation of  
GHG emissions where the constitutional boundaries between federal and provincial authority  
might be somewhat unclear and where there is at least some room for both levels of government  
to legislate. Nonetheless, the basic point remains the same. The scope of Parliament’s  
constitutional authority is not dependent on how or whether a province has exercised its own  
exclusive jurisdiction. Conversely, and putting the doctrine of paramountcy to the side, the scope  
of a province’s constitutional authority is not dependent on how Parliament has or has not  
exercised its jurisdiction.  
Page 20  
[68] Saskatchewan has referred to no judicial authority which in any way directly supports the  
idea that the principle of federalism can or should independently render unconstitutional an  
otherwise valid law. Its argument on this front cannot succeed.  
B.  
Does the Act impose taxes in contravention of s. 53 of the Constitution  
Act, 1867?  
[69] Subsection 91(3) of the Constitution Act, 1867 empowers Parliament to raise money “by  
any Mode or System of Taxation”. In turn, s. 53 of the Constitution Act, 1867 requires that bills  
imposing a tax must originate in the House of Commons. It reads as follows:  
53. Bills for appropriating any Part of the Public Revenue, or for imposing any Tax or  
Impost, shall originate in the House of Commons.  
[70] Saskatchewan acknowledges Parliament’s broad authority to impose taxes. However, it  
argued in its factum that Part 1 of the Act imposes an unconstitutional tax because of the  
discretion enjoyed by the Governor in Council in deciding where Part 1 applies. It contended this  
discretion offends not only the principle of federalism but s. 53 of the Constitution Act, 1867 as  
well. In oral argument, Saskatchewan extended the reach of its submissions on this point and, for  
the first time, took the position that Part 2 of the Act also imposes a tax and that it too is  
unconstitutional by virtue of non-compliance with s. 53. Canada takes the position that the levies  
imposed pursuant to the Act are regulatory charges, not taxes.  
[71] In order to deal with these arguments, it is important to turn first to the controlling legal  
principles. I will then consider whether either Part 1 or Part 2 impose levies that are “taxes” in  
the constitutional sense of the term. Finally, it will be necessary to examine how s. 53 fits into  
the analysis.  
1.  
Basic principles  
[72] The broad characteristics of a tax were stated in Lawson v Interior Tree Fruit and  
Vegetable Committee of Direction, [1931] SCR 357 to be: (a) a levy enforceable by law;  
(b) imposed under the authority of the legislature; (c) levied by a public body; and (d) made for a  
public purpose.  
   
Page 21  
[73] However, there is a difference between taxes on the one hand and regulatory charges,  
including service charges, on the other. The leading case on this distinction is Westbank First  
Nation v British Columbia Hydro and Power Authority, [1999] 3 SCR 134 [Westbank]. There,  
the Supreme Court elaborated on the point previously made in Re Exported Natural Gas Tax,  
[1982] 1 SCR 1004 at 1070, that a levy is a tax if its “primary purpose is the raising of revenue  
for general [governmental] purposes” and that this stands in contrast to a “levy [imposed]  
primarily for regulatory purposes, or as necessarily incidental to a broader regulatory scheme”.  
[74] Justice Gonthier, writing for the Court in Westbank, explained that, in order for charges  
to be imposed for regulatory purposes or to be otherwise incidental to a regulatory scheme, it is  
first necessary to identify a regulatory scheme. He provided a non-exhaustive list of factors to  
consider when determining if there is such a scheme in the required sense. Not all of these  
factors need to be satisfied for such a scheme to exist.  
[75] The first factor is whether there is a complete and detailed code of regulation. Such  
schemes are usually characterized by complexity and detail. The second factor is a specific  
regulatory purpose aimed at affecting behaviour. As Gonthier J. indicated, “a regulatory scheme  
must ‘regulate’ in some specific way and for some specific purpose” (at para 26). The third  
factor is actual or properly estimated costs of the regulation. Thus, for example, the levy found to  
be a regulatory charge in Ontario Home Builders’ Association v York Region Board of  
Education, [1996] 2 SCR 929, was said to have been “meticulously limited” to recoup only  
actual costs. Significantly, although a regulatory charge may exist to offset the costs of the  
regulatory scheme itself, “the regulatory charges themselves may be the means of advancing a  
regulatory purpose” (at para 29). See also: Confédération des syndicats nationaux v Canada  
(Attorney General), 2008 SCC 68 at para 72, [2008] 3 SCR 511 [Confédération]. The fourth and  
final factor identified in Westbank as a consideration in determining whether a governmental  
levy is a regulatory charge is the existence of a relationship between the regulation and the  
person being regulated.  
Page 22  
[76] In broader and more essential terms, Westbank confirms that, in deciding whether a levy  
is a tax or a regulatory charge, the fundamental point is as follows:  
30  
In all cases, a court should identify the primary aspect of the impugned levy. This  
was the underlying current of the earlier cases on s. 125, which focussed on the “pith and  
substance” of the charge: “Johnnie Walker” case [(1922), 64 SCR 377, aff’d [1924] AC  
222]; Re Exported Natural Gas Tax [[1982] 1 SCR 1004]. Although in today’s regulatory  
environment, many charges will have elements of taxation and elements of regulation, the  
central task for the court is to determine whether the levy’s primary purpose is, in pith  
and substance: (1) to tax, i.e., to raise revenue for general purposes; (2) to finance or  
constitute a regulatory scheme, i.e., to be a regulatory charge or to be ancillary or  
adhesive to a regulatory scheme; or (3) to charge for services directly rendered, i.e., to be  
a user fee.  
(Italics emphasis in original; underline emphasis added)  
[77] With this background in place, it is now possible to turn to the particulars of the Act.  
2.  
Does Part 1 impose a tax or a regulatory charge?  
[78] Saskatchewan argues, correctly, that the fact the levy imposed under Part 1 is referred to  
in the Act as a “charge” does not answer the question of whether it is a tax. The characterization  
of a levy for constitutional purposes involves an analysis of its substance. The label applied to a  
levy is not determinative. The Supreme Court has, for example, found probate “fees” (Eurig  
Estate (Re), [1998] 2 SCR 565 [Eurig Estate]) and employment insurance “premiums”  
(Confédération) to be taxes.  
[79] Saskatchewan goes on to contend that the fuel charge under Part 1 bears the hallmarks of  
a tax in that payments must be made to the state under the compulsion of the law. Further, says  
Saskatchewan, Part 1 is administered by the Minister of National Revenue, the monies in  
question are paid into the Consolidated Revenue Fund and disputes with respect to the payment  
of the charge are adjudicated by the Tax Court of Canada. In this broad sense, the fuel charge  
does have several features that tend to give it the appearance of a tax. However, getting to the  
root of the constitutional status of the charge requires a deeper look and, as part of that look, the  
application of the approach mandated by Westbank.  
[80] As for the first Westbank factor, Part 1 is properly characterized as being a complete and  
detailed code of regulation. This is because Part 1 (a) identifies the fuel subject to the charge,  
(b) specifies the amount of the charge with a view to influencing decisions bearing on GHG  
emissions, (c) sets out very specific rules about the application of the charge in various  
 
Page 23  
circumstances including, for example, when fuel is brought into a listed province, when fuel is in  
transit through a listed province and when fuel is held in supply tanks, (d) lays down specific  
rules with respect to certain inter-jurisdictional air, marine, rail and road carriers, (e) specifies  
reports, returns and payments, and (f) goes on to provide, more generally, for the administration  
and enforcement of the scheme. Further, and importantly, Part 1 dovetails into the regulatory  
regime established in Part 2 in that the fuel charge is not applicable to covered facilities. Thus, in  
combination, Parts 1 and 2 operate as an inter-locking regime.  
[81] Turning to the second Westbank factor, it is readily apparent that Part 1 has a specific  
regulatory purpose which seeks to affect the behaviour of individuals. As explained above, the  
Act is the product of a long line of initiatives and agreements tracing back to the Framework  
Convention in 1992. The Act treats GHG pricing as a core element of the initiative to mitigate  
GHG emissions and its self-evident regulatory purpose is to attach a minimum national cost to  
GHG emissions so as to incentivize behavioural changes that will reduce such emissions.  
[82] The third Westbank factor actual or properly estimated costs of the regulation has no  
application to Part 1. The levy that Part 1 imposes is not designed or intended to raise funds to  
defray the costs of regulation. Rather, Part 1 is an example of a scheme where the charge itself is  
the means of advancing a regulatory purpose.  
[83] This brings the analysis to the fourth Westbank factor, the relationship between the  
regulation and the person being regulated. This too is a somewhat uninstructive inquiry in  
situations where, as here, the charge itself is the instrument by which the regulatory purpose is  
realized. In such circumstances, the person being regulated will necessarily have a connection  
with the regulation by virtue of paying the charge.  
