The Alberta Court of Appeal has ruled the federal government's carbon tax unconstitutional, proving the move to be an overreach by Canada's Liberal government.
Albertans have been under the federal tax since the beginning of 2020. It kicked in after Alberta Premier Jason Kenney nixed the province's own carbon tax, but the UCP government vowed to fight the federal version in court.
The Alberta Court of Appeal's decision differs from those of other provincial appeal courts in Saskatchewan and Ontario, making our court the first to rule against the federal tax. In doing so, the court described the tax as a "constitutional Trojan Horse" and an intrusion by the feds into provincial jurisdiction.
The fight isn't over yet. The carbon tax is now destined for the Supreme Court of Canada, which is set to hear Saskatchewan's appeal of the carbon tax next month.
While the Alberta Court of Appeal's decision is vindication of a sort for the Kenney government, which continues to hammer both the former NDP government and the federal Liberals for their respective carbon taxes, Albertans should not take this as absolvement from addressing the issue of climate change. Different rulings from different courts muddy the water and serve to show just how deeply divided Canada is on this issue. The Supreme Court will rule once and for all on the federal tax itself, but our country still faces a broader discussion about what climate policies serve us best.
The uproar Canadians have created about the carbon tax should send a message to Prime Minister Justin Trudeau that he cannot tax his way out of climate change. In the absence of a federal carbon tax, Canada would still lack the necessary regulatory policies to attract investment and keep our economy burning. The recent decision by Teck to shelve its Frontier project exemplifies that. Teck's decision is also a warning to Kenney that we cannot fight our way out of climate change either – we must address it together.
We are already seeing the fallout from Teck's decision. The Frontier project would have brought thousands of jobs and billions of dollars in investment to the country, if it had ever gotten off the ground. Teck cited changes in global capital markets and an increased focus by investors on jurisdictions with frameworks that reconcile "resource development and climate change, in order to produce the cleanest possible products."
It's an indictment of Trudeau's efforts to combat climate change – and, more broadly, the flailings of Canada's various provincial governments to pander to their political bases instead of engaging in a responsible discussion about solutions.
As The New York Times recently reported, several of the world's largest financial institutions have declared they will be pulling away from investing in Alberta oil production because of relatively high greenhouse gas emissions: BlackRock, the world's largest asset manager; insurance giant The Hartford; and HSBC, the largest bank in Europe, to name a few.
Investment firms worldwide are paying attention, and Teck's withdrawal should bring home to Canadians how important it is for us to reconcile Canada's energy industry with climate change. Our economic future depends on it.
