Greenhouse Gas Pollution Pricing Act

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Greenhouse Gas Pollution Pricing Act
House of Commons of Canada
  • An Act to mitigate climate change through the pan-Canadian application of pricing mechanisms to a broad set of greenhouse gas emission sources and to make consequential amendments to other Acts
CitationS.C. 2018, c. 12, s. 186
Territorial extentCanada
Enacted byHouse of Commons of Canada
Enacted bySenate of Canada
Assented toJune 21, 2018
CommencedJune 21, 2018
Legislative history
First chamber: House of Commons of Canada
Bill titleBill C-74 (Part 5), 42nd Parliament, 1st Session[1]
Introduced byBill Morneau, Minister of Finance
First readingMarch 27, 2018
Second readingApril 23, 2018
Third readingJune 6, 2018
Committee reportMay 28, 2018
Second chamber: Senate of Canada
Bill titleBill C-74 (Part 5)
First readingJune 7, 2018
Second readingJune 11, 2018
Third readingJune 14, 2018
Committee reportJune 14, 2018
Carbon pricing, climate change
Status: Current legislation

The Greenhouse Gas Pollution Pricing Act[a] (French: Loi sur la tarification de la pollution causée par les gaz à effet de serre) is a Canadian federal law establishing a set of minimum national standards for carbon pricing in Canada to meet emission reduction targets under the Paris Agreement.[2] It was passed as Part 5 of the Budget Implementation Act, 2018, No. 1 – an omnibus budget bill – during the 42nd Parliament of Canada.[3] The law came into force immediately upon receiving royal assent on June 21, 2018.[4]

On March 25, 2021, the Supreme Court of Canada rejected the 2019 appeal of the provinces of Alberta, Ontario, and Saskatchewan and ruled in Reference re Greenhouse Gas Pollution Pricing Act that the GGPPA was constitutional.[5][6][7] Commentators had varying reactions to who the ruling benefited most politically,[8][9][10] with some stating that it represented a blow to the group of conservative premiers that made opposition to carbon pricing a central aspect of their policies.[11]


The aim of the legislation is to put a price on all greenhouse gases that play a significant role in trapping heat in the atmosphere through binding "minimum national standards" on the federal government and all of the provinces and territories of Canada.[12] The standards on pricing are divided into two parts: a regulatory charge on carbon-based fuels and an output-based emissions trading system for polluting industries.[13]

The GGPPA requires that all provincial and territorial governments establish a pollution pricing scheme that meets the national minimum price per tonne of carbon dioxide equivalent and established emission caps under the act.[14] A federally-managed backstop system under GGPPA applies in provinces or territories that do not have a system that meets the criteria or if the province or territory request the federal system be used.[13] As of June 2019, five provinces and two territories are under the federal pricing system for one or both aspects of pollution pricing. The provinces of Ontario, Manitoba, New Brunswick, and Saskatchewan are under both the federal fuel charge and industrial emissions trading system; the territories of Yukon and Nunavut are voluntarily under both systems; and Prince Edward Island is voluntarily under the federal pricing system for industrial emissions trading only.[13] Following the repeal of Alberta's provincial fuel levy on May 30, 2019, the federal fuel charge system will be applied to Alberta beginning January 1, 2020.[15]

All funds collected under the federal system are returned to the province or territory where they are collected. In cases where the provincial or territorial government requested to be part of the federal system, such as Yukon (fuel charge and emissions trading) or Prince Edward Island (emissions trading only), the funds are remitted to the government of that province or territory.[16] Residents of provinces and territories that are under the federal system due to not implementing a pollution pricing system, such as Ontario and New Brunswick, receive their share of the collected charges directly as a tax-free Climate Action Incentive Payment paid out four times per year (until 2022 the CAI was a refundable tax credit on the federal income tax for residents of these provinces intead).[17][18] Approximately ten percent of the money collected from these "backstop provinces" is separately distributed by the federal government for environmental initiatives in those provinces, such as green retrofits of public schools.[19]

Constitutional challenges[edit]

The provisions of the GGPPA were opposed by the governments of Saskatchewan and Ontario, and challenged in provincial courts. They were joined in their legal challenges by several others. For example, under Premier Blaine Higgs, the New Brunswick Attorney General submitted his intention to intervene in Saskatchewan's court challenge of the federal government's carbon pricing plan.[b][20]


On May 3, 2019, the Court of Appeal for Saskatchewan ruled in favour of the federal government in a 155-page 3–2 split decision that concluded that, "The Greenhouse Gas Pollution Pricing Act is not unconstitutional either in whole or in part."[c][21] The federal government argued successfully that the Act was a legitimate exercise of Parliament’s "Peace, Order, and good Government" (POGG) power.[22] Moe said he would bring the case before the Supreme Court of Canada.[22]

