The cracks in the legal rationale for the federal carbon tax are growing. New Brunswick’s outgoing Premier Blaine Higgs was right to keep chipping away at them.
Federal carbon tax “carve-outs violate the Supreme Court’s ruling,” New Brunswick’s Progressive Conservative Party said when Higgs announced he would launch a new legal challenge against the tax.
Higgs may no longer be premier, but his proposed legal challenge still has merit. Other premiers should follow through.
The legal issue stems from Prime Minister Justin Trudeau’s decision to remove the carbon tax from furnace oil — a popular fuel source in parts of Atlantic Canada.
When the Supreme Court okayed Trudeau’s carbon tax, it was because the government argued a national problem needs a national solution.
The court ruled Ottawa could set minimum national standards for emissions reductions under the Constitution’s peace, order and good government clause: “The proposed matter of establishing minimum national standards of GHG price stringency to reduce GHG emissions is of clear concern to Canada as a whole,” the court wrote.
The court went on to note that “the withdrawal of one province from the scheme would clearly threaten its success.”
The Trudeau government applauded the decision, with then-Environment Minister Catherine McKenna proclaiming the carbon tax “an issue of national concern.”
The government’s argument was climate change is a national concern, and the national solution is an evenly applied carbon tax. This is the legal rationale the court accepted. But Trudeau torpedoed that argument by creating a carve-out that mostly benefits one part of the country.
“Unlike the rest of Canada, fuel oil makes up a large share of residential heating energy in Nova Scotia at 32 per cent,” according to the government of Nova Scotia. “Only Prince Edward Island depends more heavily on fuel oil for residential heating.”
“Across Canada, fuel oil makes up just three per cent of residential heating energy, with very low usage in all provinces from New Brunswick to British Columbia,” the report continues.
In fact, there are so few homes using furnace oil in Alberta, Saskatchewan and Manitoba that data for those provinces in the report is listed as “n/a.”
If climate change is a national emergency requiring national coordination, why are some families allowed to escape the full brunt of the tax while others are not?
By providing a break to specific regions, Trudeau undermined the constitutional justification that allowed the carbon tax to exist in the first place.
Only weeks before Trudeau removed the carbon tax from furnace oil, Ken McDonald — a Liberal MP from Atlantic Canada — voted to “repeal all carbon taxes.”
“Everywhere I go people come up to me and say, ‘You know, we’re losing faith in the Liberal Party,” McDonald told CBC. “Seniors who live alone tell me they go around their house in the spring and winter time with a blanket wrapped around them because they can’t afford the home heating fuel.”
Trudeau then announced his carbon tax carve-out surrounded by Atlantic Liberal MPs. He credited those “amazing” MPs as the reason folks in that region got relief.
Others extended that logic.
“Perhaps they need to elect more Liberals,” said Gudie Hutchings, Minister of the Atlantic Canada Opportunities Agency, when asked why most Canadians weren’t getting relief.
Justice Malcolm Rowe foresaw this issue in his dissent in the original Supreme Court decision. He wrote, “regulations that have the effect of favouring or imposing unequal burdens on certain provinces and industries in a manner that cannot be justified,” would be unconstitutional.
Rowe’s concern is more relevant than ever. Trudeau’s carve-out disrupts the uniformity that made the carbon tax constitutional.
Had he been re-elected, Higgs’ legal challenge would’ve had a strong chance of success. The Trudeau government’s decision to selectively enforce the tax has weakened its position. If the carbon tax is no longer a uniform measure, it’s no longer a “national” policy.
Other premiers should pick up Higgs’ legal challenge to dismantle Ottawa’s carbon tax and return power to the provinces.
Devin Drover is the General Counsel and Franco Terrazzano is the Federal Director of the Canadian Taxpayers Federation
National Post