This is an update to our previous blog on the Alberta Court of Appeal’s reference decision finding the federal Impact Assessment Act (IAA) unconstitutional.
Background: Revamped Federal Environmental Assessment Challenged by Provinces
The IAA and its regulations govern the federal assessment of projects. The IAA was introduced in 2019’s Bill C-69 to replace the previous federal environmental assessment legislation — the Canadian Environmental Assessment Act, 2012. Our environmental law lawyers have previously discussed this transition in the following blogs:
- Controversial Bill C-69 Passed Into Law
- Overhaul of Canada’s Environmental Assessment Regime – The Impact Assessment Act
- Minister Releases Report on Environmental Assessment Process Review
- Federal Government Proposes Changes to Environmental and Regulatory Reviews
In September 2019, the Government of Alberta – supported by the provincial governments of Saskatchewan and Ontario – referred the question of the constitutionality of the IAA to the Alberta Court of Appeal. Various Indigenous, industry and public interest groups also intervened in the reference on both sides of the issue.
The Decision: Balancing Environmental Concerns with Constitutional Requirements
The majority of the five-judge panel recognized the importance of the environment and the impact of climate change, but said the IAA cannot undermine the Constitution’s division of powers. The majority found that the IAA allowed the federal government to oversee projects operating within a province, even projects that may only have minimal impacts on areas of federal jurisdiction. The majority also found that the IAA unconstitutionally permitted federal decision-making authority over projects that Canada determined were not in the public interest, including intra-provincial projects falling exclusively within provincial jurisdiction.
In addition, the majority took aim at several effects of the IAA and found that:
- Some of the factors for triggering an assessment under the IAA were not tied to a federal power or were related exclusively to a provincial power.
- In regulating the “effects” of a project, the IAA includes some effects that are either outside federal jurisdiction or relatively insignificant. A mere effect on a federal power does not justify federal regulation and approval of a project in its entirety.
- The prohibition in the IAA on doing “any act or thing in connection with the carrying out of a designated project” until Canada makes certain decisions about the project imposes severe sanctions and delay for intra-provincial designated projects.
The majority concluded that the purpose and effects of the IAA are not sufficiently tied to a federal power and instead allow Canada to regulate projects that fall solely within provincial jurisdiction such as natural resources, local works and property rights.
The one dissenting justice noted that the environment is an area where both federal and provincial jurisdiction routinely overlap. The dissent would have found that the IAA is constitutional since it only targets environmental effects of a project on areas of federal jurisdiction.
Overall, the majority found that Canada’s ability to use the public interest determination to halt intra-provincial projects was unconstitutional.
What Comes Next?
Canada has an automatic right to appeal the reference decision to the Supreme Court of Canada and has already indicated its intention to do so. Although a reference decision is technically of an advisory nature and not legally binding, a decision by the Supreme Court of Canada will undoubtedly influence the future of the IAA.
Given the federal government’s expected appeal, the federal government may wait until after the Supreme Court of Canada’s decision before considering any changes to the IAA or the impact assessment process.
For projects currently in the federal impact assessment process, the ruling of the Alberta Court of Appeal may not trigger immediate changes to their assessments, especially for projects outside Alberta. However, for participants currently in or about to begin a federal impact assessment process, it will be important to watch how provincial regulators and the federal Impact Assessment Agency react to this ruling, pending its appeal.
The Supreme Court of Canada’s ruling should provide greater clarity on the scope of future federal impact assessments. Our Environmental Law group would be happy to assist you in determining the effect of this decision on you and your organization.
This article was drafted with the assistance of summer law student Eric Turcotte.
Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.