References re Greenhouse Gas Pollution Pricing Act , 2021 SCC 11, [2021] 1 S.C.R. 175

SUPREME COURT OF CANADA

Appeals Heard: September 22, 23, 2020 Judgment Rendered: March 25, 2021 Dockets: 38663, 38781, 39116

Between:

Attorney General of Saskatchewan

Appellant

and

Attorney General of Canada

Respondent

• and -

Attorney General of Ontario, Attorney General of Quebec, Attorney General of New Brunswick, Attorney General of Manitoba, Attorney General of British Columbia, Attorney General of Alberta, Progress Alberta Communications Limited, Canadian Labour Congress, Saskatchewan Power Corporation, SaskEnergy Incorporated, Oceans North Conservation Society, Assembly of First Nations, Canadian Taxpayers Federation, Canada's Ecofiscal Commission, Canadian Environmental Law Association, Environmental Defence Canada Inc., Sisters of Providence of St. Vincent de Paul, Amnesty International Canada, National Association of Women and the Law, Friends of the Earth, International Emissions Trading Association, David Suzuki Foundation, Athabasca Chipewyan First Nation, Smart Prosperity Institute, Canadian Public Health Association, Climate Justice Saskatoon, National Farmers Union, Saskatchewan Coalition for Sustainable Development, Saskatchewan Council for International Cooperation, Saskatchewan Environmental Society, SaskEV, Council of Canadians: Prairie and Northwest Territories Region, Council of Canadians: Regina Chapter, Council of Canadians: Saskatoon Chapter, New Brunswick Anti-Shale Gas Alliance, Youth of the Earth, Centre québécois du droit de l'environnement, Équiterre, Generation Squeeze, Public Health Association of British Columbia, Saskatchewan Public Health Association, Canadian Association of Physicians for the Environment, Canadian Coalition for the Rights of the Child, Youth Climate Lab, Assembly of Manitoba Chiefs, City of Richmond, City of Victoria, City of Nelson, District of Squamish, City of Rossland, City of Vancouver and Thunderchild First Nation

Interveners

And Between:

Attorney General of Ontario

Appellant

and

Attorney General of Canada

Respondent

• and -

Attorney General of Quebec, Attorney General of New Brunswick, Attorney General of Manitoba, Attorney General of British Columbia, Attorney General of Saskatchewan, Attorney General of Alberta, Progress Alberta Communications Limited, Anishinabek Nation, United Chiefs and Councils of Mnidoo Mnising, Canadian Labour Congress, Saskatchewan Power Corporation, SaskEnergy Incorporated, Oceans North Conservation Society, Assembly of First Nations, Canadian Taxpayers Federation, Canada's Ecofiscal Commission, Canadian Environmental Law Association, Environmental Defence Canada Inc., Sisters of Providence of St. Vincent de Paul, Amnesty International Canada, National Association of Women and the Law, Friends of the Earth, International Emissions Trading Association, David Suzuki Foundation, Athabasca Chipewyan First Nation, Smart Prosperity Institute, Canadian Public Health Association, Climate Justice Saskatoon, National Farmers Union, Saskatchewan Coalition for Sustainable Development, Saskatchewan Council for International Cooperation, Saskatchewan Environmental Society, SaskEV, Council of Canadians: Prairie and Northwest Territories Region, Council of Canadians: Regina Chapter, Council of Canadians: Saskatoon Chapter, New Brunswick Anti-Shale Gas Alliance, Youth of the Earth, Centre québécois du droit de l'environnement, Équiterre, Generation Squeeze, Public Health Association of British Columbia, Saskatchewan Public Health Association, Canadian Association of Physicians for the Environment, Canadian Coalition for the Rights of the Child, Youth Climate Lab, Assembly of Manitoba Chiefs, City of Richmond, City of Victoria, City of Nelson, District of Squamish, City of Rossland, City of Vancouver and Thunderchild First Nation

Interveners

And Between:

Attorney General of British Columbia

Appellant

and

Attorney General of Alberta

Respondent

• and -

Attorney General of Canada, Attorney General of Ontario, Attorney General of Quebec, Attorney General of New Brunswick, Attorney General of Manitoba, Attorney General of Saskatchewan, Progress Alberta Communications Limited, Saskatchewan Power Corporation, SaskEnergy Incorporated, Oceans North Conservation Society, Assembly of First Nations, Canadian Taxpayers Federation, Canada's Ecofiscal Commission, Canadian Environmental Law Association, Environmental Defence Canada Inc., Sisters of Providence of St. Vincent de Paul, Amnesty International Canada, International Emissions Trading Association, David Suzuki Foundation, Athabasca Chipewyan First Nation, Smart Prosperity Institute, Canadian Public Health Association, Climate Justice Saskatoon, National Farmers Union, Saskatchewan Coalition for Sustainable Development, Saskatchewan Council for International Cooperation, Saskatchewan Environmental Society, SaskEV, Council of Canadians: Prairie and Northwest Territories Region, Council of Canadians: Regina Chapter, Council of Canadians: Saskatoon Chapter, New Brunswick Anti-Shale Gas Alliance, Youth of the Earth, Generation Squeeze, Public Health Association of British Columbia, Saskatchewan Public Health Association, Canadian Association of Physicians for the Environment, Canadian Coalition for the Rights of the Child, Youth Climate Lab and Thunderchild First Nation

Interveners

Indexed as: References re Greenhouse Gas Pollution Pricing Act

2021 SCC 11

File Nos.: 38663, 38781, 39116.

2020: September 22, 23; 2021: March 25.

Present: Wagner C.J. and Abella, Moldaver, Karakatsanis, Côté, Brown, Rowe, Martin and Kasirer JJ.

on appeal from the court of appeal for saskatchewan

on appeal from the court of appeal for ontario

on appeal from the court of appeal of alberta

Constitutional law — Division of powers — Greenhouse gas emissions — Federal legislation setting minimum national standards of greenhouse gas pricing — Whether greenhouse gas pricing is matter of national concern falling within Parliament's power to legislate in respect of peace, order and good government of Canada — Constitution Act, 1867, s. 91 "preamble" — Greenhouse Gas Pollution Pricing Act, S.C. 2018, c. 12, s. 186 .

In 2018, Parliament enacted the Greenhouse Gas Pollution Pricing Act (" GGPPA "). The GGPPA comprises four parts and four schedules. Part 1 establishes a fuel charge that applies to producers, distributors and importers of various types of carbon-based fuel. Part 2 sets out a pricing mechanism for industrial greenhouse gas ("GHG") emissions by large emissions-intensive industrial facilities. Part 3 authorizes the Governor in Council to make regulations providing for the application of provincial law concerning GHG emissions to federal works and undertakings, federal land and Indigenous land located in that province, as well as to internal waters located in or contiguous with the province. Part 4 requires the Minister of the Environment to prepare an annual report on the administration of the GGPPA and have it tabled in Parliament.

Saskatchewan, Ontario and Alberta challenged the constitutionality of the first two parts and the four schedules of the GGPPA by references to their respective courts of appeal, asking whether the GGPPA is unconstitutional in whole or in part. In split decisions, the courts of appeal for Saskatchewan and Ontario held that the GGPPA is constitutional, while the Court of Appeal of Alberta held that it is unconstitutional. The Attorney General of British Columbia, who had intervened in the Court of Appeal of Alberta, the Attorney General of Saskatchewan and the Attorney General of Ontario now appeal as of right to the Court.

Held (Côté J. dissenting in part and Brown and Rowe JJ. dissenting): The appeals by the Attorney General of Saskatchewan and the Attorney General of Ontario should be dismissed, and the appeal by the Attorney General of British Columbia should be allowed. The reference questions are answered in the negative.

Per Wagner C.J. and Abella, Moldaver, Karakatsanis, Martin and Kasirer JJ.: The GGPPA is constitutional. It sets minimum national standards of GHG price stringency to reduce GHG emissions. Parliament has jurisdiction to enact this law as a matter of national concern under the peace, order, and good government ("POGG") clause of s. 91 of the Constitution Act, 1867 .

Federalism is a foundational principle of the Canadian Constitution. Its objectives are to reconcile diversity with unity, promote democratic participation by reserving meaningful powers to the local and regional level and foster cooperation between Parliament and the provincial legislatures for the common good. Sections 91 and 92 of the Constitution give expression to the principle of federalism and divide legislative powers between Parliament and the provincial legislatures. Under the division of powers, broad powers were conferred on the provinces to ensure diversity, while at the same time reserving to the federal government powers better exercised in relation to the country as a whole to provide for Canada's unity. Federalism recognizes that within their spheres of jurisdiction, provinces have autonomy to develop their societies. Federal power cannot be used in a manner that effectively eviscerates provincial power.

Courts, as impartial arbiters, are charged with resolving jurisdictional disputes over the boundaries of federal and provincial powers on the basis of the principle of federalism. Although early Canadian constitutional decisions by the Judicial Committee of the Privy Council applied a rigid division of federal-provincial powers as watertight compartments, the Court has favoured a flexible view of federalism, best described as a modern cooperative federalism, that accommodates and encourages intergovernmental cooperative efforts. However, the Court has also always maintained that flexibility and cooperation, while important, cannot override or modify federalism and the constitutional division of powers.

