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Supreme Court ends uncertainty over constitutionality of federal carbon pricing framework

Author(s): Richard J. King, Jennifer Fairfax, Jacob A. Sadikman, Patrick G. Welsh, Isabelle Crew

Dec 13, 2021

Even before the Greenhouse Gas Pollution Pricing Act (the GGPPA) received royal assent in June 2018, questions arose about the federal government’s jurisdiction to enact a federal carbon pricing regulatory framework. For nearly three years, constitutional challenges brought by multiple provincial governments – Saskatchewan, Ontario and Alberta – worked their way through the courts, leading to conflicting decisions as to the GGPPA’s constitutionality.

For businesses across Canada, this uncertainty ended on March 25, 2021 when the Supreme Court of Canada (the Court) upheld the constitutionality of the GGPPA. In a 6-3 decision in References re Greenhouse Gas Pollution Pricing Act, the majority of the Court confirmed and applied the “division of powers” analysis under Canadian constitutional law to uphold the validity of the GGPPA. In doing so, the Court emphasized the importance of a national approach in addressing climate change...