[84] In summary, therefore, the Westbank factors indicate that the charges imposed pursuant  
to Part 1 are part and parcel of a regulatory regime.  
[85] In addition to the specific matters identified in Westbank, there are two further, and  
important, considerations that suggest the charges imposed under Part 1 are not taxes. The first is  
that the Minister of National Revenue must distribute the amount raised by the charges to the  
Page 24  
province, or persons in the province, from which that amount was raised. Subsection 165(2) of  
the Act says this:  
(2) For each province or area that is or was a listed province, the Minister must distribute  
the net amount for a period fixed by the Minister, if positive, in respect of the province or  
area. The Minister may distribute that net amount  
(a) to the province;  
(b) to persons that are prescribed persons, persons of a prescribed class or  
persons meeting prescribed conditions; or  
(c) to a combination of the persons referred to in paragraphs (a) and (b).  
“Net amount” in s. 165(2) means the charges levied in a province or area less any amounts  
refunded, rebated or remitted in respect of those charges (s 165(1)). On the face of the Act,  
therefore, it would appear that the whole of the funds collected by virtue of the fuel charge must  
be distributed by the Minister.  
[86] Saskatchewan suggests this feature of the Act is of little significance because, it submits,  
tax revenues are also returned to the public. This happens through various payments and grants,  
through the provision of programs and services, and through the construction of public works.  
This, of course, is broadly true. Governments do not typically hoard their tax revenues. But, there  
is a difference between regular tax revenues and monies raised pursuant to the Act. A dollar  
taken in by way of taxes can be used by the Government of Canada for any purpose in any part  
of the country or, indeed, the world. By contrast, monies raised under the Act must be returned to  
the listed province, persons in that province, or a combination of both. Fuel charge and  
combustible waste revenues raised in Saskatchewan could not be employed by the federal  
government, and at the discretion of the Governor in Council, to build a bridge or to offset the  
federal government’s cost of making old age security payments. Rather, they must be returned,  
in the form of cash so to speak, to the province or prescribed persons in the province. This in  
itself is perhaps not wholly determinative of the status of the charge imposed by the Act.  
However, it certainly does serve to distinguish the charges from what would typically be seen as  
a tax.  
[87] The second broad consideration here is equally important. It is this. The Act could fully  
accomplish its objectives, i.e., the establishment of minimum national standards of price  
stringency for GHG emissions, without raising a cent. In other words, if every province put in  
Page 25  
place a level of GHG pricing acceptable to the Governor in Council, the Act would not be  
brought into operation anywhere in the country and, as a result, it would generate no revenue.  
This tells the tale. A taxing statute is one that, in pith and substance, is designed and intended to  
raise revenue for general purposes. See: Re Exported Natural Gas Tax at 1070; Westbank at  
para 30. It is difficult to see how the Act, which is ultimately wholly disinterested in generating  
revenue, can nonetheless be seen as a law with a primary purpose of raising revenue for general  
purposes.  
[88] To repeat, the central task of a court attempting to identify the pith and substance of a  
charge is to determine whether the primary purpose of that charge is “to tax, i.e., to raise revenue  
for general purposes” or “to finance or constitute a regulatory scheme” or “to charge for services  
directly rendered”. In the circumstances here, the primary purpose of the Part 1 fuel charge is not  
to raise revenue for general purposes. Rather, the fuel charge is the centrepiece of a regulatory  
plan to increase the cost of GHG emissions and thereby mitigate them.  
[89] In the end, and considering all of the relevant aspects of this issue, it must be concluded  
that Part 1 of the Act does not impose a tax in the constitutional sense of the term.  
3.  
Does Part 2 impose a tax or a regulatory charge?  
[90] The charge payable under Part 2 is prescribed by s. 174 of the Act. A person responsible  
for a covered facility that emits GHGs in a quantity exceeding the applicable emissions limit  
must provide compensation to the Minister. As noted earlier, s. 174(2) stipulates this may be  
done either by the remittance of compliance units earned from emitting fewer GHGs than the  
prescribed limit in the past, by paying an excess emissions charge, or by a combination of both.  
The amount of the charge is specified in column 2 of Schedule 4. It is set at the same level as the  
fuel charge in Part 1 of the Act, i.e., $10 per tonne of CO2 equivalent in 2018, increasing by  
$10 per year until it reaches $50 per tonne in 2022.  
[91] With this brief background in place, it is appropriate to turn to the Westbank analysis. As  
for the first Westbank factor, the excess emissions charge is obviously part and parcel of a  
detailed code of regulation. Part 2 establishes the output-based performance standards for GHG  
emissions by large industrial facilities. In this regard, it specifies such things as registration  
requirements and GHG reporting obligations and goes on to require covered facilities to measure  
 
Page 26  
their emissions output against a GHG limit. The excess emissions charge fits closely into this  
overall scheme given that it stands as one way in which a person may provide the required  
compensation for exceeding an emissions limit.  
[92] The second Westbank factor asks whether there is a specific regulatory purpose aimed at  
affecting behaviour. Again, this is beyond dispute. Part 2 aims to affect the behaviour of large  
emitters by imposing economic incentives for them to limit and reduce GHG emissions.  
[93] The third Westbank factor concerns actual or properly estimated costs of the regulation.  
As is the case with the Part 1 fuel charge, this factor has no application to the obligation to pay  
compensation under Part 2. It is not intended to raise funds to defray the costs of regulation.  
Instead, the excess emissions charge itself, because it increases the cost of GHG emissions, is the  
means of advancing the regulatory purpose.  
[94] As for the fourth Westbank factor, I repeat my earlier comment made in connection with  
Part 1. This factor engages awkwardly when the charge in issue is itself the regulatory tool.  
Nonetheless, there is an undeniable connection here between those persons being regulated,  
i.e., those persons required to pay excess emissions charges, and the regulation. It exists by virtue  
of the payments themselves. There is also a connection, perhaps more in the sense of what is  
contemplated in Westbank, because the operations of large industrial facilities “cause the need  
for the regulation”.  
[95] In light of all of this, the Westbank analysis points clearly to a conclusion that  
compensation collected pursuant to Part 2 of the Act is tightly integrated into a regulatory  
scheme.  
[96] Moreover, just as with the fuel and combustible waste charges under Part 1, it is  
important to note that the excess emissions charge is not intended to raise revenues for general  
purposes. Rather, by virtue of s. 188 of the Act, the Minister of National Revenue must distribute  
such revenues either to the province where the covered facility is located, or to persons in that  
province, or to a combination of both. Further, the objective of Part 2 can be realized without the  
Minister of National Revenue collecting any funds by way of the charge if provinces implement  
adequate regimes of their own. In other words, if provinces were to put sufficiently rigorous  
Page 27  
emission standards in place, Part 2 would not come into operation. In any event, even when  
Part 2 does apply, the operator of a facility can pay any required compensation to the Minister by  
way of credits, not cash. And, if all covered facilities stay below their prescribed emissions  
limits, no compensation of any sort is payable. This is not the statutory profile of a tax, i.e., of a  
levy that has a primary purpose of raising revenue for general purposes.  
[97] Taking all of the relevant factors into account, it is evident that the excess emissions  
charge imposed under Part 2 of the Act is not a tax.  
4.  
If Part 1 or 2 does impose a tax, is s. 53 of the Constitution Act, 1867  
offended?  
[98] In light of the conclusion that the Act does not impose taxes, it is not strictly necessary to  
consider the arguments based on s. 53 of the Constitution Act, 1867. However, in the interest of  
completeness, I will deal with the impact of s. 53 should the Act be seen as imposing a tax.  
[99] As noted above, s. 53 requires that bills “for imposing any Tax or Impost” must originate  
in the House of Commons. In interpreting s. 53, the Supreme Court has focussed on its root  
constitutional purpose. Thus, in 620 Connaught Ltd. v Canada (Attorney General), 2008 SCC 7  
at para 4, [2008] 1 SCR 131 [Connaught], the Court indicated that s. 53 gives effect to the basic  
democratic principle that the Crown may levy taxes only with the consent of elected  
representatives. Justice Major explained this as follows in Eurig Estate:  
30  
In my view, the rationale underlying s. 53 is somewhat broader. The provision  
codifies the principle of no taxation without representation, by requiring any bill that  
imposes a tax to originate with the legislature. My interpretation of s. 53 does not prohibit  
Parliament or the legislatures from vesting any control over the details and mechanism of  
taxation in statutory delegates such as the Lieutenant Governor in Council. Rather, it  
prohibits not only the Senate, but also any other body other than the directly elected  
legislature, from imposing a tax on its own accord.  