The review of legislation on federalism grounds consists of the well-established two-stage analytical approach. At the first stage, a court must consider the purpose and effects of the challenged statute or provision with a view to characterizing the subject matter or "pith and substance". A court must then classify the subject matter with reference to federal and provincial heads of power under the Constitution in order to determine whether it is intra vires Parliament and therefore valid.

At the first stage of the division of powers analysis, a court must consider the purpose and effects of the challenged statute or provision in order to identify its "pith and substance" or its main thrust or dominant or most important characteristic. In determining the purpose of the challenged statute or provision, a court can consider both intrinsic evidence, such as the legislation's preamble or purpose clauses, and extrinsic evidence, such as Hansard or minutes of parliamentary committees. In considering the effects of the challenged legislation, a court can consider both the legal effects, those that flow directly from the provisions of the statute itself, and the practical effects, the side effects that flow from the application of the statute. Where a court is asked to adjudicate the constitutionality of legislation that has been in force for only a short time, any prediction of future practical effect is necessarily short-term, since the court is not equipped to predict accurately the future consequential impact of legislation. The characterization process is not technical or formalistic. A court can look at the background and circumstances of a statute's enactment as well as at the words used in it.

Three points with respect to the identification of the pith and substance are important to clarify. First, the pith and substance of a challenged statute or provision must be described as precisely as possible. A vague or general description is unhelpful, as it can result in the law being superficially assigned to both federal and provincial heads of powers or may exaggerate the extent to which the law extends into the other level of government's sphere of jurisdiction. However, precision should not be confused with narrowness. A court must focus on the law itself and what it is really about. The pith and substance of a challenged statute or provision should capture the law's essential character in terms that are as precise as the law will allow. Second, it is permissible in some circumstances for a court to include the legislative choice of means in the definition of a statute's pith and substance, as long as it does not lose sight of the fact that the goal of the analysis is to identify the true subject matter of the challenged statute or provision. In some cases, the choice of means may be so central to the legislative objective that the main thrust of a statute or provision, properly understood, is to achieve a result in a particular way, which would justify including the means in identifying the pith and substance. Third, the characterization and classification stages of the division of powers analysis are and must be kept distinct. The pith and substance of a statute or a provision must be identified without regard to the heads of legislative competence.

At the second stage of the division of power analysis, a court must classify the matter by reference to the heads of power set out in the Constitution . Matters and classes of subjects are distinct. Law-making powers are exercisable in relation to matters, which in turn generally come within broader classes of subjects. Section 91 does not provide in the context of the POGG power that Parliament can make laws in relation to classes of subjects; instead, it states that Parliament can make laws for the peace, order, and good government of Canada in relation to "Matters". National concern is a well-established but rarely applied doctrine of Canadian constitutional law derived from the introductory clause of s. 91 of the Constitution, which empowers Parliament to make laws for the peace, order, and good government of Canada, in relation to all matters not coming within the classes of subjects assigned exclusively to the legislatures of the provinces. A matter that falls under the POGG power necessarily does not come within the classes of subjects enumerated in ss. 91 and 92.

Courts must approach a finding that the federal government has jurisdiction on the basis of the national concern doctrine with great caution. The effect of finding that a matter is one of national concern is permanent and confers exclusive jurisdiction over that matter on Parliament. However, the scope of the federal power is defined by the nature of the national concern itself and only aspects with a sufficient connection to the underlying inherent national concern will fall within the scope of the federal power.

A closely related question concerns the applicability of the double aspect doctrine to a matter of national concern. The double aspect doctrine recognizes that the same fact situations can be regulated from different perspectives, one of which may relate to a provincial power and the other to a federal power. The doctrine can apply in cases in which the federal government has jurisdiction on the basis of the national concern doctrine. Such an approach fosters coherence in the law, because the double aspect doctrine can apply to every enumerated federal and provincial head of power. It is also consistent with the modern approach to federalism, which favours flexibility and a degree of overlapping jurisdiction. However, the fact that the double aspect doctrine can apply does not mean that it will apply in a given case. It may apply if a fact situation can be regulated from different federal and provincial perspectives and each level of government has a compelling interest in enacting legal rules in relation to that situation. It should be applied cautiously so as to avoid eroding the importance attached to provincial autonomy.

The double aspect doctrine takes on particular significance where Canada asserts jurisdiction over a matter that involves a minimum national standard imposed by legislation that operates as a backstop. The recognition of a matter of national concern such as this will inevitably result in a double aspect situation. This is in fact the very premise of a federal scheme that imposes minimum national standards: Canada and the provinces are both free to legislate in relation to the same fact situation but the federal law is paramount. In such a case, even if the national concern test would otherwise be met, a cautious approach to the double aspect doctrine should act as an additional check. The court must be satisfied that Canada in fact has a compelling interest in enacting legal rules over the federal aspect of the activity at issue and that the multiplicity of aspects is real and not merely nominal.

Turning to the national concern test, there are two points worth noting about the framework as a whole. First, the recognition of a matter of national concern must be based on evidence. An onus rests on Canada throughout the national concern analysis to adduce evidence in support of its assertion of jurisdiction. Second, there is no requirement that a matter be historically new in order to be found to be one of national concern. Many new developments may be predominantly local and provincial in character and fall under provincial heads of power. The term "new", as used in the jurisprudence, refers to matters that could satisfy the national concern test and includes both "new" matters that did not exist in 1867 and matters that are "new" in the sense that the understanding of those subject matters has, in some way, shifted so as to bring out their inherently national character. Thus, the critical element of the analysis is the requirement that matters of national concern be inherently national in character, not that they be historically new.

Finding that a matter is one of national concern involves a three-step analysis. First, as a threshold question, Canada must establish that the matter is of sufficient concern to the country as a whole to warrant consideration as a possible matter of national concern. Second, the matter must have a singleness, distinctiveness and indivisibility. Third, Canada must show that the proposed matter has a scale of impact on provincial jurisdiction that is reconcilable with the division of powers. The purpose of the national concern analysis is to identify matters of inherent national concern — matters which, by their nature, transcend the provinces.

The analysis begins by asking, as a threshold question, whether the matter is of sufficient concern to Canada as a whole to warrant consideration under the national concern doctrine. This invites a common-sense inquiry into the national importance of the proposed matter . This approach does not open the door to the recognition of federal jurisdiction simply on the basis that a legislative field is important; it operates to limit the application of the national concern doctrine and provides essential context for the analysis that follows.

The second step of the analysis requires that a matter have a singleness, distinctiveness and indivisibility that clearly distinguishes it from matters of provincial concern. Two principles underpin this requirement: first, to prevent federal overreach, jurisdiction should be found to exist only over a specific and identifiable matter that is qualitatively different from matters of provincial concern; and second, federal jurisdiction should be found to exist only where the evidence establishes provincial inability to deal with the matter.

Under the first principle of the singleness, distinctiveness and indivisibility analysis, the court should inquire into whether the matter is predominantly extraprovincial and international in its nature or its effects, into the content of any international agreements in relation to the matter, and into whether the matter involves a federal legislative role that is distinct from and not duplicative of that of the provinces. It is clearly not enough for a matter to be quantitatively different from matters of provincial concern — the mere growth or extent of a problem across Canada is insufficient to justify federal jurisdiction. International agreements may in some cases indicate that a matter is qualitatively different from matters of provincial concern. However, the existence of treaty obligations is not determinative of federal jurisdiction as there is no freestanding federal treaty implementation power and Parliament's jurisdiction to implement treaties signed by the federal government depends on the ordinary division of powers. Furthermore, to be qualitatively different from matters of provincial concern, the matter must not be an aggregate of provincial matters. The federal legislative role must be distinct from and not duplicative of that of the provinces. Federal legislation will not be qualitatively distinct if it overshoots regulation of a national aspect of the field and instead duplicates provincial regulation or regulates issues that are primarily of local concern.

The second principle underpinning the singleness, distinctiveness, and indivisibility analysis is that federal jurisdiction should be found to exist only where the evidence establishes provincial inability to deal with the matter. Provincial inability functions as a strong constraint on federal power and should be seen as a necessary but not sufficient requirement for the purposes of the national concern doctrine. In order for provincial inability to be established both of these factors are required: (1) the legislation should be of a nature that the provinces jointly or severally would be constitutionally incapable of enacting; and (2) the failure to include one or more provinces or localities in a legislative scheme would jeopardize the successful operation of the scheme in other parts of the country. And there is a third factor that is required in the context of the national concern doctrine in order to establish provincial inability: a province's failure to deal with the matter must have grave extraprovincial consequences. The requirement for grave extraprovincial consequences sets a high bar for a finding of provincial inability for the purposes of the national concern doctrine and can be satisfied by actual harm or by a serious risk of harm being sustained in the future. It may include serious harm to human life and health or to the environment, though it is not necessarily limited to such consequences. Mere inefficiency or additional financial costs stemming from divided or overlapping jurisdiction is clearly insufficient. Evaluating extraprovincial harm helps to determine whether a national law is not merely desirable, but essential, in the sense that the problem is beyond the power of the provinces to deal with it. This connects the provincial inability test to the overall purpose of the national concern test, which is to identify matters of inherent national concern that transcend the provinces.