On May 31, 2019, Premier Scott Moe filed his appeal of the Saskatchewan decision to the Supreme Court of Canada. He hopes the case will be heard in the fall of 2019.[23]


Following the election of a Progressive Conservative Party government under Doug Ford in the 2018 Ontario general election, Ontario cancelled its participation in the Western Climate Initiative cap-and-trade system.[24] For this reason, the province was deemed non-compliant with the minimum national standards set by the GGPPA and both backstop federal pricing systems were implemented for Ontario on April 1, 2019.[25]

Ontario's Environment Minister Rod Phillips and Attorney General Caroline Mulroney announced a $30 million plan on August 2, 2018, to challenge the constitutionality of the GGPPA in the Court of Appeal for Ontario.[26] The court challenge was opposed by all three of the province's opposition parties.[26] Eighteen parties were granted intervenor status.[27] Intervenors supporting the Ontario government's challenge included the conservative Canadian Taxpayers Federation and Alberta's United Conservative Party (at the time forming Alberta's Official Opposition),[28] while the Assembly of First Nations and environmentalist groups like the David Suzuki Foundation were among the intervenors supporting the GGPPA's constitutionality.[29]

The Court of Appeal for Ontario ruled by a four to one margin on June 28, 2019,[2] that the Greenhouse Gas Pollution Pricing Act was constitutional.[30][31] Specifically, writing for the majority, Chief Justice George Strathy ruled that the law was within federal jurisdiction "to legislate in relation to matters of 'national concern' under the 'Peace, Order, and good Government' [sic] clause of s. 91 of the Constitution Act, 1867."[27]

Justice Grant Huscroft wrote in his dissenting opinion that the decision of the majority could have repercussions to the existing division of powers between the provinces and the federal government.[2] He noted: "federalism is no constitutional nicety; it is a defining feature of the Canadian constitutional order that governs the way in which even the most serious problems must be addressed" and "in effect, [the federal government] has asked the court to sanction a change to the constitutional order – to increase Parliament's lawmaking authority while diminishing that of the provincial legislatures, and to do so on a permanent basis."[27] Huscroft's dissent was described as "traditionalist" in its view of the division of powers and compared to Gérard La Forest, a former puis-ne on the Supreme Court of Canada, by former Attorney-General Peter MacKay.[14]

The Ontario government filed an appeal of the decision with the Supreme Court of Canada on August 28, 2019.[32]

Supreme Court of Canada[edit]

On March 25, 2021, the Supreme Court of Canada ruled that the Greenhouse Gas Pollution Pricing Act is constitutional.[33]

See also[edit]


  1. ^ Full title: An Act to mitigate climate change through the pan-Canadian application of pricing mechanisms to a broad set of greenhouse gas emission sources and to make consequential amendments to other Acts
  2. ^ In November 2018, the Attorney General of New Brunswick submitted his intention to "intervene in the Matter of the Greenhouse Gas Pollution Pricing Act, Bill C-74, Part V, and in the Matter of a Reference by the Lieutenant Governor in Council to the Court of Appeal under The Constitutional Questions act, 2012."
  3. ^ "In The Matter Of The Greenhouse Gas Pollution Pricing Act, Bill C-74, Part 5 And In The Matter Of A Reference By The Lieutenant Governor In Council To The Court Of Appeal For Saskatchewan Under The Constitutional Questions Act, 2012, SS 2012, c C-29.01" (PDF). Court of Appeal for Saskatchewan. Citation: 2019 SKCA 40 (Docket: CACV3239). May 3, 2019.


