Attorney General of Saskatchewan Appellant v. Attorney General of Canada, 2021 SCC 11

SUPREME COURT OF CANADA Citation: References re Greenhouse Gas Pollution Pricing Act , 2021 SCC 11, [2021] 1 S.C.R. 175 Appeals Heard: September 22, 23, 2020 Judgment Rendered: March 25, 2021 Dockets: 38663, 38781, 39116 Between: Attorney General of Saskatchewan Appellant and Attorney General of Canada Respondent - and - Attorney General of Ontario, Attorney General of Quebec, Attorney General of New Brunswick, Attorney General of Manitoba, Attorney General of British Columbia, Attorney General of Alberta, Progress Alberta Communications Limited, Canadian Labour Congress, Saskatchewan Power Corporation, SaskEnergy Incorporated, Oceans North Conservation Society, Assembly of First Nations, Canadian Taxpayers Federation, Canada’s Ecofiscal Commission, Canadian Environmental Law Association, Environmental Defence Canada Inc., Sisters of Providence of St.

Vincent de Paul, Amnesty International Canada, National Association of Women and the Law, Friends of the Earth, International Emissions Trading Association, David Suzuki Foundation, Athabasca Chipewyan First Nation, Smart Prosperity Institute, Canadian Public Health Association, Climate Justice Saskatoon, National Farmers Union, Saskatchewan Coalition for Sustainable Development, Saskatchewan Council for International Cooperation, Saskatchewan Environmental Society, SaskEV, Council of Canadians: Prairie and Northwest Territories Region, Council of Canadians: Regina Chapter, Council of Canadians: Saskatoon Chapter, New Brunswick Anti-Shale Gas Alliance, Youth of the Earth, Centre québécois du droit de l’environnement, Équiterre, Generation Squeeze, Public Health Association of British Columbia, Saskatchewan Public Health Association, Canadian Association of Physicians for the Environment, Canadian Coalition for the Rights of the Child, Youth Climate Lab, Assembly of Manitoba Chiefs, City of Richmond, City of Victoria, City of Nelson, District of Squamish, City of Rossland, City of Vancouver and Thunderchild First Nation Interveners And Between: Attorney General of Ontario Appellant and Attorney General of Canada Respondent

- and - Attorney General of Quebec, Attorney General of New Brunswick, Attorney General of Manitoba, Attorney General of British Columbia, Attorney General of Saskatchewan, Attorney General of Alberta, Progress Alberta Communications Limited, Anishinabek Nation, United Chiefs and Councils of Mnidoo Mnising, Canadian Labour Congress, Saskatchewan Power Corporation, SaskEnergy Incorporated, Oceans North Conservation Society, Assembly of First Nations, Canadian Taxpayers Federation, Canada’s Ecofiscal Commission, Canadian Environmental Law Association, Environmental Defence Canada Inc., Sisters of Providence of St.

Vincent de Paul, Amnesty International Canada, National Association of Women and the Law, Friends of the Earth, International Emissions Trading Association, David Suzuki Foundation, Athabasca Chipewyan First Nation, Smart Prosperity Institute, Canadian Public Health Association, Climate Justice Saskatoon, National Farmers Union, Saskatchewan Coalition for Sustainable Development, Saskatchewan Council for International Cooperation, Saskatchewan Environmental Society, SaskEV, Council of Canadians: Prairie and Northwest Territories Region, Council of Canadians: Regina Chapter, Council of Canadians: Saskatoon Chapter, New Brunswick Anti-Shale Gas Alliance, Youth of the Earth, Centre québécois du droit de l’environnement, Équiterre, Generation Squeeze, Public Health Association of British Columbia, Saskatchewan Public Health Association, Canadian Association of Physicians for the Environment, Canadian Coalition for the Rights of the Child, Youth Climate Lab, Assembly of Manitoba Chiefs, City of Richmond, City of Victoria, City of Nelson, District of Squamish, City of Rossland, City of Vancouver and Thunderchild First Nation Interveners And Between: Attorney General of British Columbia Appellant and Attorney General of Alberta Respondent - and - Attorney General of Canada, Attorney General of Ontario, Attorney General of Quebec, Attorney General of New Brunswick, Attorney General of Manitoba, Attorney General of Saskatchewan, Progress Alberta Communications Limited, Saskatchewan Power Corporation, SaskEnergy Incorporated, Oceans North Conservation Society, Assembly of First Nations, Canadian Taxpayers Federation, Canada’s Ecofiscal Commission, Canadian Environmental Law Association, Environmental Defence Canada Inc., Sisters of Providence of St.

Vincent de Paul, Amnesty International Canada, International Emissions Trading Association, David Suzuki Foundation, Athabasca Chipewyan First Nation, Smart Prosperity Institute, Canadian Public Health Association, Climate Justice Saskatoon, National Farmers Union, Saskatchewan Coalition for Sustainable Development, Saskatchewan Council for International Cooperation, Saskatchewan Environmental Society, SaskEV, Council of Canadians: Prairie and Northwest Territories Region, Council of Canadians: Regina Chapter, Council of Canadians: Saskatoon Chapter, New Brunswick Anti-Shale Gas Alliance, Youth of the Earth, Generation Squeeze, Public Health Association of British Columbia, Saskatchewan Public Health Association, Canadian Association of Physicians for the Environment, Canadian Coalition for the Rights of the Child, Youth Climate Lab and Thunderchild First Nation Interveners Coram: Wagner C.J. and Abella, Moldaver, Karakatsanis, Côté, Brown, Rowe, Martin and Kasirer JJ.

Reasons for Judgment: (paras. 1 to 221) Wagner C.J. (Abella, Moldaver, Karakatsanis, Martin and Kasirer JJ. concurring)

Reasons Dissenting in Part: (paras. 222 to 295) Côté J. Dissenting Reasons: (paras. 296 to 456) Brown J. Dissenting Reasons: (paras. 457 to 616) Rowe J. IN THE MATTER OF References to the Court of Appeal for Saskatchewan, the Court of Appeal for Ontario and the Court of Appeal of Alberta respecting the constitutionality of the Greenhouse Gas Pollution Pricing Act , S.C. 2018, c. 12, s. 186 Attorney General of Saskatchewan Appellant v.

Attorney General of Canada Respondent and Attorney General of Ontario, Attorney General of Quebec, Attorney General of New Brunswick, Attorney General of Manitoba, Attorney General of British Columbia, Attorney General of Alberta, Progress Alberta Communications Limited, Canadian Labour Congress, Saskatchewan Power Corporation, SaskEnergy Incorporated, Oceans North Conservation Society, Assembly of First Nations, Canadian Taxpayers Federation, Canada’s Ecofiscal Commission, Canadian Environmental Law Association, Environmental Defence Canada Inc., Sisters of Providence of St.

Vincent de Paul, Amnesty International Canada, National Association of Women and the Law, Friends of the Earth, International Emissions Trading Association, David Suzuki Foundation,

Athabasca Chipewyan First Nation, Smart Prosperity Institute, Canadian Public Health Association, Climate Justice Saskatoon, National Farmers Union, Saskatchewan Coalition for Sustainable Development, Saskatchewan Council for International Cooperation, Saskatchewan Environmental Society, SaskEV, Council of Canadians: Prairie and Northwest Territories Region, Council of Canadians: Regina Chapter, Council of Canadians: Saskatoon Chapter, New Brunswick Anti-Shale Gas Alliance, Youth of the Earth, Centre québécois du droit de l’environnement, Équiterre, Generation Squeeze, Public Health Association of British Columbia, Saskatchewan Public Health Association, Canadian Association of Physicians for the Environment, Canadian Coalition for the Rights of the Child, Youth Climate Lab, Assembly of Manitoba Chiefs, City of Richmond, City of Victoria, City of Nelson, District of Squamish, City of Rossland, City of Vancouver and Thunderchild First Nation Interveners - and - Attorney General of Ontario Appellant v.

