{"id":1940,"date":"2019-07-02T15:37:33","date_gmt":"2019-07-02T15:37:33","guid":{"rendered":"https:\/\/www.thor.ca\/blog\/?p=1940"},"modified":"2019-07-02T16:39:36","modified_gmt":"2019-07-02T16:39:36","slug":"federal-carbon-pricing-regime-now-two-for-two","status":"publish","type":"post","link":"https:\/\/www.thor.ca\/blog\/2019\/07\/federal-carbon-pricing-regime-now-two-for-two\/","title":{"rendered":"Federal Carbon Pricing Regime Now Two-for-Two"},"content":{"rendered":"

On June 28, 2019, the Ontario Court of Appeal released its decision<\/a> on the Ontario government\u2019s reference regarding the constitutionality of the federal carbon pricing regime.\u00a0 Like the Saskatchewan Court of Appeal ruled in May, the majority of the Ontario Court of Appeal held that the federal Greenhouse Gas Pollution Pricing Act<\/em><\/a> (the \u201cAct\u201d) is valid under the Constitution.\u00a0 This article will give a brief summary of the Ontario court\u2019s decision.\u00a0 For a discussion on the possible ramifications of this decision, see our article<\/a> on the Saskatchewan Court\u2019s decision.<\/p>\n

The Act<\/strong><\/p>\n

As a brief refresher, the Act came into effect on June 21, 2018.\u00a0 In general, the Act contains two regimes: a charge on carbon-based fuels that applies to fuels produced, delivered, or used in a \u201clisted province\u201d based on a rate per CO2<\/sub> equivalent (Part 1 of the Act); and a mechanism for pricing greenhouse gas emissions by emission-intense industrial facilities (Part 2).<\/p>\n

As of July 1, 2019, Part 1 of the Act applies in Ontario, New Brunswick, Manitoba, Saskatchewan, Yukon, and Nunavut, and is scheduled to apply in Alberta beginning on January 1, 2020.\u00a0 Part 2 of the Act applies in Ontario, New Brunswick, Manitoba, Prince Edward Island, Yukon, Nunavut, and partially in Saskatchewan. The Act does not apply in certain provinces, like British Columbia and Quebec, which have their own carbon pricing mechanisms which meet the federal standard.<\/p>\n

Subsection 165(2) of the Act requires any money raised under the Act to be redistributed in the province it was collected in. \u00a0Section 122.8 of the federal Income Tax Act <\/em>provides for a refundable tax credit for residents in provinces subject to Part 1 of the Act starting with the 2018 taxation year.<\/p>\n

The Decision<\/strong><\/p>\n

In July 2018, the Ontario government announced that it would withdraw from the national carbon pricing program.\u00a0 Ontario then brought a reference to its Court of Appeal to determine if including Ontario as a \u201clisted province\u201d for purposes of the Act was constitutional.\u00a0 The Court heard arguments on April 15-18, 2019.\u00a0 Like the Saskatchewan Court, the Ontario Court reached a split decision on the constitutionality of the Act, with four judges deciding that the Act is constitutional and one holding that it is not.<\/p>\n

Aside from the governments of Canada and Ontario, the Court heard submissions from British Columbia, Saskatchewan, and New Brunswick, as well as various First Nations and private associations.<\/p>\n

As was the case with the Saskatchewan decision, all of the parties to this reference agreed on the serious issue of anthropogenic climate change and the need to take immediate action to combat it.\u00a0 Statements from the majority and minority reasons on this point include:<\/p>\n