Ontario's top court has ruled the federal government's carbon charge is constitutionally sound.
In a split decision, the five-judge panel rejected a challenge from Premier Doug Ford's government to the validity of the carbon-pricing law.
Ottawa maintains it had to act to deal with the urgent threat of climate change as an issue of national concern.
The federal government said its approach, imposing a levy on gasoline and fossil fuels, respected provincial jurisdiction.
Ontario and three other provinces argued the Liberal government under Prime Minister Justin Trudeau overstepped its authority in imposing the charge.
Last month in a split decision, the Saskatchewan Court of Appeal sided with Ottawa in a similar challenge.