At the third and final step of the national concern analysis, Canada must show that the proposed matter has a scale of impact on provincial jurisdiction that is reconcilable with the fundamental distribution of legislative power under the Constitution . The purpose of the scale of impact analysis is to protect against unjustified intrusions on provincial autonomy and prevent federal overreach. At this stage of the analysis, the intrusion upon provincial autonomy that would result from empowering Parliament to act is balanced against the extent of the impact on the interests that would be affected if Parliament were unable to constitutionally address the matter at a national level. Identifying a new matter of national concern will be justified only if the latter outweighs the former.

In this case, the true subject matter of the GGPPA is establishing minimum national standards of GHG price stringency to reduce GHG emissions. Both the short and long titles of the GGPPA confirm that its true subject matter is not just to mitigate climate change, but to do so through the pan-Canadian application of pricing mechanisms to a broad set of GHG emission sources. Likewise, it is clear from reading the preamble as a whole that the focus of the GGPPA is on national GHG pricing. In Parliament's eyes, the relevant mischief is the effects of the failure of some provinces to implement GHG pricing systems or to implement sufficiently stringent pricing systems, and the consequential failure to reduce GHG emissions across Canada. To address this mischief, the GGPPA establishes minimum national standards of GHG pricing that apply across Canada, setting a GHG pricing floor across the country.

Similarly, it can be seen from the events leading up to the enactment of the GGPPA and from government policy papers that there was a focus on GHG pricing and establishing minimum national standards of GHG price stringency for GHG emissions — through a federally imposed national direct GHG pricing backstop — without displacing provincial and territorial jurisdiction over the choice and design of pricing instruments. This is supported by evidence of the legislative debates. Both elected representatives and senior public servants consistently described the purpose of the GGPPA in terms of imposing a Canada-wide GHG pricing system, not of regulating GHG emissions generally.

The legal effects of the GGPPA confirm that its focus is on national GHG pricing and confirm its essentially backstop nature. In jurisdictions where Parts 1 and 2 of the GGPPA apply, the primary legal effect is to create one GHG pricing scheme that prices GHG emissions in a manner that is consistent with what is done in the rest of the Canadian economy. Part 1 of the GGPPA directly prices the emissions of certain fuel producers, distributors and importers. Part 2 directly prices the GHG emissions of covered facilities to the extent that they exceed the applicable efficiency standards. The GGPPA does not require those to whom it applies to perform or refrain from performing specified GHG emitting activities. Nor does it tell industries how they are to operate in order to reduce their GHG emissions. Instead, all it does is to require persons to pay for engaging in specified activities that result in the emission of GHGs. The GGPPA leaves individual consumers and businesses free to choose how they will respond, or not, to the price signals sent by the marketplace. The legal effects of the GGPPA are thus centrally aimed at pricing GHG emissions nationally.

Moreover, because the GGPPA operates as a backstop, the legal effects of Parts 1 and 2 of the statute — a federally imposed GHG pricing scheme — apply only if the Governor in Council has listed a province or territory. The GGPPA provides that the Governor in Council may make listing decisions for Parts 1 and 2 of the statute only for the purpose of ensuring that the pricing of greenhouse gas emissions is applied broadly in Canada at levels that the Governor in Council considers appropriate, taking into account, as the primary factor, the stringency of provincial pricing mechanisms for greenhouse gas emissions. As a result, the GHG pricing mechanism described in Parts 1 and 2 of the GGPPA will not come into operation at all in a province or territory that already has a sufficiently stringent GHG pricing system. Not only does this confirm the backstop nature of the GGPPA — that of creating minimum national standards of GHG pricing — but this feature gives legal effect to the federal government's commitment to give the provinces and territories the flexibility to design their own policies to meet emissions reductions targets, including carbon pricing, adapted to each province and territory's specific circumstances, as well as to recognize carbon pricing policies already implemented or in development by provinces and territories.

Although evidence of practical effects is not helpful in this case given the dearth of such evidence, the evidence of practical effects to date is consistent with providing flexibility and support for provincially designed GHG pricing schemes. Practically speaking, the only thing not permitted by the GGPPA is for provinces and territories not to implement a GHG pricing mechanism or one that is not sufficiently stringent.

Applying the threshold question, Canada has adduced evidence that clearly shows that establishing minimum national standards of GHG price stringency to reduce GHG emissions is of sufficient concern to Canada as a whole that it warrants consideration in accordance with the national concern doctrine. The history of efforts to address climate change in Canada reflects the critical role of carbon pricing strategies in policies to reduce GHG emissions. There is also a broad consensus among expert international bodies that carbon pricing is a critical measure for the reduction of GHG emissions. This matter is critical to our response to an existential threat to human life in Canada and around the world. As a result, it passes the threshold test and warrants consideration as a possible matter of national concern.

Minimum national standards of GHG price stringency, which are implemented by means of the backstop architecture of the GGPPA , relate to a federal role in carbon pricing that is qualitatively different from matters of provincial concern. GHGs are a specific and precisely identifiable type of pollutant. The harmful effects of GHGs are known, and the fuel and excess emissions charges are based on the global warming potential of the gases. GHG emissions are also predominantly extraprovincial and international in their character and implications. This flows from their nature as a diffuse atmospheric pollutant and from their effect in causing global climate change. Moreover, the regulatory mechanism of GHG pricing is also specific and limited. GHG pricing operates in a particular way, seeking to change behaviour by internalizing the cost of climate change impacts, incorporating them into the price of fuel and the cost of industrial activity. It is a distinct form of regulation that does not amount to the regulation of GHG emissions generally or encompass regulatory mechanisms that do not involve pricing. The Governor in Council's power to make a regulation that applies the GGPPA 's pricing system to a province may be exercised only if it is first determined that the province's pricing mechanisms are insufficiently stringent. If each province designed its own pricing system and all the provincial systems met the federal pricing standards, the GGPPA would achieve its purpose without operating to directly price GHG emissions anywhere in the country. The GGPPA is tightly focused on this distinctly federal role and does not descend into the detailed regulation of all aspects of GHG pricing.

Provincial inability is established in this case. First, the provinces, acting alone or together, are constitutionally incapable of establishing minimum national standards of GHG price stringency to reduce GHG emissions. While the provinces could choose to cooperatively establish a uniform carbon pricing scheme, doing so would not assure a sustained approach because the provinces and territories are constitutionally incapable of establishing a binding outcome-based minimum legal standard — a national GHG pricing floor — that applies in all provinces and territories at all times. Second, a failure to include one province in the scheme would jeopardize its success in the rest of Canada. The withdrawal of one province from the scheme would clearly threaten its success for two reasons: emissions reductions that are limited to a few provinces would fail to address climate change if they were offset by increased emissions in other Canadian jurisdictions; and any province's failure to implement a sufficiently stringent GHG pricing mechanism could undermine the efficacy of GHG pricing everywhere in Canada because of the risk of carbon leakage. Third, a province's failure to act or refusal to cooperate would have grave consequences for extraprovincial interests. It is well established that climate change is causing significant environmental, economic and human harm nationally and internationally, with especially high impacts in the Canadian Arctic, coastal regions and on Indigenous peoples.

Although the matter has a clear impact on provincial jurisdiction, its impact on the provinces' freedom to legislate and on areas of life that would fall under provincial heads of power is qualified and limited. First, the matter is limited to GHG pricing of GHG emissions — a narrow and specific regulatory mechanism. If a province fails to meet the minimum national standards, the GGPPA imposes a backstop pricing system, but only to the extent necessary to remedy the deficiency in provincial regulation to address the extraprovincial and international harm that might arise from the province's failure to act or to set sufficiently stringent standards. Second, the matter's impact on areas of life that would generally fall under provincial heads of power is also limited. The discretion of the Governor in Council is necessary in order to ensure that some provinces do not subordinate or unduly burden the other provinces through their unilateral choice of standards. Although this restriction may interfere with a province's preferred balance between economic and environmental considerations, it is necessary to consider the interests that would be harmed — owing to irreversible consequences for the environment, for human health and safety and for the economy — if Parliament were unable to constitutionally address the matter at a national level. This irreversible harm would be felt across the country and would be borne disproportionality by vulnerable communities and regions in Canada. The impact on those interests justify the limited constitutional impact on provincial jurisdiction.

