The Hydro-Quebec Decision: Loud Hurray or Last Hurrah?

The Hydro-Quebec Decision: Loud Hurray or Last Hurrah?

(This article appeared in the September 29-October 5 issue of Law Times.)

The Supreme Court of Canada released an important constitutional decision on September 18, 1997 with respect to the division of powers between the federal and provincial governments on environmental matters. Not only does the case have significant constitutional implications, but it will also have important political implications as the federal government attempts to download its environmental roles and responsibilities to the provinces, despite the Court’s affirmation of federal jurisdiction to protect the environment.

The case, Attorney General of Canada v. Hydro-Quebec, dealt with the constitutionality of the federal powers in the Canadian Environmental Protection Act (CEPA) to regulate toxic substances. In 1990, Hydro-Quebec was charged with discharging PCBs into a Quebec watercourse in contravention of an Interim Order made by the federal environment minister pursuant to CEPA. In defending the charge, Hydro-Quebec challenged the constitutional authority of the federal government to enact the Interim Order. All the lower courts, including the Quebec Court of Appeal, found in favour of Hydro-Quebec on the grounds that the Interim Order could not be justified either under the federal criminal law power or the “Peace, Order and Good Government” (POGG) residual power under s.91 of the Constitution Act.

In a 5-4 split, the Supreme Court overturned the Quebec Court of Appeal decision, upheld not only the PCB Interim Order, but also the enabling provisions in CEPA. Mr. Justice LaForest, writing for the majority, upheld the legislation on the basis of the criminal law power. Noting that environmental protection “constitutes one of the major challenges of our time,” he found that the protection of the environment is a public purpose sufficient to support a criminal prohibition. He further held that “the stewardship of the environment is a fundamental value of our society and that Parliament may use its criminal law power to underline that value.” Since the impugned order and the CEPA provisions fell within the criminal law power, the majority did not find it necessary to discuss the applicability of POGG to those provisions.

Writing for the dissent, Chief Justice Lamer and Mr. Justice Iacobucci concluded that POGG could not be used to support the Interim Order or the enabling provisions. While agreeing that environmental protection is a legitimate criminal law purpose, they found that the impugned legislation was regulatory, rather than prohibitive, in nature and as such, outside the domain of criminal law.

There is little doubt that the Hydro-Quebec decision is enormously important. First, the Court clearly expanded the use of criminal law power by declaring that environmental protection (not just protection of human health) is a valid criminal law purpose. Second, the Court has taken a more relaxed view of the differences between prohibitory and regulatory regimes in the context of the criminal law power. Although CEPA includes a broad array of administrative powers that can be used by Cabinet to regulate toxic substances, the majority certainly did not consider this a barrier to having those provisions fall within the criminal law power. Third, despite the dissent, the fact that the majority did not have to rely on the POGG power should send a strong signal to the federal government that its power to regulate toxics is on fairly solid ground. This is particularly germane since the federal government has committed to re-introducing a new CEPA after Bill C-74 died on the order paper during the recent federal election. The fact that Court did not draw fine lines between federal and provincial powers under POGG in the context of toxic substances is a positive attribute of the case. Although some may argue that the criminal law power, as a basis for federal jurisdiction over the environment, may be more restrictive than POGG, it should be called that the POGG power, as defined by the Court in Crown Zellerbach, remains intact and still may be invoked to support federal environmental laws.

The Hydro-Quebec decision, also creates an interesting paradox for the federal government. While the Supreme Court has re-affirmed the federal government’s constitutional authority to regulate toxic substances, and by implication, potentially other environmental matters, the federal government is intending to conclude the “Environmental Harmonization Accord” with the provinces in early November 1997. This Accord would effectively devolve traditional federal environmental roles and responsibilities to the provinces. The Accord and its three sub-agreements focus on inspections, standard-setting and environmental assessment, with at least seven more sub-agreements to follow. While the environmental community has loudly denounced the proposed accord, the federal government appears willing to download environmental responsibilities to provinces, many of which lack the capacity or the political desire to continue progressive environmental reforms. Under the Accord, there is no proposal for any financial transfer, meaning that the provinces will have to do more with less. Ironically, the Ontario Ministry of Natural Resources has just announced it will no longer enforce the federal Fisheries Act because of the lack for federal funding for the endeavour. Further, the Canadian Council of the Ministers of the Environment — not the federal government– will now be the focus of environmental policy-making at the national level. Clearly, there will now be a race to the bottom in terms of standard-setting by the provinces, overseen by a non-accountable and publicly inaccessible body.

The irony is that while the Supreme Court regards the environment as a “fundamental value” and permits the federal government to invoke the criminal law to protect that value, the same government is in the midst of perhaps the largest “garage sale” of its environmental responsibilities in Canadian history.