Attorney General of Canada Respondent and Attorney General of Quebec, Attorney General of New Brunswick, Attorney General of Manitoba, Attorney General of British Columbia, Attorney General of Saskatchewan,

Attorney General of Alberta, Progress Alberta Communications Limited, Anishinabek Nation, United Chiefs and Councils of Mnidoo Mnising, Canadian Labour Congress, Saskatchewan Power Corporation, SaskEnergy Incorporated, Oceans North Conservation Society, Assembly of First Nations, Canadian Taxpayers Federation, Canada’s Ecofiscal Commission, Canadian Environmental Law Association, Environmental Defence Canada Inc., Sisters of Providence of St.

Vincent de Paul, Amnesty International Canada, National Association of Women and the Law, Friends of the Earth, International Emissions Trading Association, David Suzuki Foundation, Athabasca Chipewyan First Nation, Smart Prosperity Institute, Canadian Public Health Association, Climate Justice Saskatoon, National Farmers Union, Saskatchewan Coalition for Sustainable Development, Saskatchewan Council for International Cooperation, Saskatchewan Environmental Society, SaskEV, Council of Canadians: Prairie and Northwest Territories Region, Council of Canadians: Regina Chapter, Council of Canadians: Saskatoon Chapter, New Brunswick Anti-Shale Gas Alliance, Youth of the Earth, Centre québécois du droit de l’environnement, Équiterre, Generation Squeeze, Public Health Association of British Columbia, Saskatchewan Public Health Association, Canadian Association of Physicians for the Environment, Canadian Coalition for the Rights of the Child,

Youth Climate Lab, Assembly of Manitoba Chiefs, City of Richmond, City of Victoria, City of Nelson, District of Squamish, City of Rossland, City of Vancouver and Thunderchild First Nation Interveners - and - Attorney General of British Columbia Appellant v.

Attorney General of Alberta Respondent and Attorney General of Canada, Attorney General of Ontario, Attorney General of Quebec, Attorney General of New Brunswick, Attorney General of Manitoba, Attorney General of Saskatchewan, Progress Alberta Communications Limited, Saskatchewan Power Corporation, SaskEnergy Incorporated, Oceans North Conservation Society, Assembly of First Nations, Canadian Taxpayers Federation, Canada’s Ecofiscal Commission, Canadian Environmental Law Association, Environmental Defence Canada Inc., Sisters of Providence of St.

Vincent de Paul, Amnesty International Canada, International Emissions Trading Association, David Suzuki Foundation, Athabasca Chipewyan First Nation, Smart Prosperity Institute, Canadian Public Health Association, Climate Justice Saskatoon, National Farmers Union, Saskatchewan Coalition for Sustainable Development, Saskatchewan Council for International Cooperation,

Saskatchewan Environmental Society, SaskEV, Council of Canadians: Prairie and Northwest Territories Region, Council of Canadians: Regina Chapter, Council of Canadians: Saskatoon Chapter, New Brunswick Anti-Shale Gas Alliance, Youth of the Earth, Generation Squeeze, Public Health Association of British Columbia, Saskatchewan Public Health Association, Canadian Association of Physicians for the Environment, Canadian Coalition for the Rights of the Child, Youth Climate Lab and Thunderchild First Nation Interveners Indexed as: References re Greenhouse Gas Pollution Pricing Act 2021 SCC 11 File Nos.: 38663, 38781, 39116. 2020: September 22, 23; 2021: March 25.

Present: Wagner C.J. and Abella, Moldaver, Karakatsanis, Côté, Brown, Rowe, Martin and Kasirer JJ. on appeal from the court of appeal for saskatchewan on appeal from the court of appeal for ontario on appeal from the court of appeal of alberta Constitutional law — Division of powers — Greenhouse gas emissions — Federal legislation setting minimum national standards of greenhouse gas pricing — Whether greenhouse gas pricing is matter of national concern falling within Parliament’s power to legislate in respect of peace, order and good government of Canada — Constitution Act, 1867, s. 91 “preamble” — Greenhouse Gas Pollution Pricing Act, S.C. 2018, c. 12, s. 186 .

In 2018, Parliament enacted the Greenhouse Gas Pollution Pricing Act (“ GGPPA ”). The GGPPA comprises four parts and four schedules.

Part 1 establishes a fuel charge that applies to producers, distributors and importers of various types of carbon-based fuel.

Part 2 sets out a pricing mechanism for industrial greenhouse gas (“GHG”) emissions by large emissions-intensive industrial facilities.

Part 3 authorizes the Governor in Council to make regulations providing for the application of provincial law concerning GHG emissions to federal works and undertakings, federal land and Indigenous land located in that province, as well as to internal waters located in or contiguous with the province.

Part 4 requires the Minister of the Environment to prepare an annual report on the administration of the GGPPA and have it tabled in Parliament. Saskatchewan, Ontario and Alberta challenged the constitutionality of the first two parts and the four schedules of the GGPPA by references to their respective courts of appeal, asking whether the GGPPA is unconstitutional in whole or in part. In split decisions, the courts of appeal for Saskatchewan and Ontario held that the GGPPA is constitutional, while the Court of Appeal of Alberta held that it is unconstitutional.

The Attorney General of British Columbia, who had intervened in the Court of Appeal of Alberta, the Attorney General of Saskatchewan and the Attorney General of Ontario now appeal as of right to the Court. Held (Côté J. dissenting in part and Brown and Rowe JJ. dissenting): The appeals by the Attorney General of Saskatchewan and the Attorney General of Ontario should be dismissed, and the appeal by the Attorney General of British Columbia should be allowed. The reference questions are answered in the negative. Per Wagner C.J. and Abella, Moldaver, Karakatsanis, Martin and Kasirer JJ.: The GGPPA is constitutional.

It sets minimum national standards of GHG price stringency to reduce GHG emissions. Parliament has jurisdiction to enact this law as a matter of national concern under the peace, order, and good government (“POGG”) clause of s. 91 of the Constitution Act, 1867 . Federalism is a foundational principle of the Canadian Constitution. Its objectives are to reconcile diversity with unity, promote democratic participation by reserving meaningful powers to the local and regional level and foster cooperation between Parliament and the provincial legislatures for the common good.

Sections 91 and 92 of the Constitution give expression to the principle of federalism and divide legislative powers between Parliament and the provincial legislatures. Under the division of powers, broad powers were conferred on the provinces to ensure diversity, while at the same time reserving to the federal government powers better exercised in relation to the country as a whole to provide for Canada’s unity. Federalism recognizes that within their spheres of jurisdiction, provinces have autonomy to develop their societies. Federal power cannot be used in a manner that effectively eviscerates provincial power.

Courts, as impartial arbiters, are charged with resolving jurisdictional disputes over the boundaries of federal and provincial powers on the basis of the principle of federalism. Although early Canadian constitutional decisions by the Judicial Committee of the Privy Council applied a rigid division of federal-provincial powers as watertight compartments, the Court has favoured a flexible view of federalism, best described as a modern cooperative federalism, that accommodates and encourages intergovernmental cooperative efforts.

However, the Court has also always maintained that flexibility and cooperation, while important, cannot override or modify federalism and the constitutional division of powers. The review of legislation on federalism grounds consists of the well-established two-stage analytical approach. At the first stage, a court must consider the purpose and effects of the challenged statute or provision with a view to characterizing the subject matter or “pith and substance”.

A court must then classify the subject matter with reference to federal and provincial heads of power under the Constitution in order to determine whether it is intra vires Parliament and therefore valid. At the first stage of the division of powers analysis, a court must consider the purpose and effects of the challenged statute or provision in order to identify its “pith and substance” or its main thrust or dominant or most important characteristic. In determining the purpose of the challenged statute or provision, a court can consider both intrinsic evidence, such as the legislation’s

preamble or purpose clauses, and extrinsic evidence, such as Hansard or minutes of parliamentary committees. In considering the effects of the challenged legislation, a court can consider both the legal effects, those that flow directly from the provisions of the statute itself, and the practical effects, the side effects that flow from the application of the statute.

