Ontario’s Green Energy “Fee”: The Trouble with Taxation through Regulation

Benjamin Alarie and Finn Poschmann
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Benjamin Alarie: University of Toronto
Finn Poschmann: C.D. Howe Institute

No 98, e-briefs from C.D. Howe Institute

Abstract: Canadian provincial governments have broad authority to impose direct taxes by passing enabling legislation in their respective legislatures. Governments may also use regulation to set fees, for example, to recover the cost of services they provide, but cannot use regulation to impose taxes that raise general revenue. Doing so would be unconstitutional. Governments nonetheless sometimes attempt to raise revenue by imposing levies that are deliberately mislabelled as “fees” – past efforts to do so have exposed provincial governments to successful constitutional challenges. This e-brief examines problematic example: the Ontario government recently ordered the Ontario Energy Board to impose a “fee” to be used to fund activities of the Ministry of Energy and Infrastructure; this fee is quite likely an unconstitutional tax.

Keywords: Governance and Public Institutions; Ontario Energy Board; Independent Electricity System Operator (IESO); taxation; regulation; unconstitutional tax (search for similar items in EconPapers)
JEL-codes: H25 H41 H71 L94 (search for similar items in EconPapers)
Pages: 5 pages
Date: 2010-04
New Economics Papers: this item is included in nep-ene, nep-env, nep-pbe and nep-reg
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Citations: View citations in EconPapers (1)

Published on the C.D. Howe Institute website, April 2010

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Persistent link: https://EconPapers.repec.org/RePEc:cdh:ebrief:98

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