Canada: Alberta's Highest Court Finds Federal Impact Assessment Legislation Unconstitutional
Environmental Law Bulletin

The Alberta Court of Appeal finds that the Impact Assessment Act over-reached federal authority.

On May 10, 2022 the Alberta Court of Appeal (ABCA) rendered its opinion, sought by the Alberta government led by Premier Jason Kenney, regarding the constitutionality of the federal Impact Assessment Act (IAA) and Physical Activities Regulations (Regulations). ¹

The Alberta government referred two questions to the ABCA:

1. Is the IAA unconstitutional, in whole or in part, as beyond the legislative authority of the Parliament of Canada?

2.Are the Regulations unconstitutional, in whole or in part, by purporting to apply to certain activities that relate to matters entirely within the legislative authority of the provinces?

The ABCA sat as a division of five, and split 4-1, with the majority concluding that both the IAA and the Regulations are unconstitutional and ultra vires the federal government's legislative authority. In other words, in enacting the IAA and Regulations, the federal government acted beyond its powers set out in the Constitution of Canada, encroaching on powers properly allocated to the provinces.

Federal and Provincial Law-Makers Compete for Regulation of the Environment

In Canada, the power to make law is divided between federal Parliament and provincial legislatures through mutually-exclusive heads of legislative power established through sections 91 and 92 of the Constitution Act, 1867. "Environment" is not an established head of legislative power, so either government may enact legislation relating to the environment so long as it can be categorized under a specific head of power within its respective jurisdiction.

In the majority's opinion, the whole IAA offends the division of powers guaranteed by sections 91 and 92 of the Constitution Act, 1867 by granting the federal government a veto power over any project, even projects that would not otherwise be subject to federal jurisdiction or intra-provincial projects whose effects are not sufficiently linked to a federal head of power.

Notably, the majority focused on the regulation of greenhouse gas emissions in the IAA, finding that Parliament is attempting to indirectly regulate a matter it lacks the constitutional right to regulate directly. ² While the Supreme Court of Canada held that it was constitutional for Parliament to establish minimum national standards for greenhouse gas pricing in References re Greenhouse Gas Pollution Pricing Act, ³ the majority observed it did not extend Parliament's power to the regulation of greenhouse gas emissions in general. This would arise in relation to in situ oil sands projects, which typically did not require a federal environmental impact assessment under prior federal environmental legislation. ⁴

The majority concluded that the IAA is not severable and thus the entire scheme, including the Regulations, is invalid and unconstitutional.

Justice Greckol provided the sole dissenting opinion. In her view, both the IAA and the Regulations are a valid exercise of Parliament's authority to legislate with respect to the environment. Justice Greckol held that the fact the provinces have jurisdiction over their natural resources does not preclude federal laws from applying to natural resource projects located in a single province. ⁵ She also emphasized that environmental impacts should be managed by all levels of government -analogizing the issue to Canada geese flying over tailings ponds north of Fort McMurray "without heed for jurisdiction". ⁶ In Justice Greckol's opinion, the IAA can be interpreted so that both provincial and federal assessment regimes operate cooperatively, rather than impermissibly.

The Reference Decision is Not Binding-Yet

The ABCA's decision was rendered in response to reference questions posed by the Alberta government. On constitutional reference cases, a court does not have the authority to make a formal "declaration" with respect to constitutional validity, and provides an opinion only. The opinion is not binding on any person or government, although it will be persuasive. Moreover, courts of one province are not bound to follow decisions of the courts of another province, even on constitutional issues.

The same day the Reference