Where a court is asked to adjudicate the constitutionality of legislation that has been in force for only a short time, any prediction of future practical effect is necessarily short-term, since the court is not equipped to predict accurately the future consequential impact of legislation. The characterization process is not technical or formalistic. A court can look at the background and circumstances of a statute’s enactment as well as at the words used in it. Three points with respect to the identification of the pith and substance are important to clarify.

First, the pith and substance of a challenged statute or provision must be described as precisely as possible. A vague or general description is unhelpful, as it can result in the law being superficially assigned to both federal and provincial heads of powers or may exaggerate the extent to which the law extends into the other level of government’s sphere of jurisdiction. However, precision should not be confused with narrowness. A court must focus on the law itself and what it is really about.

The pith and substance of a challenged statute or provision should capture the law’s essential character in terms that are as precise as the law will allow. Second, it is permissible in some circumstances for a court to include the legislative choice of means in the definition of a statute’s pith and substance, as long as it does not lose sight of the fact that the goal of the analysis is to identify the true subject matter of the challenged statute or provision.

In some cases, the choice of means may be so central to the legislative objective that the main thrust of a statute or provision, properly understood, is to achieve a result in a particular way, which would justify including the means in identifying the pith and substance. Third, the characterization and classification stages of the division of powers analysis are and must be kept distinct. The pith and substance of a statute or a provision must be identified without regard to the heads of legislative competence.

At the second stage of the division of power analysis, a court must classify the matter by reference to the heads of power set out in the Constitution . Matters and classes of subjects are distinct. Law-making powers are exercisable in relation to matters, which in turn generally come within broader classes of subjects.

Section 91 does not provide in the context of the POGG power that Parliament can make laws in relation to classes of subjects; instead, it states that Parliament can make laws for the peace, order, and good government of Canada in relation to “Matters”.

National concern is a well-established but rarely applied doctrine of Canadian constitutional law derived from the introductory clause of s. 91 of the Constitution , which empowers Parliament to make laws for the peace, order, and good government of Canada, in relation to all matters not coming within the classes of subjects assigned exclusively to the legislatures of the provinces. A matter that falls under the POGG power necessarily does not come within the classes of subjects enumerated in ss. 91 and 92.

Courts must approach a finding that the federal government has jurisdiction on the basis of the national concern doctrine with great caution. The effect of finding that a matter is one of national concern is permanent and confers exclusive jurisdiction over that matter on Parliament. However, the scope of the federal power is defined by the nature of the national concern itself and only aspects with a sufficient connection to the underlying inherent national concern will fall within the scope of the federal power.

A closely related question concerns the applicability of the double aspect doctrine to a matter of national concern. The double aspect doctrine recognizes that the same fact situations can be regulated from different perspectives, one of which may relate to a provincial power and the other to a federal power. The doctrine can apply in cases in which the federal government has jurisdiction on the basis of the national concern doctrine. Such an approach fosters coherence in the law, because the double aspect doctrine can apply to every enumerated federal and provincial head of power.

It is also consistent with the modern approach to federalism, which favours flexibility and a degree of overlapping jurisdiction. However, the fact that the double aspect doctrine can apply does not mean that it will apply in a given case. It may apply if a fact situation can be regulated from different federal and provincial perspectives and each level of government has a compelling interest in enacting legal rules in relation to that situation. It should be applied cautiously so as to avoid eroding the importance attached to provincial autonomy.

The double aspect doctrine takes on particular significance where Canada asserts jurisdiction over a matter that involves a minimum national standard imposed by legislation that operates as a backstop. The recognition of a matter of national concern such as this will inevitably result in a double aspect situation. This is in fact the very premise of a federal scheme that imposes minimum national standards: Canada and the provinces are both free to legislate in relation to the same fact situation but the federal law is paramount.

In such a case, even if the national concern test would otherwise be met, a cautious approach to the double aspect doctrine should act as an additional check. The court must be satisfied that Canada in fact has a compelling interest in enacting legal rules over the federal aspect of the activity at issue and that the multiplicity of aspects is real and not merely nominal. Turning to the national concern test, there are two points worth noting about the framework as a whole. First, the recognition of a matter of national concern must be based on evidence.

An onus rests on Canada throughout the national concern analysis to adduce evidence in support of its assertion of jurisdiction. Second, there is no requirement that a matter be historically new in order to be found to be one of national concern. Many new developments may be predominantly local and provincial in character and fall under provincial heads of power.

The term “new”, as used in the jurisprudence, refers to matters that could satisfy the national concern test and includes both “new” matters that did not exist in 1867 and matters that are “new” in the sense that the understanding of those subject matters has, in some way, shifted so as to bring out their inherently national character. Thus, the critical element of the analysis is the requirement that matters of national concern be inherently national in character, not that they be historically new. Finding that a matter is one of national concern involves a three-step analysis.

First, as a threshold question, Canada must establish

that the matter is of sufficient concern to the country as a whole to warrant consideration as a possible matter of national concern. Second, the matter must have a singleness, distinctiveness and indivisibility. Third, Canada must show that the proposed matter has a scale of impact on provincial jurisdiction that is reconcilable with the division of powers. The purpose of the national concern analysis is to identify matters of inherent national concern — matters which, by their nature, transcend the provinces.

The analysis begins by asking, as a threshold question, whether the matter is of sufficient concern to Canada as a whole to warrant consideration under the national concern doctrine. This invites a common-sense inquiry into the national importance of the proposed matter . This approach does not open the door to the recognition of federal jurisdiction simply on the basis that a legislative field is important; it operates to limit the application of the national concern doctrine and provides essential context for the analysis that follows.

The second step of the analysis requires that a matter have a singleness, distinctiveness and indivisibility that clearly distinguishes it from matters of provincial concern. Two principles underpin this requirement: first, to prevent federal overreach, jurisdiction should be found to exist only over a specific and identifiable matter that is qualitatively different from matters of provincial concern; and second, federal jurisdiction should be found to exist only where the evidence establishes provincial inability to deal with the matter.

Under the first principle of the singleness, distinctiveness and indivisibility analysis, the court should inquire into whether the matter is predominantly extraprovincial and international in its nature or its effects, into the content of any international agreements in relation to the matter, and into whether the matter involves a federal legislative role that is distinct from and not duplicative of that of the provinces.

It is clearly not enough for a matter to be quantitatively different from matters of provincial concern — the mere growth or extent of a problem across Canada is insufficient to justify federal jurisdiction. International agreements may in some cases indicate that a matter is qualitatively different from matters of provincial concern. However, the existence of treaty obligations is not determinative of federal jurisdiction as there is no freestanding federal treaty implementation power and Parliament’s jurisdiction to implement treaties signed by the federal government depends on the ordinary division of powers.

Furthermore, to be qualitatively different from matters of provincial concern, the matter must not be an aggregate of provincial matters. The federal legislative role must be distinct from and not duplicative of that of the provinces. Federal legislation will not be qualitatively distinct if it overshoots regulation of a national aspect of the field and instead duplicates provincial regulation or regulates issues that are primarily of local concern.

The second principle underpinning the singleness, distinctiveness, and indivisibility analysis is that federal jurisdiction should be found to exist only where the evidence establishes provincial inability to deal with the matter. Provincial inability functions as a strong constraint on federal power and should be seen as a necessary but not sufficient requirement for the purposes of the national concern doctrine.

In order for provincial inability to be established both of these factors are required: (1) the legislation should be of a nature that the provinces jointly or severally would be constitutionally incapable of enacting; and (2) the failure to include one or more provinces or localities in a legislative scheme would jeopardize the successful operation of the scheme in other parts of the country.

