Canada court starts hearing challenge to federal carbon tax

Source: ICIS News

2019/02/13

TORONTO (ICIS)--The constitutional court of Canada’s resource-rich Saskatchewan province on Wednesday began hearing arguments in the province’s legal challenge to Canada’s federal carbon tax.

The tax starts at Canadian dollar (C$) 20/tonne ($15/tonne) and will rise by C$10 annually to C$50/tonne in 2022. It was applied effective 1 January in four provinces – Ontario, Saskatchewan, Manitoba and New Brunswick – that do not have their own provincial carbon tax or equivalent programmes, such as cap-and-trade, to reduce carbon emissions.

Major industries, including chemicals, have output-based thresholds, meaning that initially they will be taxed only on a small share of their emissions.

Saskatchewan argues that the federal tax, as implemented by the government of Prime Minister Justin Trudeau, intrudes on provincial jurisdiction and thus violates Canada’s constitution.

Court hearings at Saskatchewan’s capital, Regina, are scheduled for 13 and 14 February.

Legal commentators said the case will likely go to the federal Supreme Court in Ottawa for a final decision.

Canada’s largest province, Ontario, is supporting Saskatchewan’s case as an intervener, but it has filed its own challenge, which is scheduled for a court hearing in April.

For Trudeau, who faces elections in October, the legal fights with the provinces add to his troubles over allegations that his government sought to interfere in the prosecution of Canadian chemicals, energy and infrastructure major SNC-Lavalin for alleged corruption.

Canada’s chemistry industry supports action to mitigate climate change but also recommends that these policies be developed transparently while avoiding costly duplication between regulations and jurisdictions.

Also, the industry wants policy makers to consider Canada’s competitiveness, especially in relation to the US, when developing climate change policy.

($1 = C$1.32)