31  
In our system of responsible government, the Lieutenant Governor in Council  
cannot impose a new tax ab initio without the authorization of the legislature. As  
Audette J. succinctly stated in The King v. National Fish Co., [1931] Ex. C.R. 75, at p.  
83, “[t]he Governor in Council has no power, proprio vigore, to impose taxes unless  
under authority specifically delegated to it by Statute. The power of taxation is  
exclusively in Parliament.”  
32  
The basic purpose of s. 53 is to constitutionalize the principle that taxation  
powers cannot arise incidentally in delegated legislation. In so doing, it ensures  
parliamentary control over, and accountability for, taxation. As E. A. Driedger stated in  
“Money Bills and the Senate” (1968), 3 Ottawa L. Rev. 25, at p. 41:  
 
Page 28  
Through the centuries, the principle was maintained that taxation  
required representation and consent. The only body in Canada that meets  
this test is the Commons. The elected representatives of the people sit in  
the Commons, and not in the Senate, and, consistently with history and  
tradition, they may well insist that they alone have the right to decide to  
the last cent what money is to be granted and what taxes are to be  
imposed.  
(Emphasis added)  
As stated in Ontario English Catholic Teachers’ Assn. v Ontario (Attorney General), 2001 SCC  
15 at para 74, [2001] 1 SCR 470, “[t]he animating principle [of s. 53] is that only the legislature  
can impose a new tax ab initio”.  
[100] Saskatchewan does not challenge Parliament’s legislative authority to enact the Act under  
its s. 91(3) taxation power. Indeed, it takes the initiative in arguing that the levies imposed by the  
Act fall under s. 91(3). Saskatchewan’s real point lays one step down the road from this  
characterization of the Act. It takes issue with the authority of the Governor in Council to  
determine the provinces and areas to which the Act will apply. This authority is said to make the  
Act non-compliant with s. 53.  
[101] The relevant sections of the Act concerning the Part 1 fuel charge, ss. 166(2) and (3), read  
as follows:  
(2) For the purpose of ensuring that the pricing of greenhouse gas emissions is applied  
broadly in Canada at levels that the Governor in Council considers appropriate, the  
Governor in Council may, by regulation, amend Part 1 of Schedule 1, including by  
adding, deleting, varying or replacing any item or table.  
(3) In making a regulation under subsection (2), the Governor in Council shall take into  
account, as the primary factor, the stringency of provincial pricing mechanisms for  
greenhouse gas emissions.  
Subsections 189(1) and (2) use the same language in conferring an authority on the Governor in  
Council to decide the provinces and areas where Part 2 of the Act will apply.  
[102] Saskatchewan’s submissions on the s. 53 issue are not persuasive. The situation  
concerning the Governor in Council’s authority to determine where the Act will apply is readily  
distinguishable from the one considered in Eurig Estate, the key authority invoked by  
Saskatchewan on this wing of its argument. In Eurig Estate, the Administration of Justice Act  
authorized the Lieutenant Governor in Council to make regulations requiring the payment of  
Page 29  
“fees” in respect of anything done by any person in the administration of justice. In purported  
reliance on this authority, the Lieutenant Governor in Council put in place a regulation setting  
out a schedule of ad valorem charges that had to be paid in order to obtain a grant of probate.  
The majority of the Supreme Court found the probate charge to be a tax, not a fee, because (a) it  
was enforceable by law, (b) it was levied by a public body, (c) it was intended for public  
purposes, and (d) there was no connection between the amount of the levy and the cost of the  
service of granting letters probate. Justice Major then went on to find the probate levy to be non-  
compliant with s. 53, and hence unconstitutional, because it sought to impose a tax “without  
clear and unambiguous authorization from the legislature to do so” (at para 41).  
[103] This is not the situation with respect to the Act. Subsections 166(2) and 189(1) expressly  
provide that the Governor in Council may amend Schedule 1 and, in so doing, make Parts 1 and  
2 of the Act applicable to a province or area. Indeed, those provisions are the centerpiece of the  
backstop feature of the Act. In other words, while placing a measure of discretion in the hands of  
the Governor in Council, the Act leaves no doubt that the Governor in Council is authorized to  
exercise that discretion and to decide if Part 1 or Part 2 should operate in respect of any given  
province or area. In making a decision in this regard, the Governor in Council does not impose a  
tax “on its own accord”, to use the words of Major J. in Eurig Estate.  
[104] Nor is this a circumstance where, to reference paragraph 32 of Eurig Estate, taxation  
powers are claimed to arise “incidentally in delegated legislation”. The Governor in Council is  
specifically authorized, in the Act itself, to amend Schedule 1 and thereby extend the application  
of the Act. Read in context, this is a clear and unambiguous authorization to adjust the reach of  
the Act and to impose the obligation to pay the levies in issue. As a consequence, this situation is  
also different than the one considered in Confédération. In that case, the Supreme Court found  
charges collected under certain provisions of the Employment Insurance Act to be  
unconstitutional because, in the absence of a clear delegation of taxing authority from  
Parliament, the Governor in Council had used those provisions to collect funds for general  
purposes.  
[105] The breadth of the discretion conferred by the Act on the Governor in Council to  
determine where the Act should apply was referred to by Saskatchewan in its submissions but not  
Page 30  
raised as a distinct issue. In any event, I am not persuaded that this aspect of the scope of the  
Governor in Council’s authority is constitutionally problematic. Its discretion in this regard is  
confined in three ways and is far from open ended. First, ss. 166(2) and 189(1) provide that the  
Governor in Council may only add or delete a province or area from Schedule 1 “[f]or the  
purpose of ensuring that the pricing of greenhouse gas emissions is applied broadly in Canada at  
levels that [it] considers appropriate”. Second, ss. 166(3) and 189(2) provide that, in exercising  
this authority, the Governor in Council must take into account “as the primary factor” the  
stringency of provincial pricing mechanisms for GHG emissions. Third, and more generally,  
basic administrative law principles preclude the Governor in Council from making decisions  
about the application of the Act to provinces or areas if those decisions are based on irrelevant  
considerations or reasons at odds with the purpose of the Act. See: Katz Group Canada Inc. v  
Ontario (Health and Long-Term Care), 2013 SCC 64 at para 24, [2013] 3 SCR 810.  
[106] Another possible dimension of the s. 53 issue involves the suggestion that the delegation  
of authority to the Governor in Council in relation to the particulars of the Part 1 fuel charge is so  
wide that, while express, it nonetheless offends s. 53. The point, as I understand it, is that the  
very generous authority enjoyed by the Governor in Council under Part 1 would allow it, in  
effect, to cut a new tax out of whole cloth. The key sections of the Act underpinning this concern  
are ss. 26, 166 and 168. They are reproduced in Appendix A.  
[107] The response to these concerns has several layers. First, the governing case law indicates  
that, so long as a taxing authority is delegated expressly and unambiguously, it may be exercised  
to establish the “details and mechanisms” of the tax. See: Confédération at para 92; Eurig Estate  
at para 30. Although they are broadly worded, the sections of the Act in issue here would seem to  
be aimed at enabling the Governor in Council to do this very thing: to work out and establish  
some of the details and mechanisms of the fuel charge scheme that are not addressed by the Act  
itself.  
[108] Second, and more fundamentally, if regulations made pursuant to the provisions noted  
above did, in fact, attempt to implement a wholly or substantially new tax, then the obvious legal  
response would be to strike down those regulations because they offend s. 53 of the Constitution  
Act, 1867 or because they are ultra vires the Act in administrative law terms. The invalidity of  
Page 31  
the regulations would not impact the constitutionality of the Act just as (a) in Connaught, where  
the validity of the business licence fees imposed under s. 24 of the Parks Canada Agency Act  
was not seen as affecting the validity of s. 24 itself, and (b) in Eurig Estate, where the validity of  
the probate fee imposed under s. 5 of the Administration of Justice Act was not considered to  
impugn the validity of s. 5.  
[109] Third, I note that, even assuming arguendo that there is a problem with the constitutional  
validity of the sections of the Act conferring wide regulation-making authority on the Governor  
in Council, this would seem to be a circumstance where the doctrine of severance could be  
engaged or the offending wording would be read down so as to avoid constitutional problems. In  
other words, any problems with these provisions could be addressed while leaving the fuel  
charge and combustible waste regime under Part 1 intact.  
[110] In summary, therefore, it is not apparent how the authority granted to the Governor in  
Council by virtue of ss. 26, 166 and 168 can render the Act, or more particularly Part 1 of the  
Act, unconstitutional.  