And there is a third factor that is required in the context of the national concern doctrine in order to establish provincial inability: a province’s failure to deal with the matter must have grave extraprovincial consequences. The requirement for grave extraprovincial consequences sets a high bar for a finding of provincial inability for the purposes of the national concern doctrine and can be satisfied by actual harm or by a serious risk of harm being sustained in the future. It may include serious harm to human life and health or to the environment, though it is not necessarily limited to such consequences.

Mere inefficiency or additional financial costs stemming from divided or overlapping jurisdiction is clearly insufficient. Evaluating extraprovincial harm helps to determine whether a national law is not merely desirable, but essential, in the sense that the problem is beyond the power of the provinces to deal with it. This connects the provincial inability test to the overall purpose of the national concern test, which is to identify matters of inherent national concern that transcend the provinces.

At the third and final step of the national concern analysis, Canada must show that the proposed matter has a scale of impact on provincial jurisdiction that is reconcilable with the fundamental distribution of legislative power under the Constitution . The purpose of the scale of impact analysis is to protect against unjustified intrusions on provincial autonomy and prevent federal overreach.

At this stage of the analysis, the intrusion upon provincial autonomy that would result from empowering Parliament to act is balanced against the extent of the impact on the interests that would be affected if Parliament were unable to constitutionally address the matter at a national level. Identifying a new matter of national concern will be justified only if the latter outweighs the former. In this case, the true subject matter of the GGPPA is establishing minimum national standards of GHG price stringency to reduce GHG emissions. Both the short and

long titles of the GGPPA confirm that its true subject matter is not just to mitigate climate change, but to do so through the pan-Canadian application of pricing mechanisms to a broad set of GHG emission sources. Likewise, it is clear from reading the

preamble as a whole that the focus of the GGPPA is on national GHG pricing. In Parliament’s eyes, the relevant mischief is the effects of the failure of some provinces to implement GHG pricing systems or to implement sufficiently stringent pricing systems, and the consequential failure to reduce GHG emissions across Canada. To address this mischief, the GGPPA establishes minimum national standards of GHG pricing that apply across Canada, setting a GHG pricing floor across the country.

Similarly, it can be seen from the events leading up to the enactment of the GGPPA and from government policy papers that there was a focus on GHG pricing and establishing minimum national standards of GHG price stringency for GHG emissions — through a federally imposed national direct GHG pricing backstop — without displacing provincial and territorial jurisdiction over the choice and design of pricing instruments. This is supported by evidence of the legislative debates.

Both elected representatives and senior public servants consistently described the purpose of the GGPPA in terms of imposing a Canada-wide GHG pricing system, not of regulating GHG emissions generally. The legal effects of the GGPPA confirm that its focus is on national GHG pricing and confirm its essentially backstop nature. In jurisdictions where Parts 1 and 2 of the GGPPA apply, the primary legal effect is to create one GHG pricing scheme that prices GHG emissions in a manner that is consistent with what is done in the rest of the Canadian economy.

Part 1 of the GGPPA directly prices the emissions of certain fuel producers, distributors and importers.

Part 2 directly prices the GHG emissions of covered facilities to the extent that they exceed the applicable efficiency standards. The GGPPA does not require those to whom it applies to perform or refrain from performing specified GHG emitting activities. Nor does it tell industries how they are to operate in order to reduce their GHG emissions. Instead, all it does is to require persons to pay for engaging in specified activities that result in the emission of GHGs. The GGPPA leaves individual consumers and businesses free to choose how they will respond, or not, to the price signals sent by the marketplace.

The legal effects of the GGPPA are thus centrally aimed at pricing GHG emissions nationally. Moreover, because the GGPPA operates as a backstop, the legal effects of Parts 1 and 2 of the statute — a federally imposed GHG pricing scheme — apply only if the Governor in Council has listed a province or territory. The GGPPA provides that the Governor in Council may make listing decisions for Parts 1 and 2 of the statute only for the purpose of ensuring that the pricing of greenhouse gas emissions is

applied broadly in Canada at levels that the Governor in Council considers appropriate, taking into account, as the primary factor, the stringency of provincial pricing mechanisms for greenhouse gas emissions. As a result, the GHG pricing mechanism described in Parts 1 and 2 of the GGPPA will not come into operation at all in a province or territory that already has a sufficiently stringent GHG pricing system.

Not only does this confirm the backstop nature of the GGPPA — that of creating minimum national standards of GHG pricing — but this feature gives legal effect to the federal government’s commitment to give the provinces and territories the flexibility to design their own policies to meet emissions reductions targets, including carbon pricing, adapted to each province and territory’s specific circumstances, as well as to recognize carbon pricing policies already implemented or in development by provinces and territories.

Although evidence of practical effects is not helpful in this case given the dearth of such evidence, the evidence of practical effects to date is consistent with providing flexibility and support for provincially designed GHG pricing schemes. Practically speaking, the only thing not permitted by the GGPPA is for provinces and territories not to implement a GHG pricing mechanism or one that is not sufficiently stringent.

Applying the threshold question, Canada has adduced evidence that clearly shows that establishing minimum national standards of GHG price stringency to reduce GHG emissions is of sufficient concern to Canada as a whole that it warrants consideration in accordance with the national concern doctrine. The history of efforts to address climate change in Canada reflects the critical role of carbon pricing strategies in policies to reduce GHG emissions. There is also a broad consensus among expert international bodies that carbon pricing is a critical measure for the reduction of GHG emissions.

This matter is critical to our response to an existential threat to human life in Canada and around the world. As a result, it passes the threshold test and warrants consideration as a possible matter of national concern. Minimum national standards of GHG price stringency, which are implemented by means of the backstop architecture of the GGPPA , relate to a federal role in carbon pricing that is qualitatively different from matters of provincial concern. GHGs are a specific and precisely identifiable type of pollutant.

The harmful effects of GHGs are known, and the fuel and excess emissions charges are based on the global warming potential of the gases. GHG emissions are also predominantly extraprovincial and international in their character and implications. This flows from their nature as a diffuse atmospheric pollutant and from their effect in causing global climate change. Moreover, the regulatory mechanism of GHG pricing is also specific and limited.

GHG pricing operates in a particular way, seeking to change behaviour by internalizing the cost of climate change impacts, incorporating them into the price of fuel and the cost of industrial activity. It is a distinct form of regulation that does not amount to the regulation of GHG emissions generally or encompass regulatory mechanisms that do not involve pricing. The Governor in Council’s power to make a regulation that applies the GGPPA ’s pricing system to a province may be exercised only if it is first determined that the province’s pricing mechanisms are insufficiently stringent.

If each province designed its own pricing system and all the provincial systems met the federal pricing standards, the GGPPA would achieve its purpose without operating to directly price GHG emissions anywhere in the country. The GGPPA is tightly focused on this distinctly federal role and does not descend into the detailed regulation of all aspects of GHG pricing. Provincial inability is established in this case. First, the provinces, acting alone or together, are constitutionally incapable of establishing minimum national standards of GHG price stringency to reduce GHG emissions.

While the provinces could choose to cooperatively establish a uniform carbon pricing scheme, doing so would not assure a sustained approach because the provinces and territories are constitutionally incapable of establishing a binding outcome-based minimum legal standard — a national GHG pricing floor — that applies in all provinces and territories at all times. Second, a failure to include one province in the scheme would jeopardize its success in the rest of Canada.

The withdrawal of one province from the scheme would clearly threaten its success for two reasons: emissions reductions that are limited to a few provinces would fail to address climate change if they were offset by increased emissions in other Canadian jurisdictions; and any province’s failure to implement a sufficiently stringent GHG pricing mechanism could undermine the efficacy of GHG pricing everywhere in Canada because of the risk of carbon leakage. Third, a province’s failure to act or refusal to cooperate would have grave consequences for extraprovincial interests.

