Peace, order, good government and…climate change: the Supreme Court articulates the constitutional doctrine of the national concern

In 2018, in accordance with its international commitments, including the Paris Agreement, Parliament passed the Greenhouse Gas Pollution Pricing Act (the “GGPPA”). This legislative scheme has two components: (1) the creation of a fuel charge payable by certain producers, distributors and importers of various types of carbon-based fuels, and (2) the establishment of an output-based pricing system (“OBPS”) for industrial greenhouse gas (“GHG”) emissions by emissions-intensive industrial facilities.

The governments of Ontario, Alberta and Saskatchewan have all challenged the constitutionality of this legislation in their respective courts of appeal. While the GGPPA is a source of deep division between Ottawa and the provinces, all parties are unanimous on one fact: climate change is a reality. According to the challenging provinces, the purpose of their appeals is not to debate the existence of climate change but to determine whether the GGPPA infringes significantly on their jurisdiction.

The Saskatchewan Court of Appeal (3-2) and the Ontario Court of Appeal (4-1) ruled that the GGPPA is intra vires because its purpose is to establish minimum national standards for pricing GHG emissions, and this is a matter of national concern requiring a uniform legislative framework across Canada. On the other hand, the Alberta Court of Appeal (4-1) declared the GGPPA to be unconstitutional because the Act’s pith and substance is the regulation of GHG emissions, which falls under several provincial heads of power and therefore precludes the federal government from relying on the national concern doctrine.

Appeals as of right were filed in respect of the above three decisions, and the Attorneys General of Canada, Quebec, Ontario, Saskatchewan, Alberta and British Columbia, as well as more than twenty intervenors, were heard by the justices of the Supreme Court of Canada on September 23 and 24, 2020. In a judgment signed by a majority of six (6) judges (the “Judgment”),¹ the Supreme Court dismissed the appeals of the Attorneys General of Ontario, Alberta and Saskatchewan and declared the GGPPA constitutionally valid.

Analysis

The Court began its analysis of the validity of the GGPPA by reiterating that the division of legislative powers in ss. 91 and 92 C.A. 1867 gives the provinces the autonomy they need to ensure their society’s development while reserving to the federal government powers that can be exercised on a Canada-wide basis.² The reasons for the Judgment were thus rendered through the lens of cooperative federalism.³

To determine the constitutional validity of the GGPPA, the Court looked first at the analysis of the pith and substance. The first step of this analysis involves examining the purpose and effects of the impugned act or provision. The second step is to classify the impugned act or provision under one of the heads of power set out in ss. 91 or 92 C.A. 1867,⁴ thereby determining its intra vires character. These two steps are distinct.⁵

First, the Supreme Court provided a thorough review of the intrinsic evidence (preamble to the Act, provisions of the Act, etc.) and extrinsic evidence (Hansard, minutes of parliamentary committees, etc.)⁶ in relation to the GGPPA. The choice of means may, in some cases, be central to the legislative objective, and the pith and substance analysis must take this into account.⁷

Recommending that a vague or general characterization of the Act be avoided and instead that a specific characterization be made at this stage of the analysis,⁸ the Supreme Court found that the pith and substance of the GGPPA “is to establish minimum national standards of GHG price stringency to reduce GHG emissions.”⁹ Indeed, the title of the Act, which specifically refers to the concept of “pricing”, supports this characterization,¹⁰ especially since the preamble of the GGPPA is clear that its central aspect is the national pricing of GHG emissions.¹¹ Furthermore, the GGPPA is an implementation of Canada’s commitments under the Paris Agreement.¹² According to the Supreme Court, the GGPPA regime thus serves solely as a “backstop”¹³ that would apply only in jurisdictions that do not meet the national minimum.¹⁴ Therefore, provinces remain in control of the pricing instruments they wish to put in place to combat GHGs, but must at least meet the standard set by the federal government for the stringency of these schemes.¹⁵ In doing so, the federal government is not taking over provincial jurisdiction over environmental matters,¹⁶ nor attempting to regulate other aspects of GHG emissions reduction.¹⁷

Having characterized the Act’s pith and substance, the Court then turned to the classification stage of the analysis. This involved relating the pith and substance or “subject matter” of the legislation to the heads of power listed in C.A. 1867. In this case, the Court held that the national concern doctrine, which allows Parliament to have jurisdiction over “matters that are found to be of inherent national concern,”¹⁸ was applicable.

The source of this doctrine is the opening paragraph of s. 91 C.A. 1867, which empowers Parliament to make laws for the peace, order and good government of Canada. However, the national concern doctrine has not been the subject of extensive jurisprudence in recent years.¹⁹ The Court’s historical analysis demonstrates that the courts have been very careful in interpreting this power, recognizing special concerns about provincial autonomy within their spheres of jurisdiction under C.A. 1867. Thus, following Crown Zellerbach,²⁰ the national concern doctrine requires that the subject matter in question be “single, distinctive and indivisible” and that its effects be consistent with the division of powers, since the effect of its recognition is permanent and confers exclusive jurisdiction on Parliament.²¹ The subject matter’s definition will therefore be limited to those aspects that have a sufficient connection to the inherent national concern.²²

According to the Court, the analysis of the application of the national concern doctrine to a matter must proceed on the basis of three criteria, namely: (i) whether the proposed subject matter is of sufficient interest to the nation as a whole; (ii) its singleness, distinctiveness and indivisibility; and (iii) the analysis of its scale of impact on the division of powers.