  1. ^
  2. ^ a b c McGrath, John Michael (June 28, 2019). "What you need to know about the Ontario Court of Appeal's carbon-tax decision". TVO. Ontario Educational Communications Authority.
  3. ^ "Bill C-74". Parliament of Canada.
  4. ^ "Greenhouse Gas Pollution Pricing Act". Act No. S.C. 2018, c. 12, s. 186 of June 21, 2018. Parliament of Canada.
  5. ^ (Supreme Court of Canada March 25, 2021).Text
  6. ^ Tasker, John Paul (March 25, 2021). "Supreme Court rules Ottawa's carbon tax is constitutional". CBC.
  7. ^ FINE, SEAN; BAILEY, IAN; GRANEY, EMMA (March 25, 2021). "Canada's carbon pricing is constitutional, Supreme Court rules". The Globe and Mail Inc.
  8. ^ Coyne, Andrew (March 25, 2021). "The Supreme Court rules. And the winner is … Erin O'Toole?". The Globe and Mail Inc.
  9. ^ Platt, Brian (March 25, 2021). "The dissenting view: Two SCC justices say federal carbon tax 'rewrites the rules of Confederation'". National Post, a division of Postmedia Network Inc.
  10. ^ Cosh, Colby (March 25, 2021). "Federal government plays the 'POGG' card on carbon tax". National Post, a division of Postmedia Network Inc.
  11. ^ Clark, Campbell (March 25, 2021). "The court deals a blow to the already-weakening political opposition to carbon taxes". The Globe and Mail Inc.
  12. ^ "Legislative Proposals Relating to the Greenhouse Gas Pollution Pricing Act". Ministry of Finance. January 2018.
  13. ^ a b c "How we're putting a price on carbon pollution". Environment and Climate Change Canada. Government of Canada. October 23, 2018. Retrieved August 5, 2019.
  14. ^ a b Brean, Joseph (June 28, 2019). "In dissent on carbon pricing, a 'traditionalist' judge puts Ottawa in its place". Postmedia Network Inc. National Post.
  15. ^ "Alberta and pollution pricing". Environment and Climate Change Canada. Government of Canada. June 28, 2019. Retrieved September 25, 2019.
  16. ^ Aiello, Rachel (October 23, 2018). "How federal carbon tax rebates will be doled out". CTV News. Retrieved August 5, 2019.
  17. ^ Ballingall, Alex (May 24, 2019). "Carbon tax rebate claimed by 97 per cent of eligible families so far this year, Canada Revenue Agency says". Toronto Star. Retrieved August 5, 2019.
  18. ^ "Climate action incentive payment". Tax credits and benefits for individuals. Canada Revenue Agency. April 20, 2022. Retrieved July 21, 2022. The CAIP will now be paid as a quarterly benefit. If you are entitled, you will automatically receive your CAIP four times a year, starting in July 2022.
  19. ^ Thurton, David (June 25, 2019). "Ottawa earmarks $60M for school retrofits in provinces that fought carbon tax". CBC News. Retrieved August 10, 2019.
  20. ^ Bissett, Kevin (November 29, 2018). "N.B. to intervene in Saskatchewan court challenge of carbon tax". CTV News. Archived from the original on December 11, 2018. Retrieved December 19, 2018.
  21. ^ "Federal carbon tax is constitutional: Saskatchewan Court of Appeal". Global News, a division of Corus Entertainment Inc. May 3, 2019.
  22. ^ a b "Sask. carbon tax challenge: SK Appeal Court rules in Ottawa's favour". Regina Leader-Post. May 3, 2019. Retrieved May 23, 2019.
  23. ^ Hunter, Adam (May 31, 2019). "Saskatchewan files notice of carbon tax appeal to Supreme Court of Canada". CBC News. Retrieved June 21, 2019.
  24. ^ Rieti, John (July 3, 2018). "Doug Ford is officially ending Ontario's cap-and-trade plan, but what's next?". CBC News. Retrieved August 9, 2019.
  25. ^ Tasker, John Paul (April 1, 2019). "What you need to know: Federal carbon tax takes effect in Ont., Manitoba, Sask. and N.B. today". CBC News. Retrieved August 9, 2019.
  26. ^ a b Loriggio, Paola (August 2, 2018). "Ontario government to challenge federal carbon tax plan in court". Global News. The Canadian Press. Archived from the original on August 3, 2018. Retrieved August 5, 2018.
  27. ^ a b c Strathy C.J.O.; Hoy A.C.J.O.; MacPherson, Sharpe; Huscroft JJ.A. (June 28, 2019). "Reference re Greenhouse Gas Pollution Pricing Act, 2019 ONCA 544". Court of Appeal for Ontario.
  28. ^ Vigliotti, Marco (January 16, 2019). "Parties in Ford government's challenge of federal carbon price get intervenor status". iPolitics. Retrieved August 9, 2019.
  29. ^ Foreman, Gideon (January 28, 2019). "Health organization to support carbon pricing in court". David Suzuki Foundation. Retrieved August 9, 2019.
  30. ^ Perkel, Colin (June 28, 2019). "Federal government's carbon tax is constitutional, Ontario's top court rules". National Post. The Canadian Press. Retrieved July 13, 2019.
  31. ^ Ballingall, Alex; Ferguson, Rob (June 28, 2019). "Ontario's top court rebuffs Doug Ford government's challenge to federal carbon price plan". Toronto Star. Retrieved August 9, 2019.
  32. ^ "Ontario appeals federal carbon tax decision to Supreme Court of Canada". CBC News. August 28, 2019. Retrieved August 30, 2019.
  33. ^ "Reference re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11". CanLII. March 25, 2021. Retrieved March 25, 2021.