As a final matter, the fuel and excess emission charges imposed by the GGPPA have a sufficient nexus with the regulatory scheme to be considered constitutionally valid regulatory charges. To be a regulatory charge, as opposed to a tax, a governmental levy with the characteristics of a tax must be connected to a regulatory scheme. The first step is to identify the existence of a relevant regulatory scheme; if such a scheme is found to exist, the second step is to establish a relationship between the charge and the scheme itself. Influencing behaviour is a valid purpose for a regulatory charge and regulatory charges need not reflect the cost of the scheme. The amount of a regulatory charge whose purpose is to alter behaviour is set at a level designed to proscribe, prohibit, or lend preference to a behaviour. Limiting such a charge to the recovery of costs would be incompatible with the design of a scheme of this nature. Nor must the revenues that are collected be used to further the purposes of the regulatory scheme. Rather, the required nexus with the scheme will exist where the charges themselves have a regulatory purpose. There is ample evidence that the fuel and excess emission charges imposed by Parts 1 and 2 of the GGPPA have a regulatory purpose. They cannot be characterized as taxes; rather, they are regulatory charges whose purpose is to advance the GGPPA 's regulatory purpose by altering behaviour.

Per Côté J. (dissenting in part): There is agreement with the majority with respect to the formulation of the national concern test. There is also agreement that Parliament has the power to enact constitutionally valid legislation establishing minimum national standards of price stringency to reduce GHG emissions. However, the GGPPA is, in its current form, unconstitutional. It cannot be said to accord with the matter of national concern formulated by the majority because the breadth of the discretion that it confers on the Governor in Council results in no meaningful limits on the power of the executive. Minimum standards are set by the executive, not the GGPPA . Additionally, the provisions in the GGPPA that permit the Governor in Council to amend and override the GGPPA violate the Constitution Act, 1867 , and the fundamental constitutional principles of parliamentary sovereignty, rule of law and the separation of powers. Clauses that purport to confer on the executive branch the power to nullify or amend Acts of Parliament are unconstitutional.

The GGPPA , as it is currently written, vests inordinate discretion in the executive with no meaningful checks on fundamental alterations of the current pricing scheme. The critical feature of the fuel levy established in Part 1, that being what fuels are covered under the GGPPA , is so open-ended, allowing any substance, if prescribed by the Governor in Council, to fall within the ambit of the fuel charge regime. The operative provisions of Part 1 similarly prescribe vast law-making power to the executive such that the very nature of the regime can be altered. The full breadth of executive powers can be seen most notably within ss. 166 and 168. The only limit whatsoever on the expansive regulation-making powers set out in s. 166 is that, in amending Part 1 of Schedule 1 to modify the list of provinces where the fuel levy is payable, the Governor in Council shall take into account, as the primary factor, the stringency of provincial pricing mechanisms for GHGs (s. 166(3)). No such factor applies to the Governor in Council's regulation-making powers under Part 1's provisions, thus, by virtue of s. 166(4), the executive has a wholly-unfettered ability to amend Part 1 of the GGPPA . Sections 168(2) and (3) also allow the Governor in Council to make and amend regulations in relation to the fuel charge system, its application, and its implementation. These wide-ranging powers set forth a wholly-unfettered grant of broad discretion to amend Part 1. Most notably, s. 168(4) states that in the event of a conflict between the statute enacted by Parliament and the regulations made by the executive, the regulation prevails to the extent of the conflict. This breathtaking power circumvents the exercise of law-making power by the legislative branch by permitting the executive to amend by regulation the very statute which authorizes the regulation.

Further, it is clear from a review of Part 2's provisions that the broad powers accorded to the executive permit the Governor in Council to regulate GHG emissions broadly or regulate specific industries in other ways than by setting GHG emissions limits and pricing excess emissions across the country, despite the majority's assertion to the contrary. The sole limit on the executive's expansive discretion found in Part 2, similar to Part 1, is in s. 189(2): when amending Part 2 of Schedule 1 to modify the list of provinces where the output-based pricing system applies, the Governor in Council shall take into account, as the primary factor, the stringency of provincial pricing mechanisms for GHGs. Again, as in Part 1, no such factor applies to the Governor in Council's regulation-making powers under Part 2's provisions. There is agreement with Brown and Rowe JJ. that Part 2's skeletal framework accords the executive vast discretion to unilaterally set standards on an industry-by-industry basis, creating the potential for differential treatment of industries at the executive's whim.

Therefore, minimum standards are set by the executive, not the GGPPA . Accordingly, the GGPPA cannot be said to establish national standards of price stringency because there is no meaningful limit to the power of the executive. Rather than establishing minimum national standards, Part 2 empowers the executive to establish variable and inconsistent standards on an industry-by-industry basis. The fact that the executive is permitted to place a number of conditions on individuals and industries at any time, and is moreover allowed to revise those conditions at any time to any extent, is untenable. The GGPPA , as it is currently written, employs a discretionary scheme that knows no bounds. While it is agreed that a matter which is restricted to minimum national GHG pricing stringency standards properly fits within federal authority, the GGPPA does not reflect this crucial restriction.

Moreover, certain parts of the GGPPA are so inconsistent with our system of democracy that they are independently unconstitutional. Sections 166(2) , 166(4) and 192 all confer on the Governor in Council the power to amend parts of the GGPPA . Section 168(4) confers the power to adopt secondary legislation that is inconsistent with Part 1 of the Act . Executive power to amend or repeal provisions in primary legislation raises serious constitutional concerns.

Sections 17 and 91 of the Constitution Act, 1867 , both affirm that the authority to legislate is exclusively exercisable by the Queen, with the advice and consent of the Senate and the House of Commons. This means that every exercise of the federal legislative power must have the consent of all three elements of Parliament. The fundamental principles of the Constitution support this reading of ss. 17 and 19 .

First, although Parliamentary sovereignty could appear to support Parliament's ability to delegate whatever they want to whomever they wish, this is not the case. Parliamentary sovereignty contains both a positive and negative aspect. The positive aspect is that Parliament has the ability to create any law. The negative aspect, however, is that no institution is competent to override the requirements of an Act of Parliament. Henry VIII clauses, as found in the GGPPA , run afoul of the negative aspect of parliamentary sovereignty, as they give the executive the authority to override the requirements of primary legislation and create a contradiction within an Act by simultaneously requiring the executive to do something and authorizing the executive to defy that requirement. Henry VIII clauses are also incompatible with the conception of parliamentary sovereignty that demands an impartial, independent and authoritative body to interpret Parliament's acts, as they limit the availability of judicial review by providing no meaningful limits against which a court could review.

Second, the rule of law, which provides a shield for individuals from arbitrary state action, requires that all legislation be enacted in the manner and form prescribed by law. This includes the requirements that legislation receive three readings in the Senate and House of Commons and that it receive Royal Assent. When the Governor in Council amends legislation, it does not follow this prescribed manner and thus violates the rule of law. There are other additional rule of law concerns with the delegation of legislative power to the executive: the delegation of power to amend a statute is generally regarded as objectionable for the reason that the text of the statute is then not to be found in the statute book, which gives rise to confusion and uncertainty; Henry VIII clauses endow the executive with authority to act arbitrarily by permitting it to act contrary to the empowering statute, creating an authority without meaningful limits enforceable through judicial review and thus an absolute discretion; and given that judicial review is constitutionally required, legislation cannot oust review, either expressly or implicitly.

I. Overview

[ 1 ] In 2018, Parliament enacted the Greenhouse Gas Pollution Pricing Act , S.C. 2018, c. 12, s. 186 (" GGPPA "). Three provinces challenged the constitutionality of the GGPPA by references to their respective courts of appeal. The question divided the courts. In split decisions, the courts of appeal for Saskatchewan and Ontario held that the GGPPA is constitutional, while the Court of Appeal of Alberta held that it is unconstitutional. Those decisions have now been appealed to this Court.

[ 2 ] The essential factual backdrop to these appeals is uncontested. Climate change is real. It is caused by greenhouse gas emissions resulting from human activities, and it poses a grave threat to humanity's future. The only way to address the threat of climate change is to reduce greenhouse gas emissions. In the Paris Agreement , U.N. Doc. FCCC/CP/2015/10/Add.1, December 12, 2015, states around the world undertook to drastically reduce their greenhouse gas emissions in order to mitigate the effects of climate change. In Canada, Parliament enacted the GGPPA as part of the country's effort to implement its commitment.

[ 3 ] However, none of these facts answer the question in these appeals. The issue here is whether Parliament had the constitutional authority to enact the GGPPA . To answer this question, the Court must identify the true subject matter of the GGPPA and then classify that subject matter with reference to the division of powers set out in the Constitution Act, 1867 ("Constitution"). In doing so, the Court must give effect to the principle of federalism, a foundational principle of the Canadian Constitution, which requires that an appropriate balance be maintained between the powers of the federal government and those of the provinces.

[ 4 ] Below, I conclude that the GGPPA sets minimum national standards of greenhouse gas price stringency to reduce greenhouse gas emissions, pollutants that cause serious extraprovincial harm. Parliament has jurisdiction to enact this law as a matter of national concern under the "Peace, Order, and good Government" clause of s. 91 of the Constitution . National concern is a well-established but rarely applied doctrine of Canadian constitutional law. The application of this doctrine is strictly limited in order to maintain the autonomy of the provinces and respect the diversity of Confederation, as is required by the principle of federalism. However, Parliament has the authority to act in appropriate cases, where there is a matter of genuine national concern and where the recognition of that matter is consistent with the division of powers. In this case, Parliament has acted within its jurisdiction.

