Feds have right to impose carbon tax on provinces, says U of M law prof

The federal government has the right to impose a carbon tax on Manitoba and other provinces.

Legal opinion says Supreme Court would likely uphold federally imposed levy

A U of M law professor says the federal government has the right to impose a carbon tax on Manitoba and other provinces — but the provinces have a good legal argument to make for their own carbon pricing plans. (CBC)

The federal government has the right to impose a carbon tax on Manitoba and other provinces — but the provinces have a good legal argument to make for their own carbon pricing plans.

That's the opinion given by legal scholar Bryan Schwartz, a lawyer who holds an endowed chair at the University of Manitoba's law school. The province asked Schwartz to give a legal opinion on the constitutionality of the Trudeau government's carbon pricing benchmark and "backstop" proposals.

"If we just say 'no,' we get Trudeau. If we go to court, we lose," Premier Brian Pallister said Wednesday.

"Our alternatives are pretty clear, I would say. We develop our made-in-Manitoba plan and we put it out there."

In December, Pallister refused to sign on to a federal climate plan that included carbon pricing. Instead, he said the province would produce its own "made-in-Manitoba" plan, one more tailored to the province.

On Wednesday, he said details of the plan will be released in the next two weeks.

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Justin Trudeau's Liberals provided details on the federal carbon plan in May, setting a starting price of $10 a tonne on carbon dioxide emissions in 2018, increasing to $50 a tonne by 2022.

The federal government has also proposed a federal carbon pricing "backstop" for provinces that don't impose carbon-pricing systems that meet the federal government's benchmarks.

Manitoba's Progressive Conservative government announced it was seeking a legal opinion in June, to see if Ottawa had the constitutional authority to impose its carbon plan. The premier said the analysis cost the province roughly $40,000.

"We wanted clarity. I certainly did not want to waste a bunch of Manitoba taxpayers' hard-earned money going to Supreme Court and losing," Pallister said.

No option but to charge carbon tax: premier

In his 64-page analysis, released Wednesday by Manitoba Justice Minister Heather Stefanson, Schwartz concluded the federal government has the authority to impose its carbon pricing policy on the provinces, and there's a "strong likelihood" the Supreme Court of Canada would uphold the proposed carbon tax.

U of M law scholar Bryan Schwartz said the federal plan would likely survive a test at the Supreme Court of Canada. (University of Manitoba )

"The 'backstop' nature of the proposed measure, in and of itself, is unlikely to render an otherwise valid federal carbon tax/levy unconstitutional," Schwartz said, in a press release.

Schwartz said, though, the federal government likely wouldn't be able to legislate greenhouse gas emissions in any way it chooses, as it's a shared area of activity between the two senior levels of government.

He said a "credible" argument could be made that a federal government attempt to impose a tax against provinces adopting their own "equally effective" carbon emissions reduction plans could be discriminatory.

In the report, he said such an argument "would likely be considered by the [Supreme] Court as being worthy of serious contemplation."

Pallister said the provinces have been given no choice but to bring in some sort of carbon tax, but his government's plan would give Manitoba the opportunity to decide how that revenue is spent and would include other measures to encourage greener business.

"We've got a lot of ways other than the stick of taxation to work on greening up our province," he said.

A draft version of the Manitoba plan obtained by The Canadian Press in September indicated the province was looking at a $25 per tonne carbon tax — half of what the federal government has insisted must be in place by 2022.

Sustainable Development Minister Rochelle Squires said at the time it was just a draft document, and Pallister refused to comment on it on Wednesday.​

'Picking a fight with the prime minister': Kinew

Opposition NDP Leader Wab Kinew said the province is using "games and delay tactics" instead of introducing its own plan.

"The trouble we have with this premier is we don't know which direction he's going in on climate change, because he's been talking about a plan, there's going to be a plan, we need a legal opinion on a plan — just cut to the chase and show us the plan," Kinew said.

"He's picking a fight with the prime minister without Manitobans knowing what it is that he's actually proposing."

Kinew said it's always been clear the federal government intended to allow provinces to tailor climate plans to suit their circumstances.

"There's really no news on that front, with respect to the premier's comments," he said.

With files from the Canadian Press