A federal court has ruled that Alberta’s carbon tax and Saskatchewan’s carbon levy on provinces that don’t have a price on carbon will be extinguished once Ottawa adopts a national carbon price.
So despite previous court challenges that suggested that a Trudeau government backstop of a national price could skirt provincial powers over carbon pricing and therefore violate provisions of the Constitution, the Manitoba Court of Appeal has ruled that the provinces can keep the taxes once Ottawa has rolled out a national scheme.
READ MORE: Saskatchewan to appeal to Supreme Court of Canada over climate change court win
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Manitoba has had a carbon tax since 2008. The tax was challenged in Federal Court in 2015. Manitoba wanted to keep the tax after Ottawa began legislation but Ottawa responded that an existing federal tax was outside the Constitution and Manitoba was obligated to follow it.
Manitoba, Alberta and Saskatchewan all have relatively low carbon emissions. Saskatchewan believes this should give it the first option in carbon pricing. The Saskatchewan government has argued that low-carbon environment is not a significant interest under the Constitution and that carbon taxes are rather a moral outrage.
In the ruling, Justice David Poirier writes that the constitution gives the federal government the authority to impose a national price on carbon dioxide emissions and the cap and trade system in Saskatchewan only goes so far.
READ MORE: Saskatchewan wins environmental challenge of carbon tax
There is still the question of whether provinces can interfere with a federal carbon price by introducing their own taxes or cap and trade schemes. But the Manitoba ruling that the federal tax will end if Ottawa does not come up with one of its own after the province maintains Saskatchewan can do what it wants with a tax scheme that it is continuing to fight on the merits of its constitutionality.
Alberta and Saskatchewan have now lost two court challenges on carbon pricing. A British Columbia Federal Court of Appeal judge ruled against the carbon price at the beginning of November. The federal government has appealed that ruling.
Those challenges also argued that carbon pricing should only be an option when states come together to put a price on carbon dioxide and a constitutional challenge was dismissed in October by a Federal Court in Quebec.
The provinces have successfully sued Ottawa over the previous federal carbon price legislation because Ottawa included the carbon price in Bill C-45, so provinces can attempt to circumvent that by appealing any such legislation that would put a tax on carbon dioxide.
The provinces have now also lost one legal challenge at the Federal Court of Appeal.