[ 5 ] I also conclude that the levies imposed by the GGPPA are constitutionally valid regulatory charges. In the result, the GGPPA is constitutional.

II. Reference Question

[ 6 ] The reference question in each of the three appeals is substantially the same: Is the Greenhouse Gas Pollution Pricing Act unconstitutional in whole or in part?

III. Background

A. The Global Climate Crisis

[ 7 ] Global climate change is real, and it is clear that human activities are the primary cause. In simple terms, the combustion of fossil fuels releases greenhouse gases ("GHGs") into the atmosphere, and those gases trap solar energy from the sun's incoming radiation in the atmosphere instead of allowing it to escape, thereby warming the planet. Carbon dioxide is the most prevalent and recognizable GHG resulting from human activities. Other common GHGs include methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride and nitrogen trifluoride.

[ 8 ] At appropriate levels, GHGs are beneficial, keeping temperatures around the world at levels at which humans, animals, plants and marine life can live in balance. And the level of GHGs in the atmosphere has been relatively stable over the last 400,000 years. Since the 1950s, however, the concentrations of GHGs in the atmosphere have increased at an alarming rate, and they continue to rise. As a result, global surface temperatures have already increased by 1.0°C above pre-industrial levels, and that increase is expected to reach 1.5°C by 2040 if the current rate of warming continues.

[ 9 ] These temperature increases are significant. As a result of the current warming of 1.0°C, the world is already experiencing more extreme weather, rising sea levels and diminishing Arctic sea ice. Should warming reach or exceed 1.5°C, the world could experience even more extreme consequences, including still higher sea levels and greater loss of Arctic sea ice, a 70 percent or greater global decline of coral reefs, the thawing of permafrost, ecosystem fragility and negative effects on human health, including heat-related and ozone-related morbidity and mortality.

[ 10 ] The effects of climate change have been and will be particularly severe and devastating in Canada. Temperatures in this country have risen by 1.7°C since 1948, roughly double the global average rate of increase, and are expected to continue to rise faster than that rate. Canada is also expected to continue to be affected by extreme weather events like floods and forest fires, changes in precipitation levels, degradation of soil and water resources, increased frequency and severity of heat waves, sea level rise, and the spread of potentially life-threatening vector-borne diseases like Lyme disease and West Nile virus.

[ 11 ] The Canadian Arctic faces a disproportionately high risk from climate change. There, the average temperature has increased at a rate of nearly three times the global average, and that increase is causing significant reductions in sea ice, accelerated permafrost thaw, the loss of glaciers and other ecosystem impacts. Canada's coastline, the longest in the world, is also being affected disproportionately by climate change, as it experiences changes in relative sea level and rising water temperatures, as well as increased ocean acidity and loss of sea ice and permafrost. Climate change has also had a particularly serious effect on Indigenous peoples, threatening the ability of Indigenous communities in Canada to sustain themselves and maintain their traditional ways of life.

[ 12 ] Climate change has three unique characteristics that are worth noting. First, it has no boundaries; the entire country and entire world are experiencing and will continue to experience its effects. Second, the effects of climate change do not have a direct connection to the source of GHG emissions. Provinces and territories with low GHG emissions can experience effects of climate change that are grossly disproportionate to their individual contributions to Canada's and the world's total GHG emissions. In 2016, for example, Alberta, Ontario, Quebec, Saskatchewan and British Columbia accounted for approximately 90.5 percent of Canada's total GHG emissions, while the approximate percentages were 9.1 percent for the other five provinces and 0.4 percent for the territories. Yet the effects of climate change are and will continue to be experienced across Canada, with heightened impacts in the Canadian Arctic, coastal regions and Indigenous territories. Third, no one province, territory or country can address the issue of climate change on its own. Addressing climate change requires collective national and international action. This is because the harmful effects of GHGs are, by their very nature, not confined by borders.

B. Canada's Efforts to Address Climate Change

[ 13 ] Canada's history of international commitments to address climate change began in 1992 with its ratification of the United Nations Framework Convention on Climate Change , U.N. Doc. A/AC.237/18 (Part II)/Add.1, May 15, 1992 (" UNFCCC "). After failing to meet its commitments under multiple UNFCCC agreements, including the Kyoto Protocol , U.N. Doc. FCCC/CP/1997/L.7/Add.1, December 10, 1997, and the Copenhagen Accord , U.N. Doc. FCCC/CP/2009/11/Add.1, December 18, 2009, Canada agreed to the Paris Agreement in 2015. Recognizing that "climate change represents an urgent and potentially irreversible threat to human societies and the planet and thus requires the widest possible cooperation by all countries", the participating states agreed to hold the global average temperature increase to well below 2.0°C above pre-industrial levels and to pursue efforts to limit that increase to 1.5°C: United Nations, Framework Convention on Climate Change, Report of the Conference of the Parties on its twenty-first session , U.N. Doc. FCCC/CP/2015/10/Add.1, January 29, 2016, at p. 2; Paris Agreement , art. 2(1)(a). Canada ratified the Paris Agreement in 2016, and the agreement entered into force that same year. Canada committed to reducing its GHG emissions by 30 percent below 2005 levels by 2030.

[ 14 ] Under the Paris Agreement , states are free to choose their preferred approaches for meeting their nationally determined contributions. In Canada, the provinces and the federal government agreed to work together in order to meet the country's international commitments. In March 2016, before Canada had ratified the Paris Agreement , all the First Ministers met in Vancouver and adopted the Vancouver Declaration on clean growth and climate change (" Vancouver Declaration "): Canadian Intergovernmental Conference Secretariat, March 3, 2016 (online). In that declaration, the First Ministers recognized the call in the Paris Agreement for significant reductions in GHG emissions and committed to "[i]mplement[ing] GHG mitigation policies in support of meeting or exceeding Canada's 2030 target of a 30% reduction below 2005 levels of emissions, including specific provincial and territorial targets and objectives": ibid , at p. 3. In the Vancouver Declaration , the First Ministers also recognized the importance of a collaborative approach between provincial and territorial governments and the federal government to reducing GHG emissions and noted that "the federal government has committed to ensuring that the provinces and territories have the flexibility to design their own policies to meet emission reductions targets": ibid .

[ 15 ] The Vancouver Declaration resulted in the establishment of a federal-provincial-territorial Working Group on Carbon Pricing Mechanisms ("Working Group") to study the role of carbon pricing mechanisms in meeting Canada's emissions reduction targets. The Working Group included at least one representative from each provincial and territorial government as well as the federal government. Its final report identified carbon pricing as one of the most efficient policy approaches for reducing GHG emissions and outlined three carbon pricing options: (1) a single form broad-based carbon pricing mechanism that would apply across Canada, an option that would not be supportive of existing or planned provincial or territorial pricing policies; (2) broad-based carbon pricing mechanisms across Canada, an option that would give each province and territory flexibility as to the choice of instruments; and (3) a range of broad-based carbon pricing mechanisms in some jurisdictions, while the remaining jurisdictions would implement other mechanisms or policies designed to meet GHG emissions reduction targets within their borders: Final Report , 2016 (online), at pp. 1, 44-47 and 50.

[ 16 ] Carbon pricing, or GHG pricing, is a regulatory mechanism that, in simple terms, puts a price on GHG emissions in order to induce behavioural changes that will lead to widespread reductions in emissions. By putting a price on GHG emissions, governments can incentivize individuals and businesses to change their behaviour so as to make more environmentally sustainable purchasing and consumption choices, to redirect their financial investments, and to reduce their GHG emissions by substituting carbon-intensive goods for low-GHG alternatives. Generally speaking, there are two different approaches to GHG pricing: (1) a carbon tax that entails setting a price on GHG emissions directly, but not setting a cap on emissions; and (2) a cap-and-trade system that prices emissions indirectly by placing a cap on GHG emissions, allocating emission permits to businesses and allowing businesses to buy and sell emission permits from and to other businesses. A carbon tax sets an effective price per unit of GHG emissions. In a cap-and-trade system, the market sets an effective price per unit of GHG emissions, but a cap is placed on permitted emissions. Both approaches put a price on GHG emissions. I also find it worthwhile to note that while "carbon tax" is the term used among policy experts to describe GHG pricing approaches that directly price GHG emissions, it has no connection to the concept of taxation as understood in the constitutional context.