[111] In the end, Saskatchewan’s argument about the application of s. 53 of the Constitution  
Act, 1867 cannot succeed. The charges in issue here are not taxes in the constitutional sense of  
that term. However, if the charges are characterized as taxes, they do not violate s. 53. This is not  
a case where the levies in question are imposed ab initio by the Governor in Council or imposed  
by the Governor in Council of its own accord.  
C.  
Is the Act sustainable under the national concern branch of POGG?  
[112] Saskatchewan contends that, if the Act is not an invalid tax, it is nonetheless  
unconstitutional because it must be seen as concerning property and civil rights or other matters  
within exclusive provincial jurisdiction. Canada’s argument in reply, and its key position in these  
proceedings, is that the Act is a valid exercise of Parliament’s authority under the national  
concern branch of POGG. Canada is supported in this position by several intervenors.  
[113] In order to address these arguments, it will be useful to begin by confirming the basic  
principles informing the POGG analysis. That done, I will consider the pith and substance of the  
 
Page 32  
Act and then turn to the identification of the matter said to come within Parliament’s POGG  
authority. All of this done, it will be possible to make a final determination about whether the Act  
can be sustained under the national concern branch of POGG.  
1.  
Basic principles  
[114] Section 91 of the Constitution Act, 1867 gives Parliament the power:  
… to make laws for the Peace, Order and good Government of Canada, in relation to all  
Matters not coming within the Classes of Subjects by this Act assigned exclusively to the  
Legislatures of the Provinces …  
The POGG power is usually considered to have three branches: the “gap” branch, the “national  
concern” branch and the “emergency” branch. See: Peter W. Hogg, Constitutional Law of  
Canada, loose-leaf (2018-Rel 1) 5th ed Supp, vol 1 (Toronto: Thomson Reuters, 2016) at c 17.1.  
[115] The national concern branch has a deep history running back to Russell. Its contours  
began to clearly emerge when Lord Watson wrote as follows at page 361 of Attorney-General  
for Ontario v Attorney-General for the Dominion, [1896] AC 348 (PC):  
Their lordships do not doubt that some matters, in their origin local and provincial,  
might attain such dimensions as to affect the body politic of the Dominion, and to justify  
the Canadian Parliament in passing laws for their regulation or abolition in the interest of  
the Dominion. But great caution must be observed in distinguishing between that which  
is local and provincial, and therefore within the jurisdiction of the provincial legislatures,  
and that which has ceased to be merely local or provincial, and has become matter of  
national concern, in such sense as to bring it within the jurisdiction of the Parliament of  
Canada. …  
[116] For present purposes, it is sufficient to pick up the jurisprudential story with Re: Anti-  
Inflation Act, [1976] 2 SCR 373. A majority of the Supreme Court upheld that Act on the basis  
of the emergency doctrine of POGG. Justice Beetz disagreed on the point and therefore went on  
to consider the national concern doctrine. He wrote for himself and de Grandpré J. but his  
analysis was endorsed by a majority of the Court. Justice Beetz concluded that “containment and  
reduction of inflation” did not qualify as a basis of federal jurisdiction because it was totally  
lacking in specificity and was no more than an aggregate of several subjects, some of which  
formed a substantial part of provincial jurisdiction (at 458). He suggested a subject needed to  
have a “degree of unity that made it indivisible, an identity which made it distinct from  
provincial matters and a sufficient consistence to retain the bounds of form” (at 458). In addition,  
Beetz J. stressed that, in considering the national concern doctrine, it was necessary to have  
 
Page 33  
regard to the extent to which a new power would allow Parliament to touch on what had been  
recognized to be provincial jurisdiction and thus upset the equilibrium of the Constitution  
(at 458).  
[117] R v Crown Zellerbach Canada Ltd., [1988] 1 SCR 401 [Crown Zellerbach], is now the  
leading case in this area. Justice Le Dain, writing for the majority of the Court, surveyed the  
relevant jurisprudence and, drawing significantly on what Beetz J. had said in Re: Anti-Inflation  
Act, summarized the law as follows at pages 431432:  
1. The national concern doctrine is separate and distinct from the national emergency  
doctrine of the peace, order and good government power, which is chiefly  
distinguishable by the fact that it provides a constitutional basis for what is necessarily  
legislation of a temporary nature;  
2. The national concern doctrine applies to both new matters which did not exist at  
Confederation and to matters which, although originally matters of a local or private  
nature in a province, have since, in the absence of national emergency, become  
matters of national concern;  
3. For a matter to qualify as a matter of national concern in either sense it must have a  
singleness, distinctiveness and indivisibility that clearly distinguishes it from matters  
of provincial concern and a scale of impact on provincial jurisdiction that is  
reconcilable with the fundamental distribution of legislative power under the  
Constitution;  
4. In determining whether a matter has attained the required degree of singleness,  
distinctiveness and indivisibility that clearly distinguishes it from matters of  
provincial concern it is relevant to consider what would be the effect on  
extra-provincial interests of a provincial failure to deal effectively with the control or  
regulation of the intra-provincial aspects of the matter.  
These are the principles that must inform the analysis of Canada’s argument about the national  
concern branch of POGG.  
2.  
The pith and substance of the Act  
[118] Consideration of whether the Act can be sustained under the national concern branch  
begins with the identification of its pith and substance. This, of course, is the first step in any  
division of powers inquiry. It is not linked specifically to POGG or the national concern  
question. As explained above, both the purpose and effect of the Act are relevant in determining  
its pith and substance. Let me begin with the question of purpose.  
[119] In very general terms, the Act is self-evidently aimed at GHG pricing. This is revealed by  
several considerations. The first is the broad context in which it was enacted. That context can be  
 
Page 34  
traced directly back to the Framework Convention ratified by Canada in 1992 and the Kyoto  
Protocol, the Copenhagen Accord and the Paris Agreement, which followed. All had the same  
central objective, i.e., the limitation of global GHG emissions. The Act is the product of  
Canada’s efforts to meet its commitments under the Paris Agreement.  
[120] All of this noted, the relevant legislative history also reveals, in more particular terms,  
that the purpose of the Act is to ensure minimum national standards of price stringency for GHG  
emissions. This is apparent from (a) the Vancouver Declaration, which referenced the use of  
carbon pricing mechanisms to address climate change and established a Working Group on  
Carbon Pricing Mechanisms, (b) the Final Report of the Working Group, (c) the federal  
government’s Pan-Canadian Approach to Pricing Carbon Pollution that concluded economy-  
wide carbon pricing was the most efficient way to reduce GHG emissions and proposed a pan-  
Canadian benchmark approach, and (d) the federal government’s Technical Paper on the  
backstop and its related Supplemental Benchmark Guidance paper.  
[121] This focus on pan-Canadian GHG pricing is also apparent in the preamble of the Act. It  
expressly links the Act to the impact of anthropogenic GHG emissions on climate change, the  
Framework Convention and Canada’s commitments under the Paris Agreement. The preamble  
then goes on to provide as follows:  
Whereas greenhouse gas emissions pricing is a core element of the Pan-Canadian  
Framework on Clean Growth and Climate Change;  
Whereas behavioural change that leads to increased energy efficiency, to the use of  
cleaner energy, to the adoption of cleaner technologies and practices and to innovation is  
necessary for effective action against climate change;  
Whereas the pricing of greenhouse gas emissions on a basis that increases over time is an  
appropriate and efficient way to create incentives for that behavioural change;  
Whereas greenhouse gas emissions pricing reflects the “polluter paysprinciple;  
Whereas some provinces are developing or have implemented greenhouse gas emissions  
pricing systems;  
Whereas the absence of greenhouse gas emissions pricing in some provinces and a lack  
of stringency in some provincial greenhouse gas emissions pricing systems could  
contribute to significant deleterious effects on the environment, including its biological  
diversity, on human health and safety and on economic prosperity;  
And whereas it is necessary to create a federal greenhouse gas emissions pricing scheme  
to ensure that, taking provincial greenhouse gas emissions pricing systems into account,  
greenhouse gas emissions pricing applies broadly in Canada[.]  
(Emphasis added)  
Page 35  
[122] The substantive provisions of the Act, in both Part 1 and Part 2, reflect this goal or  
purpose of establishing minimum national standards of price stringency for GHG emissions.  
They do not dictate specific maximum levels of GHG reductions either generally or by reference  
to particular classes of individuals or operations. Nor do they directly impose a GHG emissions  
price across the country. Rather, the Act serves only as a backstop in the sense that it defers to  
the regulatory efforts of the provinces and comes into play only when those efforts do not meet  
minimum standards.  
