In April of 2018, the Province of Saskatchewan filed a reference case with the Court of Appeal for Saskatchewan, asking whether the Greenhouse Gas Pollution Pricing Act (GGPPA) was an unconstitutional intrusion into provincial jurisdiction. The GGPPA was introduced into Parliament on March 28, 2018 as Part 5 of Bill C-74 and became law on June 21, 2018. It established a federal price on greenhouse gas (GHG) emissions, effective as of January 2019, in any province or territory that has not implemented a compliant carbon pricing regime or any province or territory that requests it. The Paris Agreement was among the laws discussed in the preamble of the GGPPA in regard to the need for a carbon pricing mechanism. On May 3, 2019, the Court of Appeal for Saskatchewan ruled that the (GGPPA) is constitutional in whole or in part by a 3-2 majority.
The Court of Appeal rejected Canada’s broader argument that Parliament has jurisdiction over “the cumulative dimensions of GHG emissions” under the national concern branch of its “Peace, Order, and good Government” [POGG] power. The Court found this approach would exceed the constitutional authority of Parliament and intrude too far into areas of Provincial authority and limit Provincial efforts to deal with GHG emissions. However, the Court did rule that Parliament has more narrow authority under the POGG to establish “minimum national standards of price stringency for GHG emissions” because this authority “has the singleness, distinctiveness and indivisibility required by the law.” Accordingly, the Court ruled that the GGPPA is constitutionally valid under this more narrow POGG authority.
The Attorney General for Saskatchewan appealed the decision to the Supreme Court of Canada. In similar cases, the Court of Appeal of Ontario had also ruled the Act constitutional, while the Court of Appeal of Alberta had ruled it unconstitutional. Both were also appealed and the three cases were heard together before the Supreme Court.
On March 25, 2021, the Supreme Court rejected Saskatchewan and Ontario's appeals and upheld the GGPPA as constitutional in a 6-3 decision. The Court upheld the Act under the POGG power of the constitution, reasoning that climate change was of sufficient national concern to warrant federal jurisdiction, provinces had a constitutional inability to set national GHG emission reduction standards, and the Act's impact on provincial jurisdiction is qualified and limited. The Court wrote that "Canada has adduced evidence that clearly shows that establishing minimum national standards of GHG price stringency to reduce GHG emissions is of sufficient concern to Canada as a whole that it warrants consideration in accordance with the national concern doctrine." Provinces were incapable of addressing the problem in the same way because they could not set a national minimum GHG price, and "a failure to include one province in the scheme would jeopardize its success in the rest of Canada." Further, the Court found that the GGPPA had a limited effect on provincial jurisdiction because it was limited to a narrow regulatory mechanism of pricing, not regulation of all aspects of GHG emissions, and because it only acts as a backstop if provincial pricing is found insufficient.