[ 17 ] Building on the Working Group's final report, the federal government released the Pan-Canadian Approach to Pricing Carbon Pollution (" Pan-Canadian Approach ") in October 2016: Environment and Climate Change Canada, October 3, 2016 (online) . In it, the federal government introduced a pan-Canadian benchmark for carbon pricing and stated the benchmark's underlying principles, two of which were that carbon pricing should be a central component of the pan-Canadian framework and that the overall approach should be flexible and recognize carbon pricing policies already being implemented or developed by provinces and territories. The Pan-Canadian Approach also set out the criteria for the pan-Canadian benchmark that would be used for determining acceptable minimum carbon pricing systems. Provinces and territories would have the flexibility to implement, by 2018, one of two carbon pricing systems with a common broad scope and legislated increases in stringency. A federal backstop carbon pricing system would be implemented in jurisdictions that either requested it or failed to implement a system that met the benchmark.

[ 18 ] In December 2016, based on the Pan-Canadian Approach , the federal government released the Pan-Canadian Framework on Clean Growth and Climate Change (" Pan-Canadian Framework "): Environment and Climate Change Canada, December 9, 2016 (online). In it, the federal government reaffirmed the principles expounded in the Vancouver Declaration and the Pan-Canadian Approach , and outlined in greater detail the criteria of the pan‑Canadian benchmark for carbon pricing. As in the Pan ‑ Canadian Approach , the Pan-Canadian Framework required every province and territory to have one of two carbon pricing systems in place by 2018: a carbon tax or carbon levy system similar to the ones that had already been implemented in British Columbia and Alberta, or a cap-and-trade system similar to the ones that had been implemented in Ontario and Quebec. All carbon pricing systems had to have a common broad scope and to increase in stringency over time. All revenues from the carbon pricing system would remain in the jurisdiction of origin. A federal backstop pricing system would apply only in jurisdictions that requested it, that had no carbon pricing system or that had an insufficiently stringent carbon pricing system. All revenues from the federal system would be returned to the jurisdiction of origin.

[ 19 ] On the day the federal government released the Pan-Canadian Framework , it was adopted by eight provinces, including Ontario and Alberta, and by all three territories. Manitoba adopted the framework in February 2018, but Saskatchewan has not done so yet. Later in 2018, Ontario, Alberta and Manitoba withdrew their support from the Pan-Canadian Framework .

[ 20 ] In May 2017, after the release of the Pan-Canadian Framework , the federal government published the Technical Paper on the Federal Carbon Pricing Backstop : Environment and Climate Change Canada, May 18, 2017 (online). This paper provided further details, outlined the components of the proposed federal carbon pricing system and sought feedback from stakeholders. The federal government then published documents entitled Guidance on the pan-Canadian carbon pollution pricing benchmark , in August 2017, and Supplemental benchmark guidance , in December 2017, which further detailed the scope of the GHG emissions to which the carbon pricing system would apply as well as the minimum legislated increases in stringency: Environment and Climate Change Canada, Guidance on the pan-Canadian carbon pollution pricing benchmark , August 2017 (online); Environment and Climate Change Canada, Supplemental benchmark guidance , December 20, 2017 (online).

[ 21 ] On the day the Supplemental benchmark guidance document was released, the federal Minister of Finance and Minister of Environment and Climate Change wrote to their provincial and territorial counterparts to reaffirm Canada's commitment to carbon pricing under the Pan-Canadian Framework . The letter requested the provincial and territorial ministers to explain how they would be implementing carbon pricing and also outlined the next steps in the federal government's process to price carbon.

[ 22 ] In the context of this process, the GGPPA was introduced in Parliament as Part 5 of Bill C-74, An Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures , 1st Sess., 42nd Parl., on March 27, 2018, and it received royal assent on June 21, 2018. In the lead-up to the introduction of the GGPPA , the federal government had published further guidance on the components of the proposed federal carbon pricing system.

C. Provincial Action on Climate Change

[ 23 ] At the time the Pan-Canadian Framework was released, most of the provinces and territories had already taken significant actions to address climate change, including rehabilitating forests, developing low carbon fuels, capping emissions for oil sands projects and the electricity sector, regulating methane emissions, closing fossil‑fuelled and coal-fired electricity generating stations, and investing in renewable energy and transportation. British Columbia, Alberta, Ontario and Quebec were the only provinces with carbon pricing systems. All the other provinces and territories, except Saskatchewan and Manitoba, had indicated that they planned to implement either a carbon tax or levy system or a cap-and-trade system.

[ 24 ] Despite the actions that had been taken, Canada's overall GHG emissions had decreased by only 3.8 percent between 2005 and 2016, which was well below its target of 30 percent by 2030. Over that period, GHG emissions had decreased in British Columbia, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Yukon, but had increased in Alberta, Saskatchewan, Manitoba, Newfoundland and Labrador, Northwest Territories and Nunavut. Illustrative of the collective action problem of climate change, between 2005 and 2016, the decreases in GHG emissions in Ontario, Canada's second largest GHG emitting province, were mostly offset by increases in emissions in two of Canada's five largest emitting provinces, Alberta and Saskatchewan. Canada's remaining emissions reduction between 2005 and 2016 came from two of Canada's remaining five largest emitting provinces, Quebec and British Columbia, as well as from decreases in GHG emissions of over 10 percent — well above Canada's 3.8 percent overall GHG emissions reduction — in New Brunswick, Nova Scotia, Prince Edward Island and Yukon.

IV. The GGPPA

[ 25 ] The GGPPA came into force on June 21, 2018.

A. Basic Architecture of the GGPPA

[ 26 ] The GGPPA comprises four parts and four schedules. Part 1 of the GGPPA establishes a fuel charge that applies to producers, distributors and importers of various types of carbon-based fuel. Part 2 sets out a pricing mechanism for industrial GHG emissions by large emissions-intensive industrial facilities. Part 3 authorizes the Governor in Council to make regulations providing for the application of provincial law concerning GHG emissions to federal works and undertakings, federal land and Indigenous land located in that province, as well as to internal waters located in or contiguous with the province. And Part 4 requires the Minister of the Environment to prepare an annual report on the administration of the GGPPA and have it tabled in Parliament. Only the first two parts and the four schedules are at issue in these appeals. The parties do not challenge the constitutionality of Parts 3 and 4 of the GGPPA .

[ 27 ] Because the GGPPA operates as a backstop, the GHG pricing mechanism described in Parts 1 and 2 of the GGPPA does not automatically apply in all provinces and territories. A province or territory will only be subject to Part 1 or 2 of the GGPPA if the Governor in Council determines that its GHG pricing mechanism is insufficiently stringent. However, the GGPPA itself always applies in the sense that provincial and territorial GHG pricing mechanisms are always subject to assessment to ensure they are sufficiently stringent. At the time of the hearing of these appeals, Ontario, New Brunswick, Manitoba, Saskatchewan, Yukon and Nunavut were subject to both Parts 1 and 2 of the GGPPA . Alberta was subject only to Part 1, and Prince Edward Island only to Part 2. After the hearing, the GGPPA was amended such that Part 1 no longer applies to New Brunswick: Regulations Amending Part 1 of Schedule 1 and Schedule 2 to the Greenhouse Gas Pollution Pricing Act and the Fuel Charge Regulations , SOR/2020‑261. The federal government has also announced that Ontario will be subject only to Part 1, but the GGPPA has not yet been amended to reflect this announcement.

B. The Preamble

[ 28 ] The GGPPA has a 16-paragraph preamble that sets out the background to and purpose of the legislation. This preamble can helpfully be divided into five parts in which the following points are articulated: (1) GHG emissions contribute to global climate change, and that change is already affecting Canadians and poses a serious risk to the environment, to human health and safety and to economic prosperity both in Canada and internationally (at paras. 1-5); (2) Canada has committed internationally to reducing its GHG emissions by ratifying the UNFCCC and the Paris Agreement (at paras. 6-8); (3) it is recognized in the Pan-Canadian Framework that climate change requires immediate action by the federal, provincial and territorial governments, and GHG pricing is a core element of that framework (at paras. 9-10); (4) behavioural change that leads to increased energy efficiency is necessary to take effective action against climate change (at para. 11); and (5) the purpose of the GGPPA is to implement stringent pricing mechanisms designed to reduce GHG emissions by creating incentives for that behavioural change (paras. 12-16).

[ 29 ] In the fifth part of the preamble, it is recognized that some provinces are developing or have implemented GHG pricing systems: para. 14. However, it is also acknowledged that the absence of such systems in some provinces and a lack of stringency in some provincial pricing systems could contribute to significant harm to the environment, to human health and safety and to economic prosperity: para. 15. The preamble concludes with a statement that it is accordingly necessary to create a federal GHG pricing system in order to ensure that GHG pricing applies broadly in Canada: para. 16.

C. Part 1: Fuel Charge

[ 30 ] Part 1 of the GGPPA establishes a charge on prescribed types of fuel that applies to fuel produced, delivered or used in a listed province, fuel brought into a listed province from another place in Canada and fuel imported into Canada at a location in a listed province: ss. 17(1), 18(1), 19(1) and (2) and 21(1). Part 1 of Sch. 1 contains the list of provinces to which Part 1 of the GGPPA applies. The fuel charge applies to 22 types of carbon-based fuel that release GHG emissions when burned, including gasoline, diesel fuel and natural gas, as well as to combustible waste. Schedule 2 lists the types of fuel to which the fuel charge applies and indicates the applicable rates of charge for each one. Although the fuel charge is paid by fuel producers, distributors and importers, and not directly by consumers, it is anticipated that retailers will pass the fuel charge on to consumers in the form of higher energy prices. The fuel charge is not payable on qualifying fuel delivered to farmers and fishers (s. 17(2)) or on fuel used at prescribed facilities, including industrial facilities to which the pricing mechanism in Part 2 of the GGPPA applies ( ss. 3 and 18(4) ). The fuel charge is administered by the Minister of National Revenue acting through the Canada Revenue Agency.