The Judgment is unequivocal about the importance to the country as a whole of implementing minimum national standards for pricing GHG emissions. The national interest must be considered in relation to the seriousness of the underlying problem, and the Supreme Court is clear that climate change is “a threat of the highest order to the country, and indeed to the world.”²³

On the second criterion, the Court emphasized that GHG emissions are extra-provincial and even international in nature and effect. In addition, the Court emphasized that the federal pricing mechanism is specific and limited. The GGPPA is not intended to replace provincial standards or to regulate GHG emissions generally, but rather to provide a “backstop”. In the Court’s view, this is a distinctly federal role.²⁴

Furthermore, while provinces may choose to work together to establish a uniform GHG pricing scheme, there is nothing in the Constitution that allows them to establish a binding minimum national standard. Moreover, failure to include a province in the scheme would jeopardize the scheme’s success at the national level.²⁵ Finally, a province’s inaction or refusal to cooperate would have serious extra-provincial consequences, as GHG emissions contribute directly to climate change, the far-reaching consequences of which are beyond dispute.

Finally, with respect to the third criterion, the Court agreed that recognizing a new subject matter as being of national concern will necessarily have an impact on provincial jurisdiction. Nevertheless, this impact is limited due to the very specific and limited scope of the GGPPA, and it cannot outweigh the “irreversible” consequences that would result if Parliament were unable to implement minimum GHG pricing standards.

The Court thus concluded that the GGPPA is intra vires under the national concern doctrine.

Dissenting in part, Justice Côté agreed with the majority’s analysis of the national concern doctrine and the principle that Parliament may, on that basis, enact minimum national pricing standards to reduce GHG emissions. However, in her view, the GGPPA in its current form is unconstitutional because the minimum standards in question are substantially set by the executive and not by Parliament, which is incompatible with parliamentary sovereignty, the rule of law and the separation of powers. In particular, Justice Côté raised a number of concerns about the so-called Henry VIII clauses, which allow the executive to pass regulations amending the enabling legislation. She also agreed with Justices Brown and Rowe that the framework provided by Part 2 of the GGPPA effectively gives the executive broad discretion to unilaterally set varying standards on an industry-by-industry basis.

In dissent, Brown and Rowe JJ. were unanimous in their view that it is dangerous to federalism to accept federal minimum standards as justified under the national concern doctrine, which presupposes a federal residual power in an area where provincial legislative jurisdiction is de facto recognized. In Justice Brown’s view, “[w]hether and to what extent any given standard is integral to reducing Canada’s GHG emissions is a matter of policy that has no bearing on the constitutional question facing this Court.”²⁶ Justice Rowe, for his part, attacked the majority’s conception of cooperative federalism head-on, writing: “The Act is not an exercise in cooperative federalism. Rather, it is the means to enforce supervisory federalism.”²⁷ He even went so far as to propose a method for testing whether regulations respect the division of powers and how this method can be applied to regulations made under the GGPPA. It should be noted that Justices Brown and Rowe indicated on several occasions that they agreed with the points made by the Attorney General of Quebec.

Comments

According to the majority of the Court, federal intervention is “indispensable” since, in the absence of federal legislation binding on the provinces, there is nothing to protect Canadians from the consequences of a province taking insufficiently stringent measures to limit GHG emissions or not taking any measures at all.²⁸

On the one hand, this development in the case law on national concern is significant, since few decisions have recognized the use of this doctrine in recent years. On the other hand, recognition of the ability to impose nationwide “minimum standards” in a given field under the aegis of the national concern doctrine is an important development for Parliament. This possibility had, until now, been largely rejected by the courts.

Written in collaboration with Thomas Stelmazuk-Côté, articling student.

¹Reference re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11 (the “Judgment”).
² Judgment, paras. 48-49.
³ Judgment, para. 50.
⁴ Judgment, para. 51.
⁵ Judgment, para. 56.
⁶ Judgment, para. 51.
⁷ Judgment, para. 55.
⁸ Judgment, para. 52.
⁹ Judgment, para. 57.
¹⁰ Judgment, para. 58.
¹¹ Judgment, paras. 59-61.
¹² Judgment, para. 63
¹³ Judgment, paras. 64-65.
¹⁴ Judgment, para. 72.
¹⁵ Judgment, paras. 64-65, 81.
¹⁶ Judgment, para. 65.
¹⁷ Judgment, para. 71.
¹⁸ Judgment, para. 89.
¹⁹ The rulings are discussed in the Judgment at paras. 92-109.
²⁰R v. Crown Zellerbach Canada Ltd, [1988] 1 S.C.R. 401.
²¹ Judgment, para. 120.
²² Judgment, para. 122.
²³ Judgment, para. 167.
²⁴ Judgment, para. 180.
²⁵ From 2005 to 2016, GHG emissions fell by 22% in Ontario, 11% in Quebec, 5.1% in British Columbia, and over 10% in New Brunswick, Nova Scotia, Prince Edward Island and the Yukon. However, these declines were more than offset by increases of 14% in Alberta and 10.7% in Saskatchewan. Furthermore, although all provinces committed in the Vancouver Declaration in 2016 to cooperate to drastically reduce their emissions, Alberta, Ontario and Saskatchewan, which accounted for 71% of Canada’s GHG emissions in 2016, withdrew from that commitment. See paras. 184 and 185 of the Judgment.
²⁶ Judgment, para. 332.
²⁷ Judgment, para. 590.
²⁸ Judgment, para. 191.