Supreme Court rules environmental impact legislation largely unconstitutional

Canada's top court has delivered a highly anticipated judgment, writing in a majority opinion that Ottawa's Impact Assessment Act (IAA) is largely unconstitutional.

The IAA, previously known as Bill C-69, allows federal regulators to consider the potential environmental and social impacts of various resource and infrastructure projects. It was enacted in 2019.

The IAA has long been controversial among conservative politicians in Alberta, including former premier Jason Kenney, who frequently referred to it as the "no more pipelines act."

The ruling was part of a "reference case," which involves the provincial and federal governments asking courts for advisory opinions.

It doesn't mean the law is now off the books — a ruling such as this from the Supreme Court of Canada is not necessarily binding, but is traditionally treated as being binding by governments, noted David Wright, an associate professor in the Faculty of Law at the University of Calgary.

"I think what we can expect is the federal government is going to get to work very quickly to put together a suite of amendments to bring the act into conformity with the law," Wright said.

Details of the decision

Writing for the majority in a 5-2 decision, Chief Justice of the Supreme Court of Canada Richard Wagner said the process set forth in Sections 81 to 91 of the IAA were constitutional and could be separated out.

Those sections involve projects carried out or financed by federal authorities on federal lands, or outside Canada, and therefore fall under federal jurisdiction. Those provisions were not challenged as unconstitutional.

However, Wagner wrote that the balance of the scheme, involving "designated projects," was unconstitutional.

Under the IAA, designated projects are those projects that are set out in the regulations or are subject to a ministerial order.

"In my view, Parliament has plainly overstepped its constitutional competence in enacting this designated projects scheme," Wagner wrote.

Wagner wrote that environmental protection remains one of today's most pressing challenges, and Parliament has the power to enact a scheme of environmental assessment to meet this challenge.

"But Parliament also has the duty to act within the enduring division of powers framework laid out in the Constitution," he wrote.

Dissenting Justices Andromache Karakatsanis and Mahmud Jamal wrote that they believed the act was constitutional in its entirety.

"Environmental protection requires action by all levels of government because each — whether by action or inaction — can affect the environment," the dissenting opinion reads.

"This shared responsibility is 'neither unusual nor unworkable' in a federal state such as Canada. Rather, it reflects this Court's flexible approach to federalism, which recognizes that overlapping powers are unavoidable and intergovernmental cooperation is essential."

Alberta government had previously challenged act

Alberta previously filed a constitutional challenge with the Alberta Court of Appeal, and was supported by the governments of Saskatchewan and Ontario, three First Nations and the Indian Resource Council.

Various environmental and legal groups, as well as other First Nations, supported Ottawa. In a 4-1 decision, the court called the law an "existential threat" when it came to Canada's Constitution.

The federal government appealed that non-binding opinion, and the Supreme Court held hearings on the act in March. Today's decision was keenly awaited by legal experts, who recognized its importance in providing clarity to an area of law that has long been under debate.

Wright, the associate professor in the Faculty of Law at the University of Calgary, said it wasn't the outcome most of those who follow this area of law expected.

"This really does set the the legal landscape for federal impact assessment for decades to come," said Wright, who was also an intervener on the case. "What we now know is that there are significant constraints on what the federal government may or may not do with respect to legislating in relation to environmental assessment."

Though the decision of the majority was that the act was an instance of federal overreach, it did affirm that the federal government has the power to enact environmental assessment legislation, Wright noted.

"But in this case, the federal government went too far in exercising that power, or in trying to exercise the power that they thought they had," Wright said.

Reaction comes swiftly

In a joint statement attributed to Alberta Minister of Justice Mickey Amery and Alberta Premier Danielle Smith, the two stated that they were "very pleased" with the decision.

"Today's court decision significantly strengthens our province's legal position as we work to protect Albertans from federal intrusion into various areas of sovereign provincial jurisdiction," the statement reads.

"Alberta will continue to partner with other willing provinces and interveners in pushing back against these unconstitutional federal efforts using all legal means available to us."

Reaction from across the country came swiftly on Friday, including from Ontario Premier Doug Ford, who said his province welcomed the decision.

"The federal impact assessment process needlessly duplicated Ontario's rigorous and world-leading environmental assessment requirements," Ford is quoted as saying in a statement.

"At a time when it's never been more important to build critical infrastructure, including highways, transit, and critical mineral projects, we now have the certainty we need to get shovels in the ground."

The Canadian Association of Petroleum Producers (CAPP), an intervener in the process, said it was pleased with the decision.

"In the spirit of the court's call for co-operation, CAPP looks forward to collaborating with both the federal and provincial governments to ensure that projects in the national interest — those reinforcing energy security, providing lower emissions energy, and maintaining affordability to Canadians — will proceed in a timely manner," wrote Lisa Baiton, CAPP president and CEO, in a statement.

Federal Environment Minister Steven Guilbeault and Energy and Natural Resources Minister Jonathan Wilkinson held a joint virtual media availability on Friday morning to respond to the ruling.

During that event, Guilbeault said Ottawa respected the role of the Supreme Court and would follow the court's guidance, and work to improve the legislation through Parliament.

"We accept the court's opinion. It provides new guidance on the Impact Assessment Act, while explicitly affirming the right of the government of Canada to put in place impact assessment legislation and collaborate with provinces on environmental protection," he said.

"We developed the Impact Assessment Act to create a better set of rules that respect the environment, Indigenous rights and ensure projects get assessed in a timely way. We remain committed to these principles."

There are currently 23 projects in the federal impact assessment process under the IAA, according to the Impact Assessment Agency of Canada. Eight final decisions have been issued by the minister or the agency allowing those projects to move forward.

More to come.