It is well established that climate change is causing significant environmental, economic and human harm nationally and internationally, with especially high impacts in the Canadian Arctic, coastal regions and on Indigenous peoples. Although the matter has a clear impact on provincial jurisdiction, its impact on the provinces’ freedom to legislate and on areas of life that would fall under provincial heads of power is qualified and limited. First, the matter is limited to GHG pricing of GHG emissions — a narrow and specific regulatory mechanism.

If a province fails to meet the minimum national standards, the GGPPA imposes a backstop pricing system, but only to the extent necessary to remedy the deficiency in provincial regulation to address the extraprovincial and international harm that might arise from the province’s failure to act or to set sufficiently stringent standards. Second, the matter’s impact on areas of life that would generally fall under provincial heads of power is also limited.

The discretion of the Governor in Council is necessary in order to ensure that some provinces do not subordinate or unduly burden the other provinces through their unilateral choice of standards. Although this restriction may interfere with a province’s preferred balance between economic and environmental considerations, it is necessary to consider the interests that would be harmed — owing to irreversible consequences for the environment, for human health and safety and for the economy — if Parliament were unable to constitutionally address the matter at a national level.

This irreversible harm would be felt across the country and would be borne disproportionality by vulnerable communities and regions in Canada. The impact on those interests justify the limited constitutional impact on provincial jurisdiction. As a final matter, the fuel and excess emission charges imposed by the GGPPA have a sufficient nexus with the regulatory scheme to be considered constitutionally valid regulatory charges. To be a regulatory charge, as opposed to a tax, a governmental levy with the characteristics of a tax must be connected to a regulatory scheme.

The first step is to identify the existence of a relevant regulatory scheme; if such a scheme is found to exist, the second step is to establish a relationship between the charge and the scheme itself. Influencing behaviour is a valid purpose for a regulatory charge and regulatory charges need not reflect the cost of the scheme. The amount of a regulatory charge whose purpose is to alter behaviour is set at a level designed to proscribe, prohibit, or lend preference to a behaviour. Limiting such a charge to the recovery of costs would be incompatible with the design of a scheme of this nature.

Nor must the revenues that are collected be used to further the purposes of the regulatory scheme. Rather, the required nexus with the scheme will exist where the charges themselves have a regulatory purpose. There is ample evidence that the fuel and excess emission charges imposed by Parts 1 and 2 of the GGPPA have a regulatory purpose. They cannot be characterized as taxes; rather, they are regulatory charges whose purpose is to advance the GGPPA ’s regulatory purpose by altering behaviour.

Per Côté J. (dissenting in part): There is agreement with the majority with respect to the formulation of the national concern test. There is also agreement that Parliament has the power to enact constitutionally valid legislation establishing minimum national standards of price stringency to reduce GHG emissions. However, the GGPPA is, in its current form, unconstitutional. It cannot be said to accord with the matter of national concern formulated by the majority because the breadth of the discretion that it confers on the Governor in Council results in no meaningful limits on the power of the executive.

Minimum standards are set by the executive, not the GGPPA . Additionally, the provisions

in the GGPPA that permit the Governor in Council to amend and override the GGPPA violate the Constitution Act, 1867 , and the fundamental constitutional principles of parliamentary sovereignty, rule of law and the separation of powers. Clauses that purport to confer on the executive branch the power to nullify or amend Acts of Parliament are unconstitutional. The GGPPA , as it is currently written, vests inordinate discretion in the executive with no meaningful checks on fundamental alterations of the current pricing scheme. The critical feature of the fuel levy established in

Part 1, that being what fuels are covered under the GGPPA , is so open-ended, allowing any substance, if prescribed by the Governor in Council, to fall within the ambit of the fuel charge regime. The operative provisions of

Part 1 similarly prescribe vast law-making power to the executive such that the very nature of the regime can be altered. The full breadth of executive powers can be seen most notably within ss. 166 and 168. The only limit whatsoever on the expansive regulation-making powers set out in s. 166 is that, in amending

Part 1 of

Schedule 1 to modify the list of provinces where the fuel levy is payable, the Governor in Council shall take into account, as the primary factor, the stringency of provincial pricing mechanisms for GHGs (s. 166(3)). No such factor applies to the Governor in Council’s regulation-making powers under

Part 1’s provisions, thus, by virtue of s. 166(4), the executive has a wholly-unfettered ability to amend

Part 1 of the GGPPA . Sections 168(2) and (3) also allow the Governor in Council to make and amend regulations in relation to the fuel charge system, its application, and its implementation. These wide-ranging powers set forth a wholly-unfettered grant of broad discretion to amend

Part 1. Most notably, s. 168(4) states that in the event of a conflict between the statute enacted by Parliament and the regulations made by the executive, the regulation prevails to the extent of the conflict. This breathtaking power circumvents the exercise of law-making power by the legislative branch by permitting the executive to amend by regulation the very statute which authorizes the regulation. Further, it is clear from a review of

Part 2’s provisions that the broad powers accorded to the executive permit the Governor in Council to regulate GHG emissions broadly or regulate specific industries in other ways than by setting GHG emissions limits and pricing excess emissions across the country, despite the majority’s assertion to the contrary. The sole limit on the executive’s expansive discretion found in

Part 2, similar to

Part 1, is in s. 189(2): when amending

Part 2 of

Schedule 1 to modify the list of provinces where the output-based pricing system applies, the Governor in Council shall take into account, as the primary factor, the stringency of provincial pricing mechanisms for GHGs. Again, as in

Part 1, no such factor applies to the Governor in Council’s regulation-making powers under

Part 2’s provisions. There is agreement with Brown and Rowe JJ. that

Part 2’s skeletal framework accords the executive vast discretion to unilaterally set standards on an industry-by-industry basis, creating the potential for differential treatment of industries at the executive’s whim. Therefore, minimum standards are set by the executive, not the GGPPA . Accordingly, the GGPPA cannot be said to establish national standards of price stringency because there is no meaningful limit to the power of the executive. Rather than establishing minimum national standards,

Part 2 empowers the executive to establish variable and inconsistent standards on an industry-by-industry basis. The fact that the executive is permitted to place a number of conditions on individuals and industries at any time, and is moreover allowed to revise those conditions at any time to any extent, is untenable. The GGPPA , as it is currently written, employs a discretionary scheme that knows no bounds. While it is agreed that a matter which is restricted to minimum national GHG pricing stringency standards properly fits within federal authority, the GGPPA does not reflect this crucial restriction.

Moreover, certain parts of the GGPPA are so inconsistent with our system of democracy that they are independently unconstitutional. Sections 166(2) , 166(4) and 192 all confer on the Governor in Council the power to amend parts of the GGPPA . Section 168(4) confers the power to adopt secondary legislation that is inconsistent with

Part 1 of the Act . Executive power to amend or repeal provisions in primary legislation raises serious constitutional concerns. Sections 17 and 91 of the Constitution Act, 1867 , both affirm that the authority to legislate is exclusively exercisable by the Queen, with the advice and consent of the Senate and the House of Commons. This means that every exercise of the federal legislative power must have the consent of all three elements of Parliament. The fundamental principles of the Constitution support this reading of ss. 17 and 19 .

First, although Parliamentary sovereignty could appear to support Parliament’s ability to delegate whatever they want to whomever they wish, this is not the case. Parliamentary sovereignty contains both a positive and negative aspect. The positive aspect is that Parliament has the ability to create any law. The negative aspect, however, is that no institution is competent to override the requirements of an Act of Parliament.

Henry VIII clauses, as found in the GGPPA , run afoul of the negative aspect of parliamentary sovereignty, as they give the executive the authority to override the requirements of primary legislation and create a contradiction within an Act by simultaneously requiring the executive to do something and authorizing the executive to defy that requirement.