[123] Of course, when Part 1 or Part 2 applies in a province or area, it does not dictate a GHG  
emission price and then impose that price inflexibly or blindly across the board to each and every  
emission source. Part 1, for example, exempts fuel used by farmers and fishers from the fuel  
charge and it makes special provision for fuel charges payable by interjurisdictional  
transportation undertakings. These sorts of qualifications and nuances in the application of a  
minimum price do not undermine the pith and substance of the Act. This is because a GHG  
pricing system must be able to accommodate the underlying economic and other realities of the  
circumstances in which it operates. Accordingly, all things considered, it is appropriate to  
describe the purpose of the Act as a whole as being the establishment of minimum national  
standards of price stringency for GHG emissions.  
[124] Not surprisingly, the effect of the Act is consistent with this purpose. As explained  
earlier, Part 1 imposes a charge on GHG-producing fuels and Part 2, in effect, puts a price on the  
GHG emissions above prescribed levels for large industrial operations. Both Parts apply only in  
those provinces that, in the assessment of the Governor in Council, have failed to put acceptable  
pricing standards in place.  
[125] Thus, to conclude and confirm on this point, the pith and substance of the Act is best seen  
as being the establishment of minimum national standards of price stringency for GHG  
emissions.  
3.  
The POGG “matter” in issue  
[126] It is now necessary to turn to the POGG issue itself and, to begin, the question of how to  
describe or characterize the matter said to fall within the national concern branch. However,  
before doing that, let me detour briefly to underline the significance of finding a subject matter to  
 
Page 36  
be one coming within the national concern branch of POGG. The point is basic. Any such  
conclusion means the matter in question comes within the authority of Parliament and Parliament  
alone. As La Forest J. explained at paragraph 115 of Hydro-Québec, “[d]etermining that a  
particular subject matter is a matter of national concern involves the consequence that the matter  
falls within the exclusive and paramount power of Parliament”. See also: Re: Anti-Inflation Act  
at 444. This means that invoking the national concern branch of POGG is necessarily a delicate  
business. It carries with it the real potential of significantly altering the way powers are allocated  
between Parliament and the provincial legislatures and, hence, of altering the balance of  
federalism itself.  
[127] In its factum, Canada took the position that the matter of national concern in issue here is  
“GHG emissions”. To quote from paragraph 87 of the factum, “GHG emissions are a  
quintessential matter of national concern”. Saskatchewan and several intervenors reacted to this  
by pointing out that recognizing a general Parliamentary authority over GHG emissions would  
open the door to federal regulation of an extraordinarily broad swath of life, upset the  
constitutional balance and thereby be offside the test prescribed in Crown Zellerbach. This was  
said to be so because almost every kind of human action generates GHG emissions.  
[128] The significance of Saskatchewan’s argument was not that recognizing GHG emissions  
as a matter of federal authority would give Parliament comprehensive jurisdiction over every  
GHG-producing activity. Rather, it was that the production of GHGs is so intimately and broadly  
embedded in every aspect of intra-provincial life that a general authority in relation to GHG  
emissions would allow Parliament’s legislative reach to extend very substantially into  
traditionally provincial affairs. A general legislative authority over GHG emissions would, for  
example, presumably include such things as (a) the specification of materials and production  
techniques used in manufacturing and processing, (b) the control of any variable affecting the  
fuel efficiency of vehicles including tire pressure, engine size and speed limits on highways,  
(c) the determination of construction and insulation standards for buildings of all sorts, (d) the  
content of livestock feeds and the size of livestock operations, and (e) the prescription of matters  
affecting electricity consumption such as the hours of operation of business and service  
providers. Given the absolutely pervasive nature of GHG emissions, the boundaries of possible  
regulation in respect of such emissions are limited only by the imagination.  
Page 37  
[129] The other side of the jurisdictional coin is also important here. Because any  
Parliamentary authority over GHG emissions would be exclusive, recognizing such authority  
would foreclose provinces from legislating directly in relation to such emissions. Canada and  
some of the intervenors attempt to discount this concern by pointing to the double aspect  
doctrine. They contend its application would prevent provinces from being frozen out of the field  
of GHG regulation should Canada succeed in having GHG emissions brought under the national  
concern branch of POGG. This view is substantially misplaced.  
[130] As Peter Hogg explains in Constitutional Law of Canada at chapter 5.1(g), the double  
aspect doctrine applies when the federal and provincial characteristics of a law are roughly equal  
in importance with the result that both Parliament and a provincial legislature may enact laws of  
that kind. The classic example is highway safety where provincial laws on the subject have been  
upheld as being in relation to “Property and Civil Rights in the Province” (s 92(13)) and federal  
laws have been upheld as being in relation to “Criminal Law” (s 91(27)). At present, when GHG  
emissions are not recognized as being a matter coming within exclusive federal jurisdiction,  
there is plenty of scope for the double aspect doctrine to operate. A province can regulate GHG  
emissions by enacting laws in relation to property and civil rights, for example, and Parliament  
can regulate GHG emissions by, for instance, passing laws in relation to taxation. But, if GHG  
emissions are recognized as a matter of exclusive federal jurisdiction, any provincial law would  
be unconstitutional if, in pith and substance, it was in relation to such emissions.  
[131] In other words, the problem is not only that recognizing federal jurisdiction over  
something as broad as GHG emissions would give Parliament wide authority in positive terms. It  
is that, in negative terms, provincial legislatures would be significantly denied the authority to  
deal with GHG emissions. Provinces could address such emissions only to the extent laws  
enacted in relation to provincial matters such as property and civil rights had an incidental  
impact on them. As the Supreme Court observed in Reference re Securities Act, 2011 SCC 66 at  
para 66, [2011] 3 SCR 837, the double aspect doctrine, allows for the concurrent application of  
both federal and provincial legislation, but it does not create concurrent jurisdiction over a  
matter (in the way, for example, s. 95 of the Constitution Act, 1867 does for agriculture and  
immigration)(emphasis in original).  
Page 38  
[132] It is true of course that, in recent years, the Supreme Court’s jurisprudence has promoted  
a flexible federalism tending to allow for interplay and even overlap between federal and  
provincial powers. But, the doctrinal tools used to promote flexible federalism have limits. They  
cannot “sweep designated powers out to sea”. See: Reference re Securities Act at para 62.  
[133] Let me return now to the main track of the analysis and the question of the  
characterization of the POGG matter at issue in these proceedings. There is a great deal of merit  
in the concerns raised by Saskatchewan and its supporting intervenors as to the impact that  
bringing “GHG emissions” under the national concern branch would have on the balance of  
federalism. Put simply, an unqualified jurisdiction in relation to such emissions would lead  
Parliament deeply into areas of historically exclusive provincial authority.  
[134] In oral argument, Canada reacted to these concerns by changing its position and asserting  
that the matter to be included under Parliament’s POGG authority should not be “GHG  
emissions” but rather “the cumulative dimensions of GHG emissions”. Perhaps because it was  
introduced so late in the day, the “cumulative dimensions” idea was not well developed. Canada  
referred to cumulative atmospheric concentrations, cumulative global and national impacts and  
the cumulative effect of emissions from each province but did not fully explain these notions.  
Nonetheless, Canada’s submission did, in its own way, represent an effort to avoid what all of  
the participants in these proceedings appeared to see as undesirable: a result that would restrict or  
preclude provincial efforts to address GHG emissions and GHG pricing.  
[135] The “cumulative dimensions” concept advanced by Canada appears to carry with it  
something of the approach developed by the Supreme Court in connection with the regulation of  
the securities industry. That approach endorsed the notion of “systemic risk” as a tool for  
distinguishing, in the trade and commerce context, between matters that are national in scope and  
those that are local or intra-provincial. See: Reference re Securities Act; Reference re Pan-  
Canadian Securities Regulation.  
[136] On the face of things, this idea has some attraction. But, a substantial difficulty lies just  
below the surface. There is no practical or operational break point between individual GHG  
emissions and cumulative GHG emissions. The reality is that the latter is no more than the direct  
and simple sum of the former. Regulating cumulative emissions is only possible through the  
Page 39  
regulation of specific or individual emissions. Thus, recognizing federal authority over “the  
cumulative dimensions of GHG emissions”, if that authority is to be meaningful, amounts to the  
same thing as recognizing Parliamentary authority over “GHG emissions” in the general sense.  
[137] In the result, therefore, there is no difference of consequence between jurisdiction over  
“GHG emissions” and jurisdiction over “the cumulative dimensions of GHG emissions”.  
