Federal carbon levy ruled constitutional


The Supreme Court of Canada (SCC) recently delivered its judgment on the constitutionality of the Greenhouse Gas Pollution Pricing Act (GGPPA). In particular, the SCC heard an appeal from the Provinces of Ontario and Saskatchewan, where the courts of appeal upheld GGPPA as constitutional, and the Province of British Columbia, who had intervened in the Court of Appeal of Alberta who held GGPPA as unconstitutional.  

In a six to three majority decision, the SCC found that the GGPPA is constitutional. The SCC upheld Parliament’s power to enact legislation establishing minimum national standards of price stringency to reduce greenhouse gas emissions under the peace, order and good government (POGG) clause of section 91 of the Constitution Act, 1867

Chief Justice Richard Wagner, writing for the majority, said that if Parliament were unable to constitutionally address the matter at a national level, it may result in irreversible consequences for the environment, for human health and safety, and the economy. 

The SCC also addressed the validity of levies under the GGPPA as regulatory charges. In paragraphs 212 to 219, the SCC held that the levies imposed under GGPPA cannot be characterized as taxes; rather, they are regulatory charges whose purpose is to advance the GGPPA’s regulatory purpose by altering behavior.


Subscribe to our newsletters



Contact us by phone +1.855.420.8473 or submit your questions, comments or proposal requests


Maria Severino

National Tax Leader

Recent Tax Alerts

Federal carbon levy ruled constitutional

The Supreme Court of Canada has issued its decision, upholding the Federal Greenhouse Gas Pollution Pricing Act as constitutional.

  • March 30, 2021

2021 Quebec Budget commentary

The Budget reduces the small business tax rate, proposes QST e-commerce changes and enhances Revenu Quebec’s audit resources and reach.

  • March 26, 2021

2021 Ontario Budget commentary

The Budget implements several tax measures to stimulate the economy and to support businesses and individuals hardest hit by COVID-19.

  • March 25, 2021

Tax updates in Canada in response to COVID-19

Read our summary of tax measures by federal and certain provincial government authorities amid the COVID-19 pandemic through February 2021.

  • March 15, 2021

What to know about Alberta’s Critical Worker Benefit

Here is what you need to know if you are a private-sector employer applying for Alberta’s Critical Worker Benefit.

  • March 10, 2021