Henry VIII clauses are also incompatible with the conception of parliamentary sovereignty that demands an impartial, independent and authoritative body to interpret Parliament’s acts, as they limit the availability of judicial review by providing no meaningful limits against which a court could review. Second, the rule of law, which provides a shield for individuals from arbitrary state action, requires that all legislation be enacted in the manner and form prescribed by law. This includes the requirements that legislation receive three readings in the Senate and House of Commons and that it receive Royal Assent.

When the Governor in Council amends legislation, it does not follow this prescribed manner and thus violates the rule of law.

There are other additional rule of law concerns with the delegation of legislative power to the executive: the delegation of power to amend a statute is generally regarded as objectionable for the reason that the text of the statute is then not to be found in the statute book, which gives rise to confusion and uncertainty; Henry VIII clauses endow the executive with authority to act arbitrarily by permitting it to act contrary to the empowering statute, creating an authority without meaningful limits enforceable through judicial review and thus an absolute discretion; and given that judicial review is constitutionally required, legislation cannot oust review, either expressly or implicitly.

Lastly, the Constitution insists on a separation of powers according to the separation of function among the three branches of government — the legislature, the executive and the judiciary. The executive cannot interfere with the legislative process in a manner that would restrict the power to enact, amend and repeal legislation, despite the important role played by the executive in the legislative process. The separation of powers equally demands that the core function of enacting, amending and repealing statutes be protected from the executive and remain exclusive to the legislature.

Doing so supports the two main normative principles underlying the separation of powers: the legislature is the institution best suited to set policy down into legislation, and limiting the power to enact, amend and repeal legislation to the legislature helps to confine power and prevent an even greater concentration of power in the executive. There is nothing more core to the legislative power than legislating. When the executive usurps this function, the separation of powers is clearly violated.

Per Brown J. (dissenting): The Greenhouse Gas Pollution Pricing Act (“ Act ”) cannot be supported by any source of federal authority, and it is therefore wholly ultra vires Parliament. The Act ’s subject matter falls squarely within provincial jurisdiction. The fact that the Act ’s structure and operation is premised on provincial legislatures having authority to enact the same scheme is fatal to the

constitutionality of the Act under Parliament’s residual authority to legislate with respect to matters of national concern for the peace, order, and good government of Canada under the Constitution Act, 1867 . There is agreement with Rowe J.’s reasons, and therefore Rowe J.’s review of the jurisprudence on the residual POGG power is adopted.

To determine whether an enactment falls within the legislative authority of its enacting body, a reviewing court must apply two steps: first, it must characterize the enactment to determine its pith and substance or dominant subject matter and, secondly, it must classify the identified subject matter, with reference to the classes of subjects or heads of power enumerated in ss. 91 and 92 of the Constitution Act, 1867 .

Where an enumerated head of power is relied upon, the pith and substance of the impugned law is identified at the characterization step, and that pith and substance is then classified under a head of power or class of subjects. Where Parliament relies upon the national concern branch of POGG as the source of its authority to legislate, the analytical process differs.

If it is decided that the pith and substance of the impugned law does not fall under an enumerated head of power, the reviewing court must then consider whether the matter said to be of national concern satisfies the requirements of singleness, distinctiveness and indivisibility as stated in Crown Zellerbach . If so, the matter is placed under exclusive and permanent federal jurisdiction. The dominant subject matter of an enactment is determined by considering its purpose and effects.

The purpose of characterization is to facilitate classification so as to determine whether the Constitution grants the enacting body legislative authority over the subject matter. The legislation’s dominant subject matter must therefore be characterized precisely enough for it to be associated with a specific class of subjects described in the Constitution ’s heads of power.

If an enactment’s subject matter could be classified under different heads of power listed under both ss. 91 and 92 of the Constitution Act, 1867 , then the subject matter should be identified with more precision until it is clear which single level of authority (as between federal and provincial) may legislate in respect thereof. As a sufficiently precise description may well refer to why and how the law operates, it can be appropriate to include reference to the legislative means in the pith and substance analysis.

However, it is not appropriate to do so where describing legislation only in terms of its means would not accurately capture its dominant subject matter or where the description of the means is something that only federal legislative authority can undertake, such as minimum national standards. The determinative consideration in identifying an appropriate level of abstraction should be facilitating the subject matter’s classification among the classes of subjects described in the Constitution ’s heads of power so far as necessary to resolve the case.

In this case, describing the Act ’s pith and substance as relating to the regulation of GHG emissions is too broad because it does not facilitate classification under a federal or provincial head of power. Greater specificity in describing how the legislation proposes to regulate GHG emissions is required so as to determine whether the Constitution grants Parliament legislative authority over the subject matter. However, the inclusion of minimum national standards in the pith and substance of the Act is equally unhelpful.

It adds nothing to the pith and substance of a matter, which is directed not to the fact of a standard, but to the subject matter to which the standard is to be applied. The inclusion of minimum national standards in the pith and substance of a federal statute also effectively decides the jurisdictional dispute, given that only Parliament is capable of imposing minimum national standards ⸺ only federally enacted standards can apply nationwide, and, by operation of paramountcy, only federally enacted standards can be a minimum.

Furthermore, reference to “integral” standards also has no relevance to identifying the Act ’s pith and substance because such a determination would require the Court to consider whether the standards set out in the Act are effective, which is not a valid consideration in the pith and substance analysis. In order to characterize the Act ’s pith and substance appropriately, its purpose and effects must be determined. In this case, the pith and substance of Parts 1 and 2 of the Act must be characterized separately.

While the two parts share a purpose ⸺ the reduction of GHG emissions ⸺ they are otherwise not remotely similar to each other. They each have distinct operational features and the legislative means they employ are mutually distinct. The pith and substance of

Part 1 is the reduction of GHG emissions by raising the cost of fuel. The pith and substance of

Part 2 is the reduction of GHG emissions by pricing emissions in a manner that distinguishes among industries based on emissions intensity and trade exposure. Once identified, the subject matter must be classified, with reference to the classes of subjects or heads of power described in ss. 91 and 92 of the Constitution Act, 1867 . Courts should look first to the enumerated powers, rather than immediately considering whether a statute’s dominant subject matter fits within the residual POGG authority.

In this case, provincial jurisdiction over property and civil rights authorized by s. 92(13) stands out as the most relevant source of legislative authority for the pith and substance of Parts 1 and 2 of the Act . Regulating trade and industrial activity, all within the boundaries of specified provinces, is indisputably captured by this broad head of power, which includes the regulation of business not coming within one of the enumerated federal heads of power, as well as the law of property and of contracts.

In the alternative, the provincial residuum in s. 92(16), granting authority over all matters of a local or private nature, could also authorize Parts 1 and 2.

Part 2, as a deep foray into industrial policy, also falls within matters of provincial legislative authority granted by s. 92(10) over local works and undertakings. Also relevant to

Part 2 is s. 92A, which gives the provinces the exclusive jurisdiction to make laws in relation to the exploration, development, conservation and management of non-renewable natural resources in the province. The identification of several applicable provincial heads of power should be the end of the matter, since all such heads of power are, by the terms of ss. 92 and 92A(1), matters over which the provincial legislatures may exclusively make laws.

By the terms of s. 91, the POGG power applies only in relation to matters not coming within the classes of subjects assigned exclusively to the legislatures of the provinces. This exclusivity of provincial jurisdiction over matters falling under s. 92 is fundamental to the Canadian brand of federalism, and was a unique and deliberate choice by the makers of the Constitution who were concerned about federal overreach via the POGG power. The federal law-making authority for the peace, order, and good government of Canada was intended to be subject to the division of powers.

Within their areas of legislative authority, provinces are not only sovereign, but exclusively so. The Act ’s entire scheme is premised on the provinces having jurisdiction to do precisely what Parliament has presumed to do in the Act ⸺ it operates only where provincial legislative authority is not exercised, or not exercised in a manner acceptable to the federal Cabinet. The Act ’s backstop model is therefore constitutionally impossible: if the provinces have jurisdiction to do what the Act does, then the Act cannot be constitutional under the national concern branch of POGG.