[138] Where does this lead? All things considered, it is not possible to conclude “GHG  
emissions” or, as Canada puts it in oral argument, “the cumulative dimensions of GHG  
emissions” fall within federal jurisdiction by virtue of the national concern doctrine. Even  
assuming a matter framed in this way has the sort of singleness, distinctiveness and indivisibility  
demanded by the Crown Zellerbach test, the fundamental distribution of legislative power under  
the Constitution Act, 1867 would be upset if it were allocated to Parliament. As a result, this  
approach to federal jurisdiction in respect of GHG emissions does not survive the second part of  
the test prescribed by Crown Zellerbach. It follows that the POGG argument advanced by  
Canada cannot succeed.  
[139] But, this does not end the inquiry. There is an alternative way to characterize the subject  
matter said to come under the national concern branch. As the Attorney General of British  
Columbia [British Columbia] suggests, it can also be seen as being in the nature of the  
establishment of minimum national standards of price stringency for GHG emissions”.  
“Stringency” in this context must be taken to embrace not just the charge per unit of GHG  
emission but also the scope or breadth of application of the charge in the sense of the sorts of  
fuels, operations and activities to which the charge applies. It must also include the authority to  
put in place such regulatory regimes as are necessary to operationalize a minimum pricing  
program and to make those regimes workable and appropriate in the economic and business  
environments where they apply. On that understanding of things, there is a good deal to  
recommend this approach.  
[140] It might be useful to begin, however, by acknowledging that framing federal jurisdiction  
in this way could appear, at first blush, to involve a rather tight or narrow formulation of the  
matter in question. This is because the reach of the national concern doctrine is often described  
in more generalized subject matter terms. The obvious examples are: aeronautics” (Johannesson  
Page 40  
v Rural Municipality of West St. Paul (1951), [1952] 1 SCR 292 [Johannesson]; “atomic energy”  
(Ontario Hydro v Ontario (Labour Relations Board), [1993] 3 SCR 327); and “marine pollution”  
(Crown Zellerbach). Seen from this angle, the establishment of minimum national standards of  
price stringency for GHG emissions” might seem to be a somewhat constricted characterization  
of a POGG subject matter. But, this ultimately does not detract meaningfully from the approach  
advanced by British Columbia.  
[141] First, identifying an area of jurisdiction by using terminology such as “the establishment  
of ...” is wholly consistent with the Constitution. There are several examples of this very thing in  
the enumeration of matters assigned to Parliament and the provincial legislatures by the  
Constitution Act, 1867: “The Establishment, Maintenance, and Management of Penitentiaries”  
(s 91(28)); “The Establishment, Maintenance, and Management of Public and Reformatory  
Prisons in and for the Province” (s 92(6)); and The Establishment, Maintenance, and  
Management of Hospitals, Asylums, Charities, and Eleemosynary Institutions in and for the  
Province, other than Marine Hospitals” (s 92(7)).  
[142] Second, although marine pollution, aeronautics and atomic energy might come to mind  
first when thinking about how to characterize matters falling within the scope of the national  
concern branch, not all matters coming within that branch have been described in that same style.  
In Munro v National Capital Commission, [1966] SCR 663 [Munro], the matter said to be of  
national concern was identified as follows at page 671:  
I find it difficult to suggest a subject matter of legislation which more clearly goes  
beyond local or provincial interests and is the concern of Canada as a whole than the  
development, conservation and improvement of the National Capital Region in  
accordance with a coherent plan in order that the nature and character of the seat of the  
Government of Canada may be in accordance with its national significance. Adopting the  
words of the learned trial judge, it is my view that the Act “deals with a single matter of  
national concern”.  
(Emphasis added)  
[143] Third, and more fundamentally, the real point is that the national concern doctrine is not  
designed to bring matters of some predetermined breadth under Parliamentary authority. Rather,  
it is concerned with matters which have, to use the words of Lord Watson, “attain[ed] such  
dimensions as to affect the body politic of the Dominion”. The challenge in the application of the  
national concern doctrine is to delimit its reach. In this regard, there is no constitutional logic in  
Page 41  
requiring all matters falling within its scope to have the same general complexion or breadth. If a  
narrowly definable matter is of national consequence and satisfies the Crown Zellerbach test, it  
should be no less eligible for inclusion under the national concern branch of POGG than broadly  
defined matters. Indeed, given the potentially disruptive impact of the national concern doctrine  
on the balance of federalism, there is much to recommend casting matters narrowly so long as  
that narrow cast still meets the Crown Zellerbach criteria and is not so confining as to preclude  
Parliament from having a meaningful or effective scope of authority.  
[144] Finally, it is important to remember what lies behind the legal issues before the Court.  
The record indicates climate change has emerged as a major threat, not just to Canada, but to the  
planet itself. As Viscount Sankey famously observed in Edwards v Attorney-General for Canada  
(1929), [1930] AC 124 (PC) at 136, the Constitution Act, 1867 is a living tree capable of growth  
and expansion within its natural limits” and, as La Forest J. noted in Hydro-Québec at paragraph  
86, “the Constitution must be interpreted in a manner that is fully responsive to emerging  
realities”. If it is necessary to apply established doctrine in a slightly different way to ensure both  
levels of government have the tools essential for dealing with something as pressing as climate  
change, that would seem to be entirely appropriate. It is also in keeping with what the Supreme  
Court has said about the utility of, where possible, allowing both Parliament and the provincial  
legislatures jurisdictional room to act in relation to the environment. See: Hydro-Québec at  
para 154. The choices of whether and how to use the tools available to Parliament or a legislature  
will, of course, be made by elected officials, not by judges.  
4.  
Application of the Crown Zellerbach test  
[145] Let me now deal, in more focussed terms, with the consideration of whether the  
establishment of minimum national standards of price stringency for GHG emissions can be  
sustained as a matter of federal jurisdiction under the national concern branch of POGG.  
[146] The broad starting point concerns whether this matter is something of genuine national  
importance. On this front, there was no suggestion in the submissions made to the Court that the  
general question of GHG emissions, and the related problem of climate change, are anything  
other than issues of superordinate consequence. In light of this, it is not necessary to rehearse all  
of the considerations serving to confirm the significance and impact of GHG emissions.  
 
Page 42  
[147] What then of the idea of minimum national standards of price stringency for GHG  
emissions? Significantly, the factual record before the Court indicates that GHG pricing is not  
just part and parcel of an effective response to climate change. It indicates that GHG pricing is  
regarded as an essential aspect or element of the global effort to limit GHG emissions. The  
following unchallenged features of the record are noteworthy in this regard:  
(a)  
There is widespread international consensus that carbon pricing is a necessary  
measure, though not a sufficient measure, to achieve the global reductions in  
GHG emissions necessary to meet the Paris Agreement targets” (Moffet affidavit  
at para 46).  
(b)  
A well-designed carbon price is an indispensable part of a strategy for reducing  
emissions in an efficient way” (High-Level Commission on Carbon Prices, Report  
of the High-Level Commission on Carbon Prices (Washington, DC: World Bank,  
2017) at 1).  
(c)  
(d)  
There is a widespread trend in favour of carbon pricing … Overall, 67  
jurisdictions are putting a price on carbon(Moffet affidavit at para 49).  
The existing literature is highly convergent in finding that carbon prices that  
have been implemented around the world have been successful in reducing  
greenhouse gas emissions(Nicholas Rivers affidavit affirmed October 5, 2018,  
at para 6(b)).  
[148] In light of this, it is difficult to suggest GHG emissions prices and the more specific  
question of minimum national standards of price stringency for GHG emissions are anything  
other than matters of sufficient consequence to warrant consideration for inclusion under the  
national concern branch of POGG.  
[149] With all of this by way of background or context, it is appropriate to turn now to the  
analysis expressly mandated by Crown Zellerbach. That analysis begins with the question of  
whether the establishment of minimum national standards of price stringency for GHG emissions  
has a singleness, distinctiveness and indivisibility that clearly distinguishes it from matters of  
provincial concern. This question can readily be answered in the affirmative.  
Page 43  
[150] The Framework Convention defines “greenhouse gases” as “those gaseous constituents of  
the atmosphere, both natural and anthropogenic, that absorb and re-emit infrared radiation”  
(Article 1 at para 5). In his affidavit, Mr. Moffet provides this additional explanation:  
31.  
Carbon dioxide, which has the molecular formula CO2, is the gas most  
commonly understood by the general public to be a GHG. However, scientists have  
identified other GHGs, which are mostly, but not always, carbon containing gases. The  
[Framework Convention] requires reporting on emissions of seven GHGs: CO2, methane  
(CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur  
hexafluoride (SF6), and nitrogen trifluoride (NF3).  
