Blog: Alberta court’s ruling over Impact Assessment Act could end up at Supreme Court

This article was originally published on May 11, 2022 by The Lawyer’s Daily, part of LexisNexis Canada Inc.
Photo of the Alberta Court of Appeal courtesy of ollytheoutlier/Shutterstock

In a lengthy opinion released on May 10, the Alberta Court of Appeal has ruled that Canada’s Impact Assessment Act (IAA) is unconstitutional (Reference re Impact Assessment Act, 2022 ABCA 165). 

In September 2019, the Alberta government initiated this constitutional reference by requesting the court to determine two questions: 

  • Is the IAA unconstitutional, in whole or in part? 
  • Is the regulatory list of designated projects under the IAA unconstitutional, in whole or in part? 

The IAA reference was heard via videoconference by a five-judge panel in February 2021 and involved numerous parties and interveners. 

The reference focused on the nature, scope and effect of the IAA, which establishes a public process for gathering information and making decisions about the impacts of major projects on defined areas of federal responsibility (e.g., fisheries, aquatic species at risk, migratory birds, Indigenous peoples, etc.). The list of designated projects that are currently subject to the IAA include new or expanded mines, pipelines, nuclear waste sites and energy generation undertakings. 

However, Chief Justice Catherine Fraser and Justices Jack Watson and Bruce McDonald opined that the IAA and regulations are ultra vires because they interfere with the provinces’ jurisdiction over their natural resources and other matters under ss. 92 and 92A of the Constitution Act, 1867. A separate concurring opinion was provided by Justice Jo’Anne Strekaf. 

The majority opinion declared that the IAA represents an “existential threat — one also pressing and consequential — and that is the clear and present danger this legislative scheme presents to the division of powers guaranteed by our Constitution and thus, to Canada itself.” (para. 6). 

The majority opinion went on to determine that the assessment process under the IAA essentially imposes “a regulatory regime on all intra-provincial designated projects on provincially-owned as well as provincially-controlled lands (para. 14). Similarly, the majority opinion described the pith and substance of the IAA in a broad manner: “the establishment of a federal impact assessment and regulatory regime that subjects all activities designated by the federal executive to an assessment of all their effects and federal oversight and approval” (para. 31). 

Given this characterization of the IAA, the majority opinion concluded that the legislative regime cannot be upheld under any federal heads of power: 

“When applied to intra-provincial designated projects, this subject matter does not fall under any heads of power assigned to Parliament but rather intrudes impermissibly into heads of power assigned to provincial Legislatures by the Constitution Act, 1867.” (para. 31). 

In reaching this conclusion, the majority opinion distinguished the landmark decision of the Supreme Court of Canada in Friends of the Oldman River Society v. Canada [1992] 1 S.C.R. 3 on the grounds that the IAA materially differs from the federal environmental assessment process that was upheld in that case: 

“The IAA is a classic example of legislative creep. The federal government appears to have taken the Supreme Court decision in Oldman River upholding the federal government’s Environmental Assessment and Review Process Guidelines Order, SOR/84- 467 [Guidelines Order] as a license to systematically expand federal powers under the environmental umbrella. The IAA, with its intrusions into provincial jurisdiction, is far removed from the federal environmental assessment legislation that the Supreme Court found constitutional in Oldman River (para. 10).” 

The majority opinion further stated that by enacting the IAA, “Parliament has taken a wrecking ball to the constitutional right of the citizens of Alberta and Saskatchewan and other provinces to have their 92A natural resources developed for their benefit” (para. 28). Moreover, the majority opinion suggested that it would be discriminatory “to deprive Alberta and Saskatchewan, which together have the vast majority of oil and gas reserves in this country, of their constitutional right to exploit these natural resources” … . (para. 29). 

Concern was also expressed in the majority opinion that the IAA “allows the federal government to pick winners and losers” (para. 26) and that the IAA raises “legitimate concerns about stranding oil and gas resources in this country as the world transitions away from fossil fuels to a greener economy.” (para. 30). 

In an extensive dissenting opinion, Justice Sheila Greckol found that the IAA and the designated projects regulation are intra vires Parliament since “the project-based federal environmental assessment regime in the IAA and Regulation target effects in federal jurisdiction.” (para. 443). 

This dissent noted that “constitutional decisions to date lead to the conclusion that both Parliament and the provinces have authority to pass laws with respect to the environment, including with respect to the impact upon the environment of physical activities and designated projects in the resource sector, each with respect to the aspect of the environment within their own constitutional authority.” (para. 449). 

The dissenting opinion characterized the IAA regime in the following manner: 

“In my view, the pith and substance of the IAA and Regulation is to establish a federal environmental assessment regime that facilitates planning and information gathering with respect to specific projects to inform decision-making, cooperatively with other jurisdictions, as to whether the project should be authorized to proceed on the basis that identified adverse environmental effects purported to be within federal jurisdiction are in the public interest.” (para. 593). 

Having identified the subject matter of the IAA, the dissent upheld the legislative scheme under various federal heads of power under ss. 91 and 132 of the Constitution Act, 1867 (paras. 599 to 670). 

Given the national significance of the jurisdictional issues in dispute, the federal government has promptly announced that it intends to appeal this matter to the Supreme Court of Canada. 

Richard Lindgren is a staff lawyer at the Canadian Environmental Law Association and was co-counsel for three interveners in the IAA reference.