Justin Trudeau has said he intends to set a national price on carbon. (Photo: Reuters)
The deal called for first ministers to meet again this fall after four working groups reported back on broad policy areas. The aim, Trudeau said at the time, was to finalize "a pan-Canadian plan" to fight climate change. Trudeau also acknowledged that obstacles lay ahead for himself and the premiers. In recent weeks, the issue has re-emerged following public remarks by Trudeau and federal Environment Minister Catherine McKenna. Trudeau told the CBC last week that his government was looking to put a "strong price on carbon right across the country." Earlier this month, McKenna rejected criticism that carbon pricing was simply another tax. "What it is, is pricing pollution — we need to be doing this," McKenna said July 15 in Toronto. "It doesn't discriminate: It just says you will pay less if you pollute less." That same day, McKenna also told Bloomberg that the country will have a national price on carbon emissions by the end of the year. The remarks prompted Wall, who argues Saskatchewan already has a price on carbon with its carbon capture and storage technology, to send a warning to Ottawa in case it's thinking about imposing a solution on the provinces. Wall threatened to launch a constitutional challenge on the basis that governments cannot tax other governments or their Crown corporations. WHAT THE EXPERTS SAY As a general principle of Canadian constitutional law, governments cannot tax one another, as Wall suggested, said Eric Adams, an associate law professor at the University of Alberta. Crown corporations that are government "agents" are also protected from being taxed by another government, he added. Since all of Saskatchewan's Crown corporations are agents of the province, Wall could challenge the federal government if Ottawa tries to tax them. Even the 2015-16 annual report for Saskatchewan's Crown Investments Corp. states they're "not subject to federal and provincial income taxes." "Yes, it's certainly possible," Adams said when asked if Wall could mount a legal challenge, before noting that other factors make it a rather tricky field of constitutional law.
"We will work together to establish national emissions-reduction targets and ensure that the provinces and territories have targeted federal funding and the flexibility to design their own policies to meet these commitments, including their own carbon pricing policies."
Brad Wall wants to protect Crown corporations like SaskPower from a federal carbon tax. (Photo: SaskPower)
Mintz said such a situation could become even messier if the federal government characterized a price on carbon as a regulation. The environment, he noted, is a joint federal-provincial power and the provinces have jurisdiction over their resources. "The devil is in the details," Mintz said. "If it's more like a consumer tax, it's OK, I think. But I don't think you can do that with a carbon tax because it's not meant to be solely a tax on consumers, it's also a tax on businesses and others." THE VERDICT Since Crown corporations like SaskPower and SaskEnergy are legislated as agents of the province, it's entirely possible Wall could launch litigation to ensure they remain exempt from a federally imposed carbon tax, experts say. It's likely a judge would ultimately decide on any court case, but that wouldn't mean that Wall couldn't mount a challenge. For those reasons, Wall's threat of taking Ottawa to court to protect his Crown corporations from a carbon tax contains no baloney. METHODOLOGY The Baloney Meter is a project of The Canadian Press that examines the level of accuracy in statements made by politicians. Each claim is researched and assigned a rating based on the following scale: No baloney — the statement is completely accurate A little baloney — the statement is mostly accurate but more information is required Some baloney — the statement is partly accurate but important details are missing A lot of baloney — the statement is mostly inaccurate but contains elements of truth Full of baloney — the statement is completely inaccurate
"The devil is in the details."
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