[151] Schedule 3 of the Act lists some 33 chemicals, more than the number referred to by  
Mr. Moffet, as being GHGs. However, there appears to be no disagreement about what is, or is  
not, a GHG. Certainly no such concerns were raised by any of the participants in these  
proceedings. In the result, it can be said that GHGs are a very particular type of environmental  
pollutant, a pollutant defined by a specific set of scientific or chemical characteristics. There is  
nothing in their nature that raises any concerns whatsoever about singleness, distinctiveness and  
indivisibility. They are readily identifiable and distinguishable from other gases.  
[152] Further, there are no apparent difficulties in drawing distinctions between the authority to  
establish minimum national standards of price stringency for GHG emissions and other aspects  
of the regulatory world that might be concerned with such emissions. The Act, as a manifestation  
of the POGG matter under consideration, illustrates the point. There was no suggestion by  
Saskatchewan or its supporting intervenors of any operational problem in identifying the  
boundaries that circumscribe the scope of application of the Act or of any murkiness or lack of  
clarity in how the Act intersects with provincial areas of responsibility. Simply put, this is not a  
situation of the sort that troubled La Forest J. in Crown Zellerbach when he argued against  
recognizing marine pollution as a matter of national concern because, in his view, there was no  
clear demarcation between salt and fresh water.  
[153] As part of the singleness, distinctiveness and indivisibility inquiry mandated by Crown  
Zellerbach, it is also relevant to consider, as Le Dain J. put it at page 432, “the effect on extra-  
provincial interests of a provincial failure to deal effectively with the control or regulation of the  
intra-provincial aspects of the matter. In the present context, that would be the effect on extra-  
provincial interests of a failure by individual provinces to adopt minimum prices for GHG  
emissions.  
Page 44  
[154] In general terms, the obvious reality is that GHG emissions do not respect provincial  
boundaries. As a result, the failure of one province to take action in respect of such emissions  
will have impacts on other provinces. In this broad sense, the situation with respect to GHG  
emissions parallels the situation with respect to (a) marine pollution as considered in Crown  
Zellerbach (where the failure of one province to protect its waters would lead to the pollution of  
the waters of other provinces), (b) the national capital region as dealt with in Munro (where the  
failure of cooperation between Ontario and Québec affected the country at large), and  
(c) aeronautics as considered in Johannesson (where the failure of a province to adopt  
standardized air traffic procedures and protocols would endanger the residents of other  
provinces). See: Hogg, Constitutional Law of Canada at c 17.3(b).  
[155] More particularly, it is self-evident that, in dealing with GHG pricing, each province may  
only legislate intra-provincially. This means every province, individually, is directly vulnerable  
in at least two ways to the failure of other provinces to adequately price such emissions. To  
begin, a province must deal with the climate change impact caused by the failure of other  
provinces to adequately address GHG emissions or emissions pricing. Of course, given the  
relative insignificance of any province’s emissions as compared to global emissions as a whole,  
this concern is perhaps more theoretical than real. A more concrete concern for an individual  
province is that the failure of other Canadian jurisdictions to adopt minimum GHG pricing could  
result in what is known as “carbon leakage”. This is a phenomenon where GHG pricing increases  
the cost of production, and thereby affects competitiveness, leading businesses to shift jobs or  
investments to lower GHG cost jurisdictions. The question of how this concern plays out in  
practical terms among provinces is not well developed in the record. However, a study by  
Canada’s Ecofiscal Commission in November of 2015 entitled Provincial Carbon Pricing and  
Competitiveness Pressures filed by British Columbia, and based on data analysis for four  
provinces, suggests these pressures are significant for only a few sectors.  
[156] All of this said, a good deal of the real significance of individual provincial failures to  
price GHG emissions to a minimum level plays out on a different plane. Climate change is a  
global problem and, accordingly, it calls for a global response. Such a response can only be  
effectively developed internationally by way of state-to-state negotiation and agreement. This, of  
course, is the story of the Framework Convention, the Kyoto Protocol, the Copenhagen Accord,  
Page 45  
and the Paris Agreement. In participating in these international processes, Canada is expected to  
make national commitments with respect to GHG reduction or mitigation targets. Those  
commitments are self-evidently difficult for Canada, as a country, to meet if not all provincial  
jurisdictions are prepared to implement GHG emissions pricing regimes regimes that, on the  
basis of the record before the Court, are an essential aspect of successful GHG mitigation plans.  
This is not to suggest Parliament must somehow enjoy a comprehensive treaty implementation  
power in relation to the GHG issue. But, it is to say that the international nature of the climate  
change problem necessarily colours and informs an assessment of the effects of a provincial  
failure to deal with GHG pricing.  
[157] It is true that the provinces, acting individually but cooperatively, could agree on a  
minimum national price for GHG emissions and thereby accomplish the same goal as the one  
sought by the Act. But this is not the point here. The point is that provinces could always  
withdraw from such arrangements and there is, accordingly, no assurance that coordinated  
provincial action would lead to a sustained approach to minimum GHG pricing. See: Reference  
re Securities Act at paras 120121.  
[158] Taking all of the foregoing into account, establishing minimum national standards of  
price stringency for GHG emissions can properly be seen as a matter that satisfies the Crown  
Zellerbach “singleness, distinctiveness and indivisibility” requirement.  
[159] The second consideration in the Crown Zellerbach analysis is whether recognizing  
federal authority over the establishment of minimum national standards of price stringency for  
GHG emissions would have a scale of impact on provincial jurisdiction that is reconcilable with  
the fundamental distribution of legislative power under the Constitution. This question too can be  
answered in the positive.  
[160] The scope of federal intrusion into the realm of provincial authority is the key distinction  
between a matter framed as being about minimum national pricing standards and one framed in  
terms of jurisdiction over GHG emissions generally or over the cumulative dimensions of such  
emissions. The authority to establish minimum national standards of price stringency does not  
empower Parliament to reach into areas of otherwise intra-provincial authority to regulate things  
like highway speeds and the content of livestock feeds simply because they have an impact on  
Page 46  
GHG emissions. Rather, the establishment of minimum national standards of price stringency is  
no more than just that. Once the relevant standards are established, individual consumers and  
businesses are free to choose how they will respond, or not, to the price signals sent by the  
marketplace.  
[161] Just as significantly, limiting federal jurisdiction to the matter of the establishment of  
minimum national standards of price stringency leaves plenty of room for provincial action in  
relation to GHG emissions. Unlike recognizing Parliamentary authority over GHG emissions  
generally or over the cumulative dimensions of GHG emissions, this approach does not put at  
risk the constitutional validity of provincial initiatives to price GHGs, either through carbon  
taxes or cap-and-trade systems.  
[162] It can be seen, therefore, that recognizing a federal authority to establish minimum  
national standards of price stringency for GHG emissions satisfies the Crown Zellerbach  
requirement that bringing a matter under the national concern doctrine must not have an impact  
on provincial jurisdiction that is irreconcilable with the fundamental distribution of legislative  
powers envisioned by the Constitution.  
[163] By way of a bottom line on this issue, the establishment of minimum national standards  
of price stringency for GHG emissions is a matter falling within federal jurisdiction by virtue of  
the national concern branch of POGG.  
5.  
The validity of the Act  
[164] Having worked through both the pith and substance of the Act and the scope of  
Parliament’s jurisdiction in relation to GHG pricing, it is now possible to determine the validity  
of the Act. As explained earlier, this involves an inquiry as to whether the pith and substance of  
the Act comes within a head of federal authority. The answer to that inquiry is self-evident in  
light of the foregoing analysis. The pith and substance of the Act is about establishing minimum  
national standards of price stringency for GHG emissions. Parliament has jurisdiction over this  
subject matter by virtue of the national concern branch of POGG. It follows that the Act is  
constitutionally valid. This, of course, is precisely the same kind of analysis that, for example,  
would lead a court to say, because the pith and substance of the Bank Act, SC 1991, c 46, is  
 
Page 47  
banking, and because Parliament has jurisdiction over “banking” by virtue of s. 91(15) of the  
Constitution Act, 1867, therefore the Bank Act is constitutionally valid.  
D.  
Can the Act be upheld under heads of jurisdiction identified by the  
intervenors?  
[165] Intervenors supporting the validity of the Act advance various grounds on which they  
suggest the Act, or features of it, can be found to be upheld. Canada does not make any of these  
arguments itself. However, perhaps not surprisingly, Canada advises that it would not object if  
the Court upheld the Act on one or more of these other grounds. With that, and in the interest of  
completeness, I turn to briefly consider these additional arguments.  
1.  
The general trade and commerce power  
[166] The intervenors Canadian Environmental Law Association and Environmental Defence  
Canada, Inc. submit that Part 2 of the Act falls within Parliament’s jurisdiction over trade and  
commerce as per s. 91(2) of the Constitution Act, 1867. The intervenor International Emissions  
Trading Association goes further to contend the Act as a whole can be sustained by the trade and  
commerce power.  
