Supreme Court: Impact Assessment Act goes too far

Key Takeaways:

• The court found that the law grants the federal government powers that allow it to go beyond the bounds of its jurisdiction as laid out in the Constitution.
• Alberta and industry groups celebrated it as a win for Canadian workers and the economy. 
• Government officials said they accept the ruling and will work quickly to improve the legislation through Parliament.

The Whole Story:

The Supreme Court has ruled that the Impact Assessment Act, which grants Ottawa powers to approve or block major energy or infrastructure projects, is unconstitutional. 

The act, which went into effect in 2019, granted federal officials the ability to determine if projects were in the best interest of the country by taking into account their positive or negative impacts on the environment, economics, health, Indigenous groups and society. 

“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,” the court said in the ruling. “But Parliament also has the duty to act within the enduring division of powers framework laid out in the Constitution.”

The 5-2 ruling determined that the law granted the federal government power to permanently halt projects for reasons that go outside the bounds of federal jurisdiction, calling it “an unconstitutional arrogation of power by Parliament.”

The two dissenting justices wrote that the environment is complex and shared responsibility in Canada, involving various levels of government. They argued that this approach recognizes overlapping powers and emphasizes cooperation. They argued that legislation should be interpreted with respect for constitutional limits, and courts should favor statutes enacted by both federal and provincial governments. 

“This shared responsibility is neither unusual nor unworkable in a federal state such as Canada,” they wrote. “Rather, it reflects the Court’s flexible approach to federalism.”

After it was passed, the law was soon challenged by the Alberta government, with former Alberta Premier called it the “No More Pipelines Act”. The province’s top court determined it was unconstitutional and requested that the Supreme Court take a look. The morning of the ruling, Premier Danielle Smith and Minister of Justice Mickey Amery issued a joint statement applauding the deicision and lamenting the opportunities the act halted. 

“This legislation is already responsible for the loss of tens of billions in investment as well as thousands of jobs across many provinces and economic sectors,” they said. “The ruling today represents an opportunity for all provinces to stop that bleeding and begin the process of reattracting those investments and jobs into our economies.”

Smith and Amery added that the decision is also a massive win for the protection of sovereign provincial rights under the Constitution.

“The federal government, through passage of Bill C-69, and continuing now with their proposed electricity regulations and oil and gas emissions cap, is blatantly attempting to erode and emasculate the rights and authorities of provinces as an equal order of government under the Canadian Constitution,” they said. 

Some construction groups also celebrated the ruling. The Independent Contractors and Businesses Association (ICBA), which supported Alberta as an intervenor in the case, called it an unequivocal victory for Canada’s economy and workers.

“We are thrilled with this decision and what it means for Canadian workers, their families, and everyone who stands to benefit from Canada’s responsibly-produced natural resources during a global energy crisis,” said Mike Martens, president of ICBA Alberta. “The ill-advised and heavy-handed Impact Assessment Act damaged Canada’s economy, prosperity, and the families that depended on it, driving away investment and creating uncertainty. It has been tossed in the trash can, where it belongs.”

Martens added that the group felt it was important to add the voice of Alberta’s construction and resource workers to the province’s case.

“It would have been irresponsible to simply sit on the sidelines and hope for the best in something as damaging to the economic prosperity of Canada as this Act was,” he said. 

According to an analysis from the Canada West Foundation, 25 proponents have submitted projects for review under the new regime since it came into force less than four years ago. All of these projects remain in the first two phases of a four-step process, noted Martens. 

At a press conference, Environment and Climate Change Minister Steven Guilbeault said the federal government accepts the ruling and acknowledged the bill needs to be “tightened.”

“We will now take this back and work quickly to improve the legislation through Parliament,” Guilbeault said. “We will continue to build on 50 years of federal leadership in impact assessment.”