“A long litigation process may see this resolved politically before it’s ever resolved legally,” mused Eric Adams, from the University of Alberta.
University of Alberta law professor Eric Adams says the constitutional arguments that form the basis of Saskatchewan’s case against carbon tax payments will likely be a “challenge” to prove in Federal Court.
“Some of them may stick, and others may slide off the table,” predicted the constitutional law expert in a recent interview with the Leader-Post.
CRA attempted to claim $28 million in June and again in July. Saskatchewan confirmed as of Friday that no funds have been taken.
The litigation in its entirety is seeking a judicial review on the federal government’s position that Saskatchewan owes the unpaid levies under the provisions of the Greenhouse Gas Pollution Pricing Act (GGPPA).
“There are some fundamental questions about the workings of environmental legislation and about the relationship between levels of government, all being placed under the spotlight in this particular dispute,” said Adams.
“It would be a little surprising if judges turned around and found the basis of the Supreme Court of Canada’s decision now no longer holds,” he said.
Adams also described Saskatchewan’s assertion that the federal government cannot go after owed taxes from a province as “challenging to win” given the institution of tax law.
“It’s true that federal and provincial governments in Canada have traditionally been regarded as of the same status — one is not in charge of the other in our system of government — but the difficulty here is that you’ve got valid federal law that has to be enforced,” said Adams. “I think it will be challenging for Saskatchewan to argue that it is exempted from taxation.”
As for claims that carbon pricing is being applied unequally for “partisan political purposes,” Adams suggested it’s a mountainous task to prove that the federal stance is “any more political” than other potential exemptions, like on fuel used for farming.
Should the courts reject Saskatchewan’s arguments, Adams said the result will be that the province is on the hook for the withheld $56 million and counting as “a tax liability that it must pay.”
Conversely, if the court finds them convincing, it could spell trouble for the future of the Liberals’ keystone environmental policy or any other policies with financial mechanisms.
“It could pretty dramatically alter the fortunes of the GGPPA and similar kinds of regimes, because it would suggest that there is no real way for Parliament to enforce valid legislation of this kind,” said Adams.
He anticipates this case will see “a long judicial process,” potentially months or years, likely escalating to at least the Federal Court of Appeal. Saskatchewan Attorney General Bronwyn Eyre has suggested she expects it may reach the Supreme Court.
Adams hypothesized there may be strategy on the province’s part for a drawn-out timeline in hopes the “political context around carbon pricing may change in the interim.”
“Certainly the Conservative Party of Canada has not been shy about indicating that it would take a different approach to carbon pricing,” Adams said in reference to a looming federal election that’s due no later than October 2025.
Premier Scott Moe has made no secret that he sees Conservative Party leader Pierre Poilievre as an Ottawa liaison whom his party “would view as being able to work collaboratively with” on issues like carbon pricing.
“A long litigation process may see this resolved politically before it’s ever resolved legally,” mused Adams.
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