On March 25, 2021, the Supreme Court ruled the national carbon tax to be constitutional. In a 6-3 decision, Canada’s highest court cited Parliament’s responsibility to uphold “peace, order and good government” through legislation, making the carbon tax a legal and necessary step to prevent climate change in Canada.
“This matter is critical to our response to an existential threat to human life in Canada and around the world. Climate change is real. It is caused by greenhouse gas emissions resulting from human activities and it poses a grave threat to humanity’s future,” the Court’s decision stated.
The case was brought to the Supreme Court by the provinces of Alberta, Saskatchewan and Ontario challenging the national carbon tax rule that Prime Minister Justin Trudeau put in place in 2019. The federal regulation only kicks in when the province refuses to implement their own. The minimum federal tax is 40 CAD per metric ton as of April 1 and will reach 170 CAD per ton in 2030.
The carbon tax rebate will also remain in place for Canada’s citizens. While the tax applies to business carbon emissions, citizens will be able to collect a rebate to account for the rise in fuel costs over the years. Most Canadian households will actually get more back under the rebate than they pay for the surcharge, the Parliament’s budget watchdog report found.
You can read more Canada’s Supreme Court decision here.