Canada's top court rules on legality of federal carbon tax

TAG Oil

25/03/2021 09:00

By Nia Williams
    CALGARY, Alberta, March 25 (Reuters) - The cornerstone of
Canadian Prime Minister Justin Trudeau's plan to cut greenhouse
gas emissions is on the line on Thursday when the Supreme Court
decides whether the federal carbon pricing scheme can be
enforced in provinces that oppose it.
    Most legal experts expect the Liberal government's 2018
Greenhouse Gas Pollution Pricing Act will be upheld as
constitutional. Ottawa plans to steadily ramp up the price of
carbon to C$170 ($135.08) a ton by 2030, from C$30 a ton
currently.
    Carbon pricing, often called a carbon tax by opponents, is
the lynchpin of Canada's plan to ultimately reach net-zero
emissions by 2050. But it has run into fierce opposition from
Ontario, Saskatchewan and the country's main fossil
fuel-producing province Alberta.
    Under the carbon pricing act, Ottawa can impose a federal
levy on provinces that do not have an adequate carbon pricing
system of their own. The Supreme Court will rule on whether that
is valid use of federal powers, or whether it infringes on
provincial government jurisdiction.
    "Most court watchers are expecting the Supreme Court to
uphold the legality of the carbon pricing plan," said Andrew
Bernstein, a partner at Torys law firm in Toronto.
    The case will be closely watched as a test of how far the
federal government can exert its authority over the provinces.
    Quebec, which supports carbon pricing, intervened on the
side of the other provinces because of concerns about the
precedent that will be set if the government wins, said Dwight
Newman, a law professor at the University of Saskatchewan.
    Canada is the fourth-largest oil producer in the world and
the fifth-largest carbon emitter on a per capita basis.
    The country needs to cut emissions by 30% below 2005 levels
by 2030 to fulfil its international climate commitments, which
would involve slashing annual emissions to 511 megatons,
compared with 729 megatons in 2018.
    The Liberal government unveiled a strengthened climate plan
late last year that it says will reduce emissions to 503
megatons and described carbon pricing as a "critical element" of
meeting that target.  urn:newsml:reuters.com:*:nL1N2IR1RR
    "Carbon pricing is the central defining feature of their
climate strategy," said Sarah Petrevan, policy director at
thinktank Clean Energy Canada.
    Carbon taxes are levied in 14 out of the 31 high-income OECD
countries, according to a 2020 report by Canada's Fraser
Institute. Sweden currently has the world's highest carbon tax 
at around C$177 a ton.
 ($1 = 1.2585 Canadian dollars)

 (Reporting by Nia Williams; Editing by Hugh Lawson)
 ((nia.williams@thomsonreuters.com; +1 403 531 1624; Reuters
Messaging: nia.williams.thomsonreuters.com@reuters.net))