[ 31 ] Section 165 of the GGPPA concerns the distribution of the proceeds of the fuel charge. Section 165(2) provides that the Minister of National Revenue must distribute the amount collected in respect of the fuel charge in any listed province less amounts that are rebated, refunded or remitted in respect of those charges, but that the Minister of National Revenue has discretion whether to distribute the net amount to the province itself, other prescribed persons or classes of persons or a combination of the two. The federal government's present policy is to give 90 percent of the proceeds of the fuel charge directly to residents of the province of origin in the form of "Climate Action Incentive" payments under the Income Tax Act , R.S.C. 1985, c. 1 (5th Supp.), as provided for in s. 13 of the Budget Implementation Act, 2018, No. 2 , S.C. 2018, c. 27. The Climate Action Incentive is a deemed rebate under the GGPPA that reduces the amount that must be distributed under s. 165 : Income Tax Act , s. 122.8(6). The remaining 10 percent of the proceeds is paid out to schools, hospitals, colleges and universities, municipalities, not-for-profit organizations, Indigenous communities and small and medium-sized businesses in the province of origin. Simply put, the net amount collected from a listed province is returned to persons and entities in that province.

[ 32 ] Part 1 of the GGPPA also provides the Governor in Council with considerable power to make regulations. For example, s. 166 authorizes the Governor in Council to make regulations to list or delist provinces in relation to the application of the fuel charge under Part 1 of the GGPPA . Any such regulations must be made "[f]or the purpose of ensuring that the pricing of greenhouse gas emissions is applied broadly in Canada at levels that the Governor in Council considers appropriate" (s. 166(2)), and the Governor in Council must, in making them"take into account, as the primary factor, the stringency of provincial pricing mechanisms for greenhouse gas emissions" (s. 166(3)).

[ 33 ] In addition, the Governor in Council is authorized to make regulations prescribing anything that is to be prescribed or determined by regulation under Part 1: s. 166(1)(a). Specifically, the Governor in Council can make regulations in relation to the fuel charge system (s. 168(2)) by, for example, modifying the listed types of fuel and the applicable rates of charge in Sch. 2 (ss. 166(4) and 168(3)(a)), or defining words or expressions used in Part 1 of the GGPPA , in Part 1 of Sch. 1, or in Sch. 2 (s. 168(3)(a) and (b)). In the event of a conflict between a regulation and Part 1 of the GGPPA , s. 168(4) provides that the regulation prevails to the extent of the conflict.

D. Part 2: Industrial Greenhouse Gas Emissions

[ 34 ] Part 2 of the GGPPA establishes an output-based pricing system ("OBPS") for industrial GHG emissions by large emissions-intensive industrial facilities. The OBPS applies only to a "covered facility" in a province listed in Part 2 of Sch. 1: ss. 169 and 174. Covered facilities include facilities that meet the criteria set out in the Output-Based Pricing System Regulations , SOR/2019-266 (" OBPS Regulations "): GGPPA , s. 169. Under the OBPS Regulations , a covered facility is one that meets a specified emissions threshold and is engaged in specific industrial activities: s. 8 . The Minister of the Environment may also, upon request, designate an industrial facility located in a backstop jurisdiction (i.e., one listed in Part 2 of Sch. 1) as a covered facility even if it does not meet the criteria in the regulations: GGPPA , s. 172. A covered facility is exempt from the fuel charge ( ss. 18(3) and 18(4) ), but it must pay for any GHG emissions that exceed its applicable emissions limits on the basis of sector-specific output-based standards. This can be done in one of three ways: (1) by remitting surplus compliance units earned by the facility at a time when its GHG emissions were below its annual limit, or surplus credits purchased from other facilities; (2) paying an excess emissions charge; or (3) a combination of the two (ss. 174(1) and (2) and 175 ). The OBPS Regulations require that a covered facility's emissions limit be generally calculated on the basis of the facility's production from each industrial activity and an output-based emissions standard in respect of that activity expressed in units of emissions per unit of product: s. 36 ; Sch. 1. If the efficiency of a facility's industrial processes meets the applicable efficiency standards, the facility will not exceed its emissions limit. It is only where an industrial process is not sufficiently efficient in terms of its production per unit of emissions that a person responsible for a covered facility must provide compensation for the facility's excess emissions. A facility whose efficiency exceeds the standards earns surplus credits: GGPPA , s. 175. Schedule 3 lists 33 GHGs and sets out the global warming potential of each one as defined in accordance with the OBPS, while Sch. 4 sets out the charges for excess emissions. The OBPS is administered by the Minister of the Environment.

[ 35 ] Section 188 of the GGPPA , which concerns the distribution of revenues from excess emission charge payments, works similarly to s. 165 of Part 1. Section 188(1) provides that the Minister of National Revenue must distribute all revenues from excess emissions charge payments, but that the Minister has discretion whether to distribute them to the province itself, to persons specified in the regulations or that meet criteria set out in the regulations, or to a combination of both. The federal government has indicated that these revenues will be used to support carbon pollution reduction in the jurisdictions in which they were collected, but has not yet provided further details.

[ 36 ] Part 2 of the GGPPA — like Part 1 — also provides the Governor in Council with considerable power to make regulations and orders. For example, s. 189 authorizes the Governor in Council to make orders to list or delist provinces in relation to the application of the OBPS in Part 2 of the GGPPA . As with s. 166 , any such order must be made "[f]or the purpose of ensuring that the pricing of greenhouse gas emissions is applied broadly in Canada at levels that the Governor in Council considers appropriate" (s. 189(1)), and the Governor in Council must, in making it"take into account, as the primary factor, the stringency of provincial pricing mechanisms for greenhouse gas emissions" (s. 189(2)).

[ 37 ] As well, the Governor in Council is authorized to make orders adding GHGs to, or deleting them from, Sch. 3 or amending the global warming potential of any gas; in doing so, the Governor in Council may take into account any factor it considers appropriate: ss. 190(1) and (2). The Governor in Council also has the authority to amend Sch. 4 by amending an excess emissions charge or by adding calendar years: s. 191. Finally, the Governor in Council is authorized to make regulations pertaining to a number of aspects of the OBPS, including covered facilities, GHG emissions limits, the quantification of GHGs, the circumstances under which GHGs are deemed to have been emitted by a facility, compensation, and permitted transfers of compliance units: s. 192.

[ 38 ] It is important to understand that Parts 1 and 2 of the GGPPA together create a single GHG pricing scheme. Part 1 of the GGPPA directly prices GHG emissions. The OBPS created by the OBPS Regulations made under Part 2 of the GGPPA constitutes a complex exemption to Part 1. The OBPS exempts covered facilities from the blunt fuel charge under Part 1, creating a more tailored GHG pricing scheme that lowers the effective GHG price such facilities would otherwise have to pay under Part 1. Part 2 thus also directly prices GHG emissions, but only to the extent that covered facilities exceed applicable efficiency standards. Parts 1 and 2 of the GGPPA therefore function together to price GHG emissions throughout the Canadian economy.

V. Judicial History

A. Court of Appeal for Saskatchewan, 2019 SKCA 40, 440 D.L.R. (4th) 398

[ 39 ] The majority of the Court of Appeal for Saskatchewan (Richards C.J.S., Jackson and Schwann JJ.A.) concluded that the GGPPA is intra vires Parliament on the basis of the national concern doctrine. The majority identified the pith and substance of the GGPPA as "the establishment of minimum national standards of price stringency for GHG emissions": para. 125. Applying the framework from R. v. Crown Zellerbach Canada Ltd. , [1988] 1 S.C.R. 401, they found that the establishment of minimum national standards of price stringency for GHG emissions is a matter of national concern. This matter is of genuine national importance and has the requisite singleness, distinctiveness and indivisibility. GHGs are readily identifiable and distinguishable from other gases, and minimum pricing standards are distinguishable from other forms of regulation. Each province is vulnerable to another province's failure to adequately price GHG emissions. Interprovincial cooperation could not be a basis for a sustainable approach to minimum GHG pricing, because provinces are free to withdraw from cooperative arrangements. As well, recognizing federal authority over minimum national standards of price stringency for GHG emissions would have an acceptable impact on provincial jurisdiction, because it would limit Parliament's role to pricing and would not threaten the constitutional validity of provincial initiatives to regulate GHGs.

