Premier Scott Moe reacts to the Supreme Court of Canada's decision on the carbon tax on March 25, 2021. (Lisa Schick/980 CJME)

By Lisa Schick/CJME News

Battle for the ‘right reasons’: Moe disagrees with carbon tax ruling, will find made-in-Saskatchewan plan

Mar 25, 2021 | 4:45 PM

The premier may not like it, but Saskatchewan is going to have to submit to the carbon tax — for a while at least.

In a 6-3 decision released early Thursday, the Supreme Court of Canada ruled the federal government has the constitutional power to establish a price for greenhouse gas emissions.

That dashed the hopes of the governments of Saskatchewan, Ontario and Alberta, all of whom were seeking to axe the tax.

“While today’s decision does effectively end our legal avenues as a province, it does not end our opposition to this costly and ineffective tax. And just because Prime Minister Justin Trudeau has the legal right to impose a carbon tax, I would say that it doesn’t mean that he should,” Premier Scott Moe said a few hours after the decision was released.

Moe said his government will respect the decision but doesn’t agree with it.

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“I’ve played enough hockey to know that we’re not going to do a lot of fruitful arguing with the referees after the game is over,” explained Moe.

Last May, Moe’s government challenged the constitutionality of the tax in the Saskatchewan Court of Appeal. The court dismissed the challenge in a 3-2 ruling.

The split decision prompted the government to take the case to the Supreme Court of Canada.

The provincial government has been fighting this battle for years but even with this latest and final loss, Moe said it wasn’t a mistake.

“I will never apologize for standing up for the people that I represent in this great province,” said Moe.

Moe said the Supreme Court decision doesn’t make the tax any less punitive and doesn’t invalidate the provincial government’s position that there are better ways to address climate change.

Provincial alternative

To that end, Moe explained his government is putting together a proposal for the federal government with plans to reduce emissions that are meant to replace the carbon tax, as the province has always had the opportunity to do.

“We are going to put forward … a policy that continues to — to the greatest degree we are able — protect Saskatchewan jobs (and) protect Saskatchewan families,” said Moe.

The plan will include creating provincial greenhouse gas emissions regulations and bringing SaskPower and SaskEnergy under that, rather than under the federal legislation.

Moe said that would allow the province to have more control over the regulations and over where the tax money goes. The province has already asked the federal government for this change and for it to be retroactive to Jan. 1, 2019.

The plan will also have a proposal for Saskatchewan to design its own carbon pricing system for fuel, similar to the system in New Brunswick which provides a rebate right at the pump.

“Those people that are using the fuel will see some of that rebate immediately by not paying a higher price for fuel like they are today with the federal carbon tax in place,” said Moe.

Grain drying would be included under that system. Fuel for that would be exempt if possible, according to Moe, and the province would be looking to refund as much of the carbon tax as possible at the outset.

A greenhouse gas offset program is also being developed by the provincial government. Moe said it would be an option for regulated industries to meet their emissions targets by buying offsets from farmers, ranchers, and the forestry industry. Consultations are happening now and it’s expected to be in place by 2022.

Moe said the province will also be asking the federal government to support the development of small modular nuclear reactors. The province would also ask the federal government for its share of the federal low carbon economy funding, which Moe said would amount to about $126 million.

When asked why the province didn’t just create this proposal in the first place and save years of fighting, Moe said the effort was still worthwhile.

“This was a battle that was for the right reasons,” said Moe.

NDP reacts to ruling

Saskatchewan NDP Leader Ryan Meili is happy to see Trudeau and Moe’s game of “political football” come to an end with Thursday’s decision.

Meili said now the real work begins, but he wants Trudeau to admit the carbon tax disproportionately affects people in Saskatchewan.

“With that acknowledgement comes a responsibility to make dedicated investments in our province, including support for workers in hard-hit industries and help to create good, sustainable jobs in renewable energy,” Meili said.

He said the carbon tax is filled with major flaws that will greatly impact Saskatchewan families and the economy.

“The whole theory of the carbon tax is that this allows people to make different choices and avoid those costs,” Meili said of the policy’s intention. “But if you’re out in Wadena and driving your kids to hockey tournaments, what’s your option?”

Meili wants Moe to get to work on a new deal for Saskatchewan, something he said Moe could have been doing the last two years instead of fighting with Ottawa.

“Scott Moe keeps picking fights with the federal government, and he keeps losing,” Meili said. “Instead, he should be getting to work on behalf of Saskatchewan people.”

The Saskatchewan NDP is hoping a new Saskatchewan carbon tax deal includes exempting fuel used for grain drying, limiting any possible costs for families and ensuring families see rebates greater than their costs.

The decision

The carbon tax, known legally as the Greenhouse Gas Pollution Pricing Act, was passed by the federal government in 2018. It sets a minimum price on carbon emissions and imposes a federal pricing system in provinces that don’t meet that price with a system of their own.

Ontario’s appeals court also upheld the law as a matter of national concern, but Alberta’s top court struck it down in 2020 for interfering with a province’s constitutional right to develop its natural resources.

In Thursday’s written decision, Chief Justice Richard Wagner said climate change is a real danger and evidence shows a price on pollution is a critical element in addressing it.

“It is a threat of the highest order to the country, and indeed to the world,” Wagner wrote.

Given that, said Wagner, Canada’s evidence that this is a matter of national concern is sound.

“The undisputed existence of a threat to the future of humanity cannot be ignored,” he wrote.

The onus was on the federal government to prove to the court this is an issue of national concern that would allow it to take control of the matter rather than leaving it to the provinces. The majority of the court found the federal government did that, noting all parties, including the provinces challenging the law, agreed climate change is “an existential challenge.”

Wagner also wrote provinces can’t set minimum national standards on their own and if even one province fails to reduce its emissions, that could have an inordinate impact on other provinces.

He noted the three provinces that challenged the ruling also withdrew from the Pan-Canadian Framework on Clean Growth and Climate Change. That agreement, signed in 2016, agreed to set a national carbon price.

“When provinces that are collectively responsible for more than two-thirds of Canada’s total GHG emissions opt out of a co-operative scheme, this illustrates the stark limitations of a non-binding cooperative approach,” he wrote.

That left the remaining provinces, responsible for only one-third of Canada’s total emissions, “vulnerable to the consequences of the lion’s share of the emissions being generated by the non-participating provinces.”

Justice Suzanne Cote dissented in part, agreeing climate change is an issue of national concern but taking issue with the power the federal cabinet gave itself to adjust the law’s scope, including which fuels the price would apply to.

Justices Malcolm Rowe and Russell Brown dissented with the entire decision, arguing Canada had not shown climate change reaches the level of national concern. They objected the precedent the majority’s decision sets would allow Ottawa to set minimum national standards in all areas of provincial jurisdiction.

— With files from The Canadian Press and 650 CKOM’s Keenan Sorokan