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Winners and losers after the Supreme Court decision on the carbon tax

Photo: Supreme Court of Canada

The Supreme Court decision defending Ottawa’s carbon price has been hailed as a victory for climate activists seeking tougher tax incentives to curb pollution. But it has also been viewed as a loss by some provinces who insist the federal guidelines are nothing more than meddling.

Canada’s high court overruled the objection filed by Alberta, Saskatchewan and Ontario and stated in its ruling that climate change is a threat to Canada.

And while they decide in Canada if the decision is good or not, Jonathan Wilkinson, Minister of the Environment of the Canadian government, stated in a press conference with Mexican media a few days ago that Mexico, the United States and other countries, among which are China and India, must be pressured to reduce their polluting emissions.

Wilkinson noted that Canada is working alongside the United States on joint environmental plans that could include targeting and penalizing countries with weaker climate laws.

The Canadian leader announced that his nation’s plans to deepen climate cooperation with the United States will include complimentary policies that take into account “the emission profiles of industrial competitors around the world.”

The voting

The Superior Court, in its 6-3 decision, ruled that the federal government’s carbon pricing system is constitutional. Under the Greenhouse Gas Pollution Prices Law, now constitutionally approved, the federal government can determine which provinces do not have their own proper emissions pricing scheme and impose a tax. Citizens receive rebates under the Climate Action Incentive to cover any increased costs at the gas station or in energy bills.

In the text declaring the ruling, Richard Wagner, president of the Supreme Court, stressed that the federal government can impose minimum price standards because the threat of climate change is so great that it requires a coordinated national approach.

The judge agreed with Canadian government attorneys who argued that climate change is an urgent matter of national interest and said it is constitutionally legitimate for Ottawa to take the lead in the face of a threat that crosses provincial borders.

‘Price to pollution’

To fulfill its commitments signed in the Paris Agreement, signed in December 2015, which aims to avoid exceeding 2 degrees Celsius above pre-industrial levels, and continue efforts to limit the increase in temperature to 1.5 degrees Celsius, the government of Canada passed legislation in 2018 requiring all provinces to impose some kind of price on pollution, either through a carbon tax or a cap-and-trade regime.

As part of that legislation, Ottawa established national carbon pricing standards with the goal of curbing the use of fossil fuels. The tax, which this year stands at $ 40 per tonne, will increase dramatically in the next decade as Canada seeks to carry out an ambitious economic transition from fossil fuels to renewable sources of energy.

By Silvia Méndez

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