Supreme Court Of Canada Upholds Federal Carbon Pricing Regime

In a decision released March 25, 2021, the Supreme Court of Canada ("SCC") ruled that the Greenhouse Gas Pollution Pricing Act (the "GGPPA") is constitutional.¹ The Court confirms that climate change is an existential threat to human life and must therefore be approached in Canada as a matter of national concern through coordinated national and international efforts.

The GGPPA, which came into force on June 21, 2018, set a minimum national standard on greenhouse gas ("GHG") pricing in an attempt to reduce emissions and fulfil Canada's commitments under the 2015 Paris Agreement. For provinces that did not already have a provincially-regulated carbon pricing scheme that meets federal requirements, the GGPPA established a regulatory charge on fossil fuels and a carbon pricing system, the Output-Based Pricing System ("OBPS"). For provinces with carbon pricing schemes that meet or exceed federal standards, the regime established under the GGPPA did not apply.