[ 40 ] Ottenbreit and Caldwell JJ.A. dissented. They concluded that Part 1 of the GGPPA is the result of an unconstitutional exercise of Parliament's taxation power and that the GGPPA as a whole is ultra vires Parliament. GHG emissions do not represent a constitutionally distinct matter, and the concepts of "stringency" and "national standards" should not be used to tease an abstraction out of recognizable matters within provincial jurisdiction. The asserted need for a national standard of stringency is based not on a genuine provincial inability to set such a standard, but simply on a policy dispute. Finally, the dissent concluded that the matter's scale of impact on provincial jurisdiction is not reconcilable with the balance of federalism. The GGPPA would deprive provinces of the ability to regulate GHGs within their borders. Furthermore, it would be possible for the power delegated to the executive branch by the GGPPA to be exercised so as to widen the scope of the statute, thus further eroding provincial authority.

B. Court of Appeal for Ontario, 2019 ONCA 544, 146 O.R. (3d) 65

[ 41 ] The majority of the Court of Appeal for Ontario (Strathy C.J.O., MacPherson and Sharpe JJ.A.) concluded that the GGPPA is intra vires Parliament on the basis of the national concern doctrine. The majority characterized the pith and substance of the GGPPA as "establishing minimum national standards to reduce greenhouse gas emissions": para. 77. Applying the framework from Crown Zellerbach , they reasoned that this matter is new as it was not recognized at Confederation. It is a matter of national concern, as evidenced by the GGPPA 's relationship to Canada's international obligations and by the fact that the statute was the product of extensive efforts to achieve a national response to climate change. The matter meets the singleness, distinctiveness and indivisibility requirement. GHGs are a chemically distinct form of pollution with international and interprovincial impacts. The provinces cannot establish minimum national standards to reduce GHG emissions. No province can control the deleterious effects of GHGs emitted in other provinces or require other provinces to take steps to do so. In assessing the matter's scale of impact on provincial jurisdiction, the majority found that the GGPPA strikes an appropriate balance between Parliament and the provincial legislatures. Finally, the majority rejected the Attorney General of Ontario's argument that the levies imposed by the GGPPA are unconstitutional regulatory charges. The majority found the levies to be valid because they have a sufficient connection to the regulatory scheme based on their purpose of behaviour modification.

[ 42 ] Hoy A.C.J.O. concurred with Strathy C.J.O.'s national concern analysis, although she characterized the pith and substance of the GGPPA more narrowly as "establishing minimum national greenhouse gas emissions pricing standards to reduce greenhouse gas emissions": paras. 165-66 (emphasis added). In her view, including the means — carbon pricing — in the description of the pith and substance is legally permissible and desirable. In some cases, as here, Parliament's choice of means may be so central to the legislative objective that the main thrust of the law, properly understood, is to achieve a result in a particular way.

[ 43 ] Huscroft J.A. dissented. He characterized the pith and substance of the GGPPA broadly as the regulation of GHG emissions. At the classification stage, he reasoned that the national concern doctrine requires the identification of a new subject matter that is independent of the means adopted in the relevant law. In this case, the proposed matter of national concern is federal authority over GHG emissions, which fails to meet the singleness, distinctiveness and indivisibility requirement from Crown Zellerbach . In addition, recognizing federal jurisdiction on the basis of provincial inability to establish a national standard would allow any matter to be transformed into a matter of national concern by just adding the word "national" to it. The fact that one province's inaction could undermine another province's carbon pricing efforts does not establish provincial inability either; this simply reflects a legitimate policy disagreement. Finally, Huscroft J.A. concluded that the matter's scale of impact on provincial jurisdiction is incompatible with the federal-provincial division of powers. For a matter to be one of national concern, it must have ascertainable and reasonable limits in order to contain its reach.

C. Court of Appeal of Alberta, 2020 ABCA 74, 3 Alta. L.R. (7th) 1

[ 44 ] The majority of the Court of Appeal of Alberta (Fraser C.J.A., Watson and Hughes JJ.A.) held that the GGPPA is unconstitutional. They reasoned that the national concern doctrine can apply only to matters that would originally have fallen within the provincial power respecting matters of a merely local or private nature under s. 92(16) of the Constitution . The doctrine has no application to matters that would originally have fallen under other enumerated provincial heads of power. The majority characterized the pith and substance of the GGPPA as "at a minimum, regulation of GHG emissions": paras. 211 and 256. This subject falls under various enumerated provincial powers, and in particular the power relating to the development and management of natural resources under s. 92A of the Constitution. Accordingly, the majority reasoned, the national concern doctrine has no application in this case. The majority went on to apply the framework from Crown Zellerbach . They found that the regulation of GHG emissions is not a single, distinctive and indivisible matter and that it would have an unacceptable impact on provincial jurisdiction. The GGPPA intrudes significantly into the provinces' exclusive jurisdiction over the development and management of natural resources, thereby depriving provinces of their right to balance environmental concerns with economic sustainability.

Appeals of the Attorney General of Saskatchewan and of the Attorney General of Ontario dismissed and appeal of the Attorney General of British Columbia allowed, Côté J. dissenting in part and Brown and Rowe JJ. dissenting.

Solicitors for the Attorney General of Saskatchewan: Attorney General of Saskatchewan, Regina; MLT Aikins, Regina.

Solicitor for the Attorney General of Ontario: Attorney General of Ontario, Toronto.

Solicitor for the Attorney General of British Columbia: Attorney General of British Columbia, Victoria.

Solicitors for the Attorney General of Canada: Attorney General of Canada, Winnipeg; Borden Ladner Gervais, Ottawa.

Solicitors for the Attorney General of Alberta: Gall Legge Grant Zwack, Vancouver; Justice and Solicitor General, Appeals, Education & Prosecution Policy Branch, Edmonton.

Solicitor for the intervener the Attorney General of Quebec: Attorney General of Quebec, Québec.

Solicitor for the intervener the Attorney General of New Brunswick: Attorney General of New Brunswick, Fredericton.

Solicitor for the intervener the Attorney General of Manitoba: Attorney General of Manitoba, Winnipeg.

Solicitors for the intervener Progress Alberta Communications Limited: Nanda & Company, Edmonton.

Solicitors for the interveners the Anishinabek Nation and the United Chiefs and Councils of Mnidoo Mnising: Westaway Law Group, Ottawa.

Solicitors for the intervener the Canadian Labour Congress: Goldblatt Partners, Toronto.

Solicitors for the interveners the Saskatchewan Power Corporation and SaskEnergy Incorporated: McKercher, Saskatoon.

Solicitors for the intervener the Oceans North Conservation Society: Arvay Finlay, Vancouver.

Solicitor for the intervener the Assembly of First Nations: Assembly of First Nations, Ottawa.

Solicitors for the intervener the Canadian Taxpayers Federation: Crease Harman, Victoria.

Solicitor for the intervener Canada's Ecofiscal Commission: University of Ottawa, Ottawa.

Solicitor for the interveners the Canadian Environmental Law Association, Environmental Defence Canada Inc. and the Sisters of Providence of St. Vincent de Paul: Canadian Environmental Law Association, Toronto.

Solicitors for the intervener Amnesty International Canada: Stockwoods, Toronto.

Solicitor for the interveners the National Association of Women and the Law and Friends of the Earth: University of Ottawa, Ottawa.

Solicitors for the intervener the International Emissions Trading Association: DeMarco Allan, Toronto.

Solicitor for the intervener the David Suzuki Foundation: Ecojustice Environmental Law Clinic at the University of Ottawa, Ottawa.

Solicitor for the intervener the Athabasca Chipewyan First Nation: Ecojustice Environmental Law Clinic at the University of Ottawa, Ottawa.

Solicitor for the intervener the Smart Prosperity Institute: University of Ottawa, Ottawa.

Solicitors for the intervener the Canadian Public Health Association: Gowling WLG (Canada), Toronto.

Solicitors for the interveners Climate Justice Saskatoon, the National Farmers Union, the Saskatchewan Coalition for Sustainable Development, the Saskatchewan Council for International Cooperation, the Saskatchewan Environmental Society, SaskEV, the Council of Canadians: Prairie and Northwest Territories Region, the Council of Canadians: Regina Chapter, the Council of Canadians: Saskatoon Chapter, the New Brunswick Anti-Shale Gas Alliance and the Youth of the Earth: Kowalchuk Law Office, Regina.

Solicitors for the interveners Centre québécois du droit de l'environnement and Équiterre: Michel Bélanger Avocats Inc., Montréal.

Solicitors for the interveners Generation Squeeze, the Public Health Association of British Columbia, the Saskatchewan Public Health Association, the Canadian Association of Physicians for the Environment, the Canadian Coalition for the Rights of the Child and the Youth Climate Lab: Ratcliff & Company, North Vancouver.

Solicitor for the intervener the Assembly of Manitoba Chiefs: Public Interest Law Centre, Winnipeg.

Solicitors for the interveners the City of Richmond, the City of Victoria, the City of Nelson, the District of Squamish, the City of Rossland and the City of Vancouver: Lidstone & Company, Vancouver.

Solicitors for the intervener the Thunderchild First Nation: McKercher, Saskatoon.