Sask. sharply divided over Supreme Court carbon tax decision

·6 min read
Sask. sharply divided over Supreme Court carbon tax decision
Saskatchewan remains divided after the Supreme Court of Canada ruled the federal carbon tax was consitutional.  (Darryl Dyck/Canadian Press - image credit)
Saskatchewan remains divided after the Supreme Court of Canada ruled the federal carbon tax was consitutional. (Darryl Dyck/Canadian Press - image credit)

A recent Supreme Court of Canada decision on the constitutionality of the federal carbon tax has the Saskatchewan government expressing disappointment and environmentalists cheering.

On Thursday, the court ruled in a 6-3 decision that the federal Liberal government's carbon pricing plan is constitutional.

The decision means the federal government is able to move ahead with its plan to ensure every province and territory has a price on carbon to curb greenhouse gas emissions.

Speaking to reporters Thursday, Premier Scott Moe said he was disappointed with the decision.

"This decision does effectively end our legal avenues as a province," he said.

"It does not end our opposition to this costly and ineffective tax."

The Saskatchewan government, along with Ontario and Alberta, challenged the constitutionality of the carbon plan, arguing that it trespassed into areas that are traditionally governed by the provinces.

The Supreme Court disagreed, ruling that global warming caused harm outside of provincial boundaries and fell under the "peace, order and good governance" clause of the Constitution.

Moe vowed that he would not be sitting idly by.

"Our government will continue to make every effort to protect Saskatchewan families, workers and businesses from the negative consequences of the federal carbon tax," said the premier.

"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."

Moe said the government will aim to reduce the policy's effect on consumers and industries. He suggested creating Saskatchewan's own carbon pricing mechanism instead of having the federal scheme imposed on the province.

"The government will submit a proposal that will see Saskatchewan design its own carbon-pricing system for fuel ... that will be similar to one the federal government has approved in the province of New Brunswick," Moe said.

"This would provide an immediate rebate right at the pump to Saskatchewan people."

Provincial Opposition NDP Leader Ryan Meili said he was concerned that the carbon tax would affect people living in rural and remote areas and did not support the tax.

He asked the premier to begin negotiating a Saskatchewan-centric deal that would exempt fuel used for grain drying and would limit costs to families.

However, Meili criticized Moe's efforts in the courtroom and said that energy should have been spent bargaining.

"Scott Moe keeps picking fights with the federal government and he keeps losing," said Meili.

"Instead, he should be getting to work on behalf of Saskatchewan people."

Environmentalists happy

Meanwhile, environmentalists across Saskatchewan were cheering the move, saying they hoped it would begin to cut emissions across the province.

"Climate change is real and human activities are the primary cause," said Jim Elliott, with the Regina chapter of the Council of Canadians.

"We also believe that the impacts of the climate crisis we are seeing today and going forward is a foundational threat to life on this planet."

According to a paper published last year in Policy Options, Saskatchewan has the highest per-capita emissions in the country and is 244 per cent higher than the national average.

Other environmentalists believe the decision could open the door for Ottawa to do more on the climate file.

"Those measures could include regulations, innovative financing methods, targeted subsidies and serious government investment in clean energy efficiency initiatives, public transit and electric vehicles, and putting an end to government subsidies and favouritism toward the oil industry," said Mark Bigland-Pritchard with Climate Justice Saskatoon.

"There is no more time for dithering."

Bigland-Pritchard said the federal government's goal of reducing emissions by 30 per cent by 2030 was not enough and that Canada should aim to double that to 60 per cent.

Business case

Meanwhile, Saskatchewan's business community is worried about the potential fallout from the decision.

Both the Agricultural Producers Association of Saskatchewan (APAS) and the Saskatchewan Chamber of Commerce issued statements voicing disappointment about the decision.

"To be clear, the debate is not, and should not, be whether we need to transition to a lower carbon economy, but how to manage the process," wrote Saskatchewan Chamber of Commerce CEO Steve McLellan in a news release.

"The federal government's pan-Canadian approach to pollution pricing has not recognized the unique challenges present in Saskatchewan."

APAS estimates the cost of producing an acre of wheat will increase by $12.50 by the time the carbon tax is fully implemented in 2030, when factoring in increases in trucking, rail freight and grain drying.

Jason Childs, an economics professor at the University of Regina, said he is concerned smaller farmers will be squeezed out by the increased cost if they aren't exempted.

"Basically, the cost of production is going to go up," he said.

"And because the costs of production goes up, either we produce less and then start importing from other jurisdictions that don't tax carbon the way we are, or the price of food goes up. That's just the simple, cold-hearted economic logic of it."

Childs also said that people living in rural and remote areas of the province will be hit harder than people living in larger cities, since they have to drive longer distances for services.

While he believes the carbon tax may decrease consumption of fossil fuels, he also said the cost of living will increase.

"It is going to make everything more expensive, and one of the ways people react to things getting more expensive is to reduce consumption," said Childs.

"But when everything is getting more expensive, you can get sort of a wage ratchet effect, so I think this policy is ultimately going to be inflationary."

Constitutional law

Dwight Newman, a constitutional law professor at the University of Saskatchewan, says the legal question around the carbon tax has been settled and it's now up to Saskatchewan's government to work inside the framework.

"Whether the provinces have other options, it depends on a lot of things, and they have various options for working within the legislation," he said.

"That was the way the legislation was set up."

While encouraging provinces to craft their own plans, Ottawa said it would slap a carbon tax on fuels in provinces and territories that failed to establish adequate emissions pricing regimes.

The federal tax, the so-called "backstop," only applies if a province refuses to act.

However, Newman said the case certainly seems to strengthen federal powers.

"This is a really big win for those that prefer a more centralized Canada," he said.

"It's a decision that sets them up to create national standards, essentially any area that they would choose to do so."