This demonstrates that Parliament has legislated in respect of a matter that falls within provincial legislative authority. Even so, given the majority’s acceptance that some aspect of the Act is truly and distinctly national in scope and lies outside provincial jurisdiction, the question of whether the matter said to be of national concern satisfies the requirements stated in Crown Zellerbach must be considered.

The POGG jurisprudence offers little guidance on the question of whether the pith and substance of the impugned legislation can or should be coextensive with the matter of national concern, or whether the matter of national concern can or should be broader than the pith and substance of the legislation. It would be unprecedented and undesirable to accept that the matter of national concern must

always be the same as the pith and substance of the statute under review, which can include legislative means, because this would effectively confine Parliament to that particular legislative means in responding to the matter of national concern. It is not possible for a matter formerly under provincial jurisdiction to be transformed, when minimum national standards are invoked, into a matter of national concern.

To accept that allocating national targets or minimum national standards can serve as a basis for recognizing that some aspect of an area of provincial jurisdiction is distinctly national in scope, and therefore lies outside provincial jurisdiction, would be to accept a model of supervisory federalism by which the provinces can exercise their jurisdiction only as long as they do so in a manner that the federal legislation authorizes. This would open up any area of provincial jurisdiction to unconstitutional federal intrusion once Parliament decides to legislate uniform treatment.

In this case, a broad characterization of the national concern is unavoidable in order to encompass the pith and substance of both

Part 1 and

Part 2. The matter said to be of national concern can therefore be identified as the purpose of the Act as a whole: the reduction of GHG emissions. This matter does not meet the requirements of Crown Zellerbach for a valid national concern: it fails to meet the requirements of singleness and indivisibility. The fact that harms may cross borders is not enough to make out indivisibility. The matter is divisible because GHGs emissions can be connected to the source province.

Responsibility for the reduction of GHG emissions among the provinces can therefore be readily identified for regulation at the source of the emissions. Nationwide GHG emissions are nothing more than the sum of provincial and territorial GHG emissions. The reduction of GHG emissions therefore lacks the degree of unity required to qualify as an indivisible matter of national concern.

While a provincial failure to deal effectively with the control or regulation of GHG emissions may cause more emissions from that province to cross provincial boundaries, that is insufficient to meet the requirement of indivisibility in Crown Zellerbach . Even if each of the pith and substance of Parts 1 and 2 as proposed matters of national concern are considered on their own, the pith and substance of each

part is not distinct from matters falling under provincial jurisdiction under s. 92; they therefore do not meet the requirements of Crown Zellerbach . The reduction of GHG emissions (whether by raising the cost of fuel, or by pricing emissions in a manner that distinguishes among industries based on emissions intensity and trade exposure) does not have the requisite distinctiveness to be recognized as a matter of national concern because the Act encourages provinces to enact substantially the same scheme to serve the same regulatory purpose.

The provinces clearly have jurisdiction to establish standards of GHG price stringency in the province. The double aspect doctrine has no application in this case. While this doctrine allows for the concurrent application of both federal and provincial legislation, it does not create concurrent jurisdiction. The Act purports to do exactly what the provinces can do, and for precisely the same reason. There are simply no distinctly federal aspects of the reduction of GHG emissions that cannot be divided among the enumerated heads of power.

The imposition of minimum national standards cannot be described as the distinctly federal aspect of the matter. Even were the reduction of GHG emissions a single and indivisible area of jurisdiction, its impact on provincial jurisdiction would be of a scale that is irreconcilable with the division of powers. Because the power to legislate to reduce GHG emissions effectively authorizes an array of regulations and extends to the regulation of any activity that requires carbon-based fuel, it has the potential to undo Canada’s division of powers. GHG emissions simply cannot be treated as a single regulatory matter.

While the Act does not forbid any activity, the charges it imposes will affect the cost of fuel and dictate the viability of emissions-intensive trade-exposed activities. These charges thereby stand to have a profound effect on provincial jurisdiction and the division of powers. The division of powers analysis allows no recourse to balancing or proportionality considerations.

The Constitution Act, 1867 , sets out spheres of exclusive jurisdiction so that within their sphere of jurisdiction, the provincial legislatures are sovereign, which sovereignty connotes provincial power to act or not act as they see fit, not as long as they do so in a manner that finds approval at the federal Cabinet table. The delegation granted by the Act to the Cabinet is breathtakingly broad.

On this point, the guidance provided by Rowe J. is endorsed, both as to the imperative that the division of powers confines the exercise by the federal Cabinet of Parliament’s delegated authority, and as to the appropriate methodology for reviewing regulations for compliance with the division of powers. The long-established principles set down in Crown Zellerbach should not be departed from. The doctrine of stare decisis establishes a high threshold for departing from precedents and that threshold is not met in this case.

There is disagreement with the majority’s modernization of the national concern doctrine and with the three-step framework it adopts, which dilutes the national concern test set down in Crown Zellerbach . The framework adopted results in a new, distinctly hierarchical and supervisory model of Canadian federalism that subjects provincial legislative authority to Parliament’s overriding authority to establish national standards of how such authority may be exercised and replaces the constitutionally mandated division of powers with a judicially struck balance of power, which must account for other interests.

No province, and not even Parliament itself, ever agreed to ⸺ or even contemplated ⸺ either of these features. This is a model of federalism that rejects the Constitution and re-writes the rules of Confederation. Its implications go far beyond the Act , opening the door to federal intrusion ⸺ by way of the imposition of national standards ⸺ into all areas of provincial jurisdiction, including intra-provincial trade and commerce, health, and the management of natural resources. It is bound to lead to serious tensions in the federation.

And all for no good reason, since Parliament could have achieved its goals in constitutionally valid ways. Per Rowe J. (dissenting): The national concern doctrine is a residual power of last resort. Faithful adherence to the doctrine leads inexorably to the conclusion that the national concern branch of the POGG power cannot be the basis for the constitutionality of the Greenhouse Gas Pollution Pricing Act (“ Act ”). Accordingly, there is agreement with Brown J.’s analysis and with his conclusion that the Act is ultra vires in whole.

Federalism is one of the fundamental underlying principles animating the Canadian Constitution. The primary textual expression of the principle of federalism can be found in the division of powers effected mainly by ss. 91 and 92 of the Constitution Act, 1867 . An essential characteristic of the division of powers is its exhaustiveness, which precludes legislative voids and reconciles parliamentary sovereignty and federalism: it ensures that there is no subject matter which cannot be legislated upon and that Canada, as a whole, is fully sovereign.

The exhaustive nature of the division of powers means that matters that do not come within the enumerated classes must fit somewhere. This is dealt with by two residual clauses: one federal, and one provincial. The federal residual clause, the POGG power, comes from the opening words of s. 91 of the Constitution Act, 1867 . The provincial residual clause is in s. 92(16) , and provides that the provincial legislatures may exclusively make laws relating to matters of “a merely local or private Nature in the Province”.

The wording of s. 91 provides textual support for the view that the POGG power is residual to s. 92 , as s. 91 confers the power to legislate for peace, order and good government “in relation to all Matters not coming within the Classes of Subjects by this Act assigned exclusively to the Legislatures of the Provinces”. Further, every conferral of provincial legislative jurisdiction is qualified by words such as “in the Province”, including s. 92(16). The result is that the POGG power is limited to only those matters that are not of a provincial nature, as the residual scope of the POGG power

is narrowed by s. 92(16), which applies to matters that are of a local and private nature even if they do not come within any other enumerated head of power. The scope of s. 92(16) must be interpreted as a counterbalance to the introductory paragraph of s. 91 to reflect the constitutional principle that both Parliament and provincial legislatures must be seen as equals. The POGG power is also residual to the federal heads of power, as the normal process of constitutional

interpretation is to rely first on a more specific provision before resorting to a more general one. Since the POGG power is residual to both the enumerated provincial and federal heads of power, matters that come within enumerated federal or provincial heads of power should be located in those enumerated heads and the POGG power accommodates the matters which do not come within any of the enumerated federal or provincial heads.

