OTTAWA — Baseball manager Tommy Lasorda once quipped that he didn’t like to talk about his troubles because 80 per cent of people didn’t care and the other 20 per cent were glad he was having them.
It’s probably not a bad estimate in most circumstances. Four out of five Canadians likely don’t care that Saskatchewan and Nova Scotia are being penalized unfairly by the new Liberal carbon tax. The vast majority of Canadians live in provinces — British Columbia, Alberta, Ontario and Quebec — that have already put in place carbon pricing plans and they will not see any new tax increases in the next four years.
Brad Wall, the Saskatchewan premier, on the other hand, reacted as if Justin Trudeau was proposing to slaughter the province’s beaver population.
He called the unilateral imposition of the carbon levy a “betrayal,” estimating it will cost the average family in his province $1,250 a year by the time it hits its $50-per-tonne target in 2022.
The province is “investigating its options,” he said, implying that a constitutional challenge is pending.
“We do believe we have a pretty good case for such a challenge,” said one official. “Justice is reviewing this one closely.”
Wall is upset that the province’s carbon capture and storage plan is not considered a mitigation measure under the Liberal plan.
Nova Scotia is similarly irate that its regulatory approach has been discounted by Ottawa, particularly since it is on track to hit the 2030 target of a 30-per-cent reduction from 2005 levels.
Nova Scotia is the only jurisdiction in the world to legislate absolute binding caps on its power sector, said one of the architects of its system, who pointed out it was being discriminated against, despite its superior greenhouse gas-reduction performance.
Scott Brison, the Treasury Board secretary and a local MP, told the CBC that the new regime might have some flexibility built in that could accommodate the efforts the provincial government has already made. “There may be opportunity to take that into account in a carbon pricing model designed by the Nova Scotia government,” he said.
But while environment department officials confirmed that Nova Scotia’s regulated cap on the electricity sector is a step towards a pricing system, Saskatchewan’s CCS is a technological solution and does not fall under the government’s “two lanes” of price-based system — a carbon tax or cap and trade, they said.
The upshot is that it is in the interest of a number of provinces and territories to derail this initiative, with the most likely means being a drawn-out constitutional challenge.
Nathalie Chalifour, associate professor in the Faculty of Law at the University of Ottawa, points out that provinces have successfully challenged federally imposed taxes in the past. The Supreme Court sided with Alberta on a proposed federal excise tax on exported natural gas in the 1980s.
The reason the courts will likely judge the levy constitutional is that it is revenue neutral
But the odds are stacked against the plaintiffs, according to Chalifour. “I’m of the view that Ottawa has the jurisdiction to impose a carbon levy or tax on the provinces,” she said.
The reason is that, while provinces are exempt from federal tax under section 125 of the constitution, a carbon levy could be justified under the Peace, Order and Good Government provision.
In the Alberta case, the Supreme Court decision turned on its determination that the primary purpose of the tax was to raise revenue, which meant it was subject to section 125.
But, said Chalifour, the court has made clear that if a levy is imposed for regulatory purposes, it is not taxation and section 125 doesn’t apply.
At this early stage in the proceedings, it looks like the Liberals have gotten away with it.
The provinces that matter are onside, largely because the carbon price proposed by the feds is so modest it will cause no disruption for any of the sitting governments in this electoral cycle.
In Ottawa, the NDP is too marginalized and the Conservatives too discredited to be serious rallying points for opposition.
Rona Ambrose, the interim leader, is in the U.K., 5,000 km away from the action, and in a telephone interview, it sounded like it.
The party has no new answers on climate change beyond more “targeted regulation.”
But regulation only works if you actually regulate and the Conservatives didn’t — at least not in the sectors like oil and gas that really mattered.
It might appease the zombie army of the unthinking to call the Liberal plan a “heavy-handed and lazy tax grab,” but the reason the courts will likely judge the levy constitutional is that it is revenue neutral.
The Conservatives once dabbled with carbon pricing, committing themselves to a cap-and-trade system in 2008, but they didn’t implement it and now they lack any credibility on the file.
The Liberals have taken, not so much a leap, as a tentative step toward a national plan that meets the international targets to reduce emissions.
Recent opinion polls, not to mention Tommy Lasorda’s rule of thumb, suggest four out of five Canadians back their plan.
• Email: jivison@nationalpost.com | Twitter: IvisonJ
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