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Supreme Court rules federal carbon tax is constitutional

Last Updated Mar 25, 2021 at 11:45 am MDT

A campaign worker steams the wrinkles from a large Alberta flag at the venue where United Conservative Party Leader Jason Kenney will address supporters, Calgary, Alta., Tuesday, April 16, 2019. THE CANADIAN PRESS/Jeff McIntosh

OTTAWA — The Supreme Court has ruled that the federal carbon tax is constitutional.

In a split 6-3 decision the top court finds the federal government has jurisdiction to put a price on pollution

The act, passed in 2018, imposes a minimum price on greenhouse gas emissions in provinces that don’t have an equivalent system of their own.

Alberta, Saskatchewan and Ontario all challenged the law in court, saying it infringes on their taxing powers and their constitutionally-protected right to develop their own natural resources.

The carbon price is a critical piece of the Liberal climate plan, but has been fodder for partisan fighting with conservative politicians, provincially and federally, for years.

Chief Justice Richard Wagner said in the written ruling that climate change is a real and existential threat to Canada and the entire world, and evidence shows a price on pollution is a critical element to addressing it.

Wagner also said provinces can’t set minimum national prices on their own and if even one province fails to reduce their emissions it could have an inordinate impact on the rest of the country.

It is a split decision with six judges entirely in favour, one partial dissent and two entirely in disagreement with the majority.

The federal carbon price on individuals and smaller businesses currently applies in Alberta, Saskatchewan, Manitoba and Ontario. The price is applied on the cost of buying fuels, from gasoline and diesel to aviation fuel, coal and natural gas.

At $30 a tonne right now, it adds about 8.8 cents per litre to gasoline, and about $15 a month to an average household natural gas bill.

Ottawa returns the revenues from the carbon price mainly through tax rebates to families in the provinces where the national price is paid.

A separate system for big emitters charges the price on a portion of their actual emissions. It only applies fully in Manitoba and Prince Edward Island.