Hearing for carbon tax lawsuit starts

Ontario argues that federal carbon pricing is unconstitutional in rare hearing that allowed broadcast cameras in the courtroom

The Ontario government’s legal challenge over federal government’s right to impose carbon pricing in the province started on Monday in the Ontario Court of Appeal.

Ontario’s case challenging the constitutionality of the federal Greenhouse Gas Pollution Pricing Act is scheduled until April 18 by a five-justice panel.

The federal government started levying a carbon tax on greenhouse gas-emitting fuels on April 1 in the provinces of Ontario, Saskatchewan, Manitoba and New Brunswick. These four provinces refused to establish their own carbon pricing plan.

In December 2016, the federal government, along with most provinces and territories had agreed to the Pan-Canadian Framework on Clean Growth and Climate Change that aimed to introduce provincial carbon pricing systems across Canada by 2018.

The Act imposes levies on gasoline, light fuel oil and propane.

On Monday, in a rare decision, the court allowed cameras to live broadcast the hearing.

Josh Hunter, the lawyer representing Ontario government in the hearing, argued that the federal government is imposing an unconstitutional, unauthorized tax guised as a regulatory charge.

The federal government’s position is that the money raised through the Act is a regulatory charge to encourage behavioural modification.

The Act makes it a requirement for the federal government to pay the money raised through the scheme back to individuals and institutions of Ontario.

The justice panel said in the hearing that the Act dictates distributing 90 per cent of the money raised to individuals living in Ontario and the remaining 10 per cent to Ontario institutions.

Hunter opposed the way the funds are set to be distributed. At this point in the hearing, a number of judges on the panel asked why the people of Ontario getting the money back would not be an ideal outcome.

In response, Hunter argued that the money should be given back to companies that are emitters of greenhouse gases, on the condition that they use the funds to rectify or regulate the ways they are creating pollution.

The court will resume hearing on Tuesday morning when the federal government will submit their arguments.

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Hearing for carbon tax lawsuit starts