In a 3-2 decision, the Saskatchewan Court of Appeal has ruled that the federal carbon price backstop is not only constitutional, but it also qualifies as a regulatory charge and not a tax, which means that the way it’s being applied is also constitutional. Predictably, Scott Moe has vowed to take this to the Supreme Court of Canada (and a 3-2 decision made this a certainty if the political element wasn’t there already), while Catherine McKenna, predictably, called it a victory for the planet.
This is a crucial paragraph, at least for me. pic.twitter.com/1BeatAvwLO
— Andrew Leach (@andrew_leach) May 3, 2019
In terms of analysis, here is the long thread from economist Andrew Leach’s reading fo the decision, and his commentary on what the dissenting judges got wrong is particularly illuminating. As well, economist Lindsay Tedds’ wheelhouse is the whole difference between taxes and regulatory charges, so she has some comments here. I would note that the majority decision is going to be some of the precedent that Ontario’s Court of Appeal will look at as they’re drafting their own ruling on the Ontario reference, and if New Brunswick, Alberta, and Manitoba proceed with their own challenges, it will help to inform them as well. But with it headed to the Supreme Court of Canada – as Ontario’s will inevitably as well, and everyone knows it – it may not make any more sense for those other provinces to carry on their own challenges as it’s unlikely that they’ll make any more novel arguments, and it would seem to be swifter for all involved to let the SCC process happen sooner than later (though it certainly won’t happen before the next election, and there is a hope among opponents that a Conservative win will render the whole issue moot if they scrap the federal law beforehand).
Jason Markusoff notes that while the court victory is a modest win for the Liberals, the continued carbon tax crusading by Kenney and Ford isn’t winning them much applause from the blue-chip Toronto corporations that they’re looking to attract with their “open for business” shtick. (Here’s a hint: Stop creating uncertainty by cancelling established environmental plans and creating political risk by cancelling projects and immunizing yourselves from litigation). Andrew Coyne, meanwhile, asserts that the ruling is a victory for common sense – as well as the planet.