Syncrude Canada Ltd. v. Attorney General of Canada

Cette page en français: Syncrude Canada Ltd c. Canada (Procureur général)

In 2011, Canadian oil company Syncrude challenged a government regulation that at least two percent of the content of diesel fuels be renewable. This law was enacted as part of the federal government's policy toward climate change. Syncrude requested an independent review of the legislation setting these standards, which was subsequently denied by the federal government. Syncrude then challenged the validity of the legislation in Federal Court, which dismissed their case. Syncrude further appealed to the Federal Court of Appeal where Justice Rennie wrote the decision dismissing Syncrude's challenge.

Background
Enacted in 1999, the Canada Environmental Protection Act (CEPA) section 139 prohibits the production, importation, and sale in Canada of fuel that does not meet certain requirements. CEPA goes on to give the Ministry of Environment the ability to enact regulation for carrying out the purpose of section 139. Regulations must abide by other specific requirements, of which one states in subsection 140 that the regulation must: "make a significant contribution to the prevention of, or reduction in, air pollution”.

Under subsection 140 the Renewable Fuels Regulations were enacted, whose express purpose was carrying out CEPA. Syncrude was challenging these regulations. In particular, that 2% of diesel fuel to be renewable fuel. Upon being denied a federal review of the legislation, Syncrude challenged the constitutional validity of the regulation. They argued that because there was no criminal law purpose, the regulation overstepped into provincial jurisdiction on regulating non-renewable resources. Upon dismissal in Federal Court, Syncrude appealed the ruling.

Relevant Laws and Principles

 * Canadian Environmental Protection Act
 * Canadian Distribution of Powers
 * Renewable Fuels Regulations

Ruling
Syncrude's primary argument on appeal was that a 2% requirement is not an outright ban. Furthermore, since there is no direct evidence of "significant contribution to the prevention of, or reduction in, air pollution", the regulations were inherently enacted to create a local economic market, rather than to promote the purposes of CEPA. The appeal judge makes two arguments on this submission. First, J. Rennie argues that the end does not inform the means. Although there may not be tangible evidence of reduction of Greenhouse Gases (GHGs)that does not mean the regulations were made without this purpose. Arguing that the end goals were not achieved does not suffice to conclude that the method used to achieve this goal had an entirely different underlying motivation.

Second, even if there was tangible evidence demonstrated in court that a 2% reduction of diesel could never reduce GHGs, the Ministry of Envrinment may still very well be in their right to impose these regulations based on conflicting evidence that demonstrates the GHG reducing effects of the legislation. In this scenario, it is not the court's role to select one policy over another based on conflicting evidence. In short, the efficacy of the RFR, while disputable, does not take away from the government's right to impose this legislation with the express goal of reducing GHGs. The case was dismissed and no further appeal was considered.

Links

 * Sabin Center Database
 * Appeals Decision