There is no reason to hold that a matter falls under POGG when it comes within an enumerated head of jurisdiction and it is not possible for a matter to fall both within the POGG power and within a federal enumerated head of power at the same time. If a matter cannot fit within any enumerated head, only then may resort be had to the federal residual clause. This methodology helps ensure that the federal residual power cannot be used as a tool to upset the balance of federalism by stripping away provincial powers.

Courts have long struggled to define the contours of the POGG power in a way that preserves the division of powers. Early POGG cases suffered from a series of twists and turns, with various national concern statements infusing them at various points. The common theme of these cases, however, is that courts rely on POGG to give effect to the exhaustive nature of the division of powers, but courts have always been cautious to guard provincial jurisdiction and ensure POGG does not become a vehicle for federal overreach.

The POGG jurisprudence should be read as signaling the existence of just two branches: a general residual power and the emergency power. What some commentators have named “gap” and “national concern” are simply manifestations of the exhaustive nature of the division of powers, and the residual nature of the POGG power. Matters that do not come within any enumerated head of power or cannot be distributed among multiple heads of power must fit somewhere, and they belong under POGG when they pass the test set out in Crown Zellerbach .

However, the analysis of the Crown Zellerbach framework would be the same even if there is only one residual authority (POGG) and even if there are three branches to POGG. The national concern doctrine, when properly applied, plays an essential role in achieving the goal that the division of powers be collectively exhaustive, in a way that respects provincial jurisdiction. Matters that do not come within one of the enumerated heads of jurisdiction and that cannot be separated and shared between the enumerated heads of jurisdiction of both orders of government do not fit comfortably within the division of powers.

In order to maintain exhaustiveness, such matters fall under the general residual power of Parliament by virtue of their distinctiveness from matters under provincial jurisdiction and their indivisibility between various heads of jurisdiction. But when the national concern doctrine is improperly applied, POGG ceases to be residual in nature. When that is so, it can become an instrument to enhance federal and correspondingly decrease provincial authority. Courts must be careful in recognizing matters of national concern, because the national concern branch has great potential to upset the division of powers.

Once a matter is qualified as of national concern, Parliament has exclusive jurisdiction over the matter, including its intra-provincial aspects. Thus, an expansive

interpretation of the doctrine can threaten the fundamental structure of federalism and unduly restrain provincial legislature’s law-making authority. It would allow Parliament to acquire exclusive jurisdiction over matters that fall squarely within provincial jurisdiction and flatten regional differences. Courts should never start a division of powers analysis by looking to the federal residual power. To preserve the federal balance, courts should treat POGG as a power of last resort.

The scope of the national concern doctrine must be limited to matters that cannot fall under other heads of jurisdiction and that cannot be distributed among multiple heads, thus filling a constitutional gap. Accordingly, the doctrine only applies to matters which are truly of national concern, as opposed to matters of a merely local or private nature that fall under s. 92(16). The national concern doctrine applies when two conditions are met: first, the matter does not fall within (i.e., it is distinct from) the enumerated heads of jurisdiction and, second, it is single and indivisible.

The requirements of singleness, distinctiveness and indivisibility serve the purpose of identifying matters that are truly residual in two ways. The matter must be distinct from provincial matters and must be incapable of division between both orders of government such that it must be entrusted solely to Parliament. These requirements give effect to the general residual power of Parliament under POGG and ensure that there is no jurisdictional gap in the division of powers.

They apply to both new matters and to matters which, although originally falling under provincial jurisdiction, have come to extend beyond the powers of the province and, due to indivisibility, must be entrusted exclusively to Parliament. Given the residual nature of POGG, the importance of a matter has nothing to do with whether it is a matter of national concern. The role of the general residual power is to maintain the exhaustiveness of the division of powers, not to centralize important matters that can be legislated upon by the provinces or by both orders of government.

First, the impugned matter must be distinct from matters falling under the enumerated heads of s. 92 . This will be met when the matter is beyond provincial reach, including because of the limitation of provincial jurisdiction to matters in the province. This inquiry includes consideration of the provincial residuum: if the matter is of a merely local or private nature, it would fall under s. 92(16). The matter must also be distinct from matters falling under federal jurisdiction, as POGG is purely residual.

Second, even if the matter does not come within an enumerated head of power, it must be single and indivisible to fall under POGG rather than an aggregate that can be broken down and distributed to enumerated heads of jurisdiction. The fact that provinces are unable to deal with a matter is insufficient to conclude that it falls under POGG. The nature of the matter must be such that it cannot be shared between both orders of government and that it must be entrusted to Parliament, exclusively, to avoid a jurisdictional vacuum.

In evaluating whether the matter has a singleness, distinctiveness and indivisibility, it is relevant to consider what is known as the provincial inability test, that is, what would be the effect on extra-provincial interests of a provincial failure to deal effectively with the control or regulation of the intra-provincial aspect of the matter.

The provincial inability inquiry has been designed to control the centralization of powers and to limit the extension of the national concern doctrine to matters that are beyond the power of the provinces to deal with and that must be legislated upon by Parliament, exclusively. Extra-provincial effects, on their own, are insufficient to satisfy the provincial inability test. Rather, the extra-provincial effects must be such that the matter, or part of the matter, is beyond the powers of the provinces to deal with on their own or in tandem.

If the pith and substance of provincial legislation comes within the classes of subjects assigned to the provinces, incidental or ancillary extra-provincial effects are irrelevant to its validity. Evidence that provinces are not cooperating, even combined with the presence of extra-provincial effects, is also insufficient to make out provincial inability. Provinces are sovereign within their sphere of jurisdiction and can legitimately choose different policies than other provinces. Further, provincial inability is no more than an indicium of singleness, distinctiveness and indivisibility.

In line with the residual role of POGG, federal authority over what was formerly within provincial competence is only justified where a matter has become distinct from what the provinces can do, and cannot be shared between orders of government because of its indivisibility. In such a case, reliance on POGG is the only way to maintain the exhaustiveness of the division of powers. Otherwise, there would be a jurisdictional void — if the federal Parliament did not have jurisdiction over such a matter, no one would.

When determining if a matter can pass muster as a subject matter falling under POGG, the final consideration is whether it has a scale of impact on provincial jurisdiction that is reconcilable with the fundamental distribution of legislative power under the Constitution . The evaluation of the scale of impact on the federal balance illustrates the need for caution when determining whether a new permanent head of

exclusive power should, in effect, be added to the federal list of powers. This prong of the test requires courts to determine whether recognizingthe proposed new federal power would be compatible with the federal structure. It does not ask whether the importance of the proposed newfederal power outweighs the infringement on provincial jurisdiction. Importance is irrelevant because it does not indicate whether there is ajurisdictional gap that must be filled with the general residual power. Important matters can and should be dealt with by the provinces.

Courtsmust also be careful not to let the double aspect doctrine undermine the scale of impact inquiry by suggesting that provinces retain amplemeans to regulate the matter. The double aspect doctrine recognizes that the same fact situation or matter may possess both federal andprovincial aspects, which means that both orders of government can legislate from their respective perspective. This doctrine only applies whena subject matter has multiple aspects, some that may be regulated under provincial jurisdiction, and some under federal jurisdiction.

The doubleaspect doctrine must be applied carefully, since increasing overlap between provincial and federal competence can severely disrupt the federalbalance. The combined operation of the doctrines of double aspect and federal paramountcy can have profound implications for the federalstructure and for provincial autonomy. The national concern doctrine must be applied with caution in light of its residual role and its potenti

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