Top Class Actions  |  March 27, 2020

Category: Canada

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Carbon tax sign regarding Alberta Justice Minister demanding Ottawa stop collecting carbon tax after Appeal Court ruling

Alberta’s Justice Minister has demanded that the federal government immediately cease carbon tax collection in the province after the Alberta Court of Appeal ruled that the tax violated the constitution and infringed on provincial jurisdiction.

In a 4-1 decision issued last month, the Alberta Court of Appeal ruled that the federal carbon tax wrongfully infringed on Alberta’s right to control its natural resources. The appellate court said the carbon tax was a “constitutional Trojan horse” that would allow the federal government to have an unprecedented amount of control over Canadians.

Justice Minister Doug Schweitzer sent his demand letter to federal Justice Minister David Lametti just two days after the Alberta Court of Appeal issued its decision.

The appellate court ruling will be taken into consideration by the Supreme Court of Canada, which will also hear similar rulings from Saskatchewan and Ontario.

Although the Alberta Court of Appeal’s ruling is not binding, Schweitzer argued that the federal government should immediately stop collecting the carbon tax in Alberta and reimburse consumers for what they’ve already paid.

“The highest court in our province has ruled that the carbon tax is unconstitutional,” Schweitzer told the Globe and Mail. “It is a complete infringement on provincial jurisdiction, and we expect that the carbon tax should be immediately removed on Albertans.”

Schweitzer says that Alberta will pursue legal action if the federal government does not stop collecting the carbon tax. He suggested Alberta may seek an injunction until the Supreme Court of Canada issues a decision on the matter. He also said a class action lawsuit filed by Albertans could be on the table if his demands are not met.

“We would expect that any reasonable person would not impose an unlawful tax on people of a different jurisdiction,” Schweitzer said.

Last May, Saskatchewan’s Court of Appeal issued a 3-2 decision declaring the carbon tax constitutional after concluding that it was legally a regulatory charge and not a tax. The Ontario Court of Appeal in June issued a 4-1 opinion with a similar conclusion. These appellate court decisions have been appealed to the Supreme Court of Canada, which was set to hear the appeals in March.a stop tax sign regarding Alberta Justice Minister demanding Ottawa stop collecting carbon tax after Appeal Court ruled it violated the constitution

It is unlikely the Alberta case will be formally appealed to the Supreme Court of Canada in time to be heard with the Saskatchewan and Ontario appeals. However, it is likely that the matter will be debated in the high court, as the Alberta government is an intervener in the case.

Environment Minister Jonathan Wilkinson has indicated the federal government will not discontinue the carbon tax before the Supreme Court of Canada issues a ruling.

“Ultimately, the arbiter of this will be the Supreme Court,” Wilkinson said. “We clearly have a difference of opinion on this. Two-thirds of Canadians voted for political parties that wanted to see a price on pollution and wanted more aggressive action on climate change.”

The cases filed by Saskatchewan, Ontario and Alberta are reference cases and any decisions reached by the courts are not binding. Reference cases are a process by which governments can seek opinions from a court on constitutional issues. Although they are not binding, governments generally follow the guidance in these opinions, especially when the opinion comes from the Supreme Court of Canada, the country’s highest court.

Some legal experts suggest that the federal government will not take any action regarding the collection of the carbon tax until the Supreme Court of Canada rules on the issue.

“There will be no incentive for the federal government to treat the Alberta Court of Appeal decision as binding or to take any steps as a result of it,” University of Alberta law professor Eric Adams said. “They are fixing their eyes upon the Supreme Court of Canada and will wait to hear the opinion of that final court of appeal.”

The Supreme Court of Canada was originally supposed to hear the carbon tax cases this month. However, GlobalNews.ca has reported that the Supreme Court of Canada will postpone the carbon tax appeals as part of an effort to slow the spread of COVID-19.

According to Chief Justice Richard Wagner, the hearings for the carbon tax cases are tentatively postponed until June. In the meantime, the high court is taking additional measures to reduce the spread of COVID-19, such as closing the Supreme Court building to visitors.

Canada’s courts aren’t the only ones closing its doors to stop the coronavirus spread. Courts in the United States have also shut down and postponed court proceedings until further notice. It’s unclear how long these closures will last for, but criminal and civil actions making their way through court will likely be delayed or scheduled court dates will be rescheduled.

What do you think about the carbon tax collection? Should it continue or should the federal government refund consumers? Tell us your thoughts in the comment section below! 

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