Prof. Ben Alarie co-authors report: "Ontarioís Green Energy ìFeeî Likely Unconstitutional"

Prof. Ben Alarie has co-authored a report for the C.D. Howe Institute, released on April 22, 2010, that argues that the Ontario government’s green energy "fee," which the Ontario Energy Board collects from electricity distributors, amounts to  taxation through regulation, and is likely unconstitutional.

In "Ontario’s Green Energy “Fee”: The Trouble with Taxation through Regulation," Alarie and Finn Poschmann, Vice-President of Research at the C.D. Howe Institute, argue that the fee is quite likely a  tax that could and should be struck down by a constitutional challenge.

Ontario’s new regulation directs the Ontario Energy Board to assess a special levy on the Independent Electricity System Operator (“IESO”) and distributors, assessed in proportion to the amount of electricity they distribute. The levy is designed to collect $53.7 million from ratepayers, to fund activities of the Ontario Ministry of Energy and Infrastructure.

However, the authors examine the differences between fees and taxes and argue that the levy is legally a tax. Provinces have broad authority to impose taxes under the Constitution, they note – but taxes require explicit enabling legislation, which the Ontario levy lacks. 

Read the full report on the C.D. Howe Institute website (PDF).

Read the authors' commentary on this issue in the National Post ("Ontario’s quiet taxes through regulation," April 22, 2010).