[167] Subsection 91(2) confers on Parliament the authority to make laws in relation to “[t]he  
Regulation of Trade and Commerce”. Despite this broad language, it is well settled that federal  
authority in relation to this subject is confined to (a) interprovincial and international trade and  
commerce, and (b) “general regulation of trade affecting the whole dominion”. See: Reference re  
Securities Act at para 75. The second branch of s. 91(2), what has become known as the  
“general” trade and commerce power, is at issue here.  
[168] In General Motors, the Supreme Court identified five non-determinative considerations  
to be taken into account when answering whether a subject matter comes within the general  
branch of s. 91(2):  
(a)  
(b)  
(c)  
Is the law a part of a general regulatory scheme?  
Is the scheme under the oversight of a regulatory agency?  
Is the law concerned with trade as a whole rather than with a particular industry?  
   
Page 48  
(d)  
(e)  
Is the scheme of such a nature that the provinces, acting alone or in concert,  
would be constitutionally incapable of enacting it?  
Would a failure to include one or more provinces or localities in the scheme  
jeopardize its successful operation in other parts of the country?  
[169] The Court explained in Reference re Securities Act that these considerations play into the  
division of powers analysis in the following way:  
[109] The General Motors indicia invite the Court to examine the legislative scheme  
through the lens of five interrelated inquiries to determine whether, viewed in its entirety,  
it addresses a matter of genuine national importance and scope that goes to trade as a  
whole in a way that is distinct from provincial concerns. The inquiry focuses on the  
nature of the proposed scheme and its purpose and effects, intended and actual. It is  
contextual, grounded in the record and the legislative facts. …  
[170] The intervenors who invoke the general trade and commerce power to sustain the Act  
submit that, seen in context, it satisfies the five General Motors indicia. As for the first indicium,  
it is contended that the Act as a whole sets out a general regulatory scheme directed at reducing  
GHG emissions. Second, it is argued that there is a general regulatory agency in the person of the  
Minister of the Environment and Climate Change who has ultimate responsibility for the Act.  
Third, the intervenors who rely on s. 91(2) argue that the Act is directed at trade as a whole  
because it does not target a particular industry and because it implements international  
commitments to reduce GHG emissions. As for the fourth General Motors indicium, it is argued  
that the provinces, acting on their own, would not be able to implement a national scheme of the  
sort found in the Act. Finally, and with respect to the fifth General Motors indicium, it is  
contended that the scheme of the Act would be jeopardized if one or more provinces were left  
outside of its reach.  
[171] There are some reasonably self-evident difficulties with several aspects of this argument  
but I find it unnecessary to examine them in detail. This is because the trade and commerce  
argument advanced by the intervenors cannot succeed for a very basic reason. The Act, in its pith  
and substance, does not concern trade and commerce. It concerns the mitigation of GHG  
emissions and, more specifically, the establishment of minimum national standards of price  
stringency for such emissions. In this regard, I take the same general view as did Lamer C.J.C.  
Page 49  
and Iacobucci J. in Hydro-Québec when they dismissed an argument that the Canadian  
Environmental Protection Act could be sustained under the trade and commerce power:  
82  
We reject these submissions for two main reasons. First, it is clear that the “pith  
and substance” of the impugned legislation does not concern trade and commerce, even if  
trade and commerce may be affected by the application of these provisions. The  
interveners Pollution Probe et al. seem to recognize this insofar as they submit that the  
trade and commerce power merely provides “supplemental authority” for upholding the  
Interim Order and the enabling provisions.  
83  
Secondly, even if it could be assumed that certain parts of s. 34(1) of the Act  
were aimed at the regulation of trade and commerce (e.g. those paragraphs dealing with  
importing and exporting), the remainder of s. 34(1) would, based on the arguments  
adduced above, be ultra vires Parliament and would have to be struck down. Assuming  
that the “trade and commerce” elements could be saved, therefore, they would have to be  
“severed” from the paragraphs of s. 34(1) that would be struck down. It is not altogether  
clear that this could be done, particularly since the portion of the statute remaining after  
severance must be capable of standing independently of the severed portion. In this case,  
the paragraphs are too “inextricably bound” to be able to survive independently (see  
Hogg, supra, at p. 15-21). For these reasons, we cannot agree with the interveners’  
submission that the impugned legislation can be justified as an exercise of the federal  
trade and commerce power.  
(Emphasis in original)  
The majority of the Court did not consider the general trade and commerce power.  
[172] There can be no doubt, of course, that the Act has economic impacts or, indeed, that it  
attacks the GHG problem by using economic tools. The charge imposed pursuant to Part 1 will  
raise fuel costs and the output-based performance standards system established by Part 2 will  
affect business decisions and create tradeable offset credits. But, all of this is wholly incidental to  
the core purpose and effect of the Act the establishment of minimum national standards of price  
stringency to promote the mitigation of GHG emissions. Although their comments were not  
offered with the precise details of the Act in mind, I agree with the observations made by Shi-  
Ling Hsu and Robin Elliot in “Regulating Greenhouse Gases in Canada: Constitutional and  
Policy Dimensions” (2009) 54 McGill LJ 463 at 490:  
… At bottom, it seems that the trade and commerce power is intended to vest the federal  
government with jurisdiction over economic matters. This is especially true with respect  
to the second branch of that head of power, the “general” trade and commerce branch.  
The leading case on that branch, City National Leasing, uses the word “economic”  
repeatedly. If City National Leasing were not limited to economic cases, there would be  
little to distinguish the trade and commerce power from the national concern branch of  
the POGG provision. While Professor Elgie has argued that emissions trading serves an  
economic purpose by seeking to concentrate compliance costs among those that can  
Page 50  
reduce emissions at the lowest cost, there is no denying that both cap-and-trade programs  
and emissions-intensity programs have an environmental objective as their core purpose.  
(Footnotes omitted)  
[173] In the end, it must be concluded that neither the Act as a whole nor Part 2 of the Act, in  
particular, can be sustained by Parliament’s trade and commerce power.  
2.  
Treaty powers  
[174] Ecofiscal Commission of Canada and International Emissions Trading Association  
suggest Canada’s power to implement treaties may provide the necessary authority to sustain the  
Act. They submit that, because the Act is intended to assist Canada in meeting its obligations  
under the Paris Agreement, it falls within this federal authority.  
[175] This line of argument cannot succeed. Section 132 of the Constitution Act, 1867 grants  
Parliament the power to enact legislation necessary to implement “[t]reaties between the Empire  
and such Foreign Countries”. However, its scope was significantly limited by the Privy Council  
in Attorney-General for Canada v Attorney-General for Ontario, [1937] AC 326 [Labour  
Conventions].  
[176] Writing in Labour Conventions, Lord Atkin reached three critical conclusions. First,  
treaties are not self-executing. In other words, they do not have the force of law by virtue of their  
ratification. Implementation requires legislative action. Second, s. 132 authorizes only the  
performance of obligations arising by virtue of treaties between the British Empire and foreign  
countries. It does not, and cannot, extend to authorize the performance of treaties between  
Canada and foreign countries. Third, there is no such thing as “treaty legislation”. Whether the  
federal government or the provinces have jurisdiction to implement a treaty is determined by  
considering the distribution of legislative powers found in ss. 91 and 92 of the Constitution Act,  
1867. In the words of Lord Atkin, “[t]he Dominion could not, merely by making promises to  
foreign countries, clothe itself with legislative authority inconsistent with the constitution which  
gave it birth” (at 327).  
[177] For these reasons, there is no federal treaty implementation power that can be relied upon  
in the present matter. Federal jurisdiction to implement legislation in accordance with Canada’s  
Paris Agreement commitments must be found in the Constitution Act, 1867.  
 
Page 51  
3.  
Criminal law power  
[178] A number of intervenors, including Canadian Public Health Association, Athabasca  
Chipewyan First Nation, Canadian Environmental Law Association, Environmental Defence  
Canada, Inc., Ecofiscal Commission of Canada, Intergenerational Climate Coalition, and  
International Emissions Trading Association, suggest the Act can be sustained under  
Parliament’s criminal law power.  
[179] Subsection 91(27) of the Constitution Act, 1867 gives Parliament jurisdiction in respect  
of “[t]he Criminal Law, except the Constitution of Courts of Criminal Jurisdiction, but including  
the Procedure in Criminal Matters”. As a general proposition, legislation can fall within the  
ambit of s. 91(27) if it features a valid criminal law purpose backed by a prohibition and a  
penalty. See: RJR-MacDonald at para 28; Reference re Firearms Act at para 27.  
[180] Accordingly, the first step in deciding if the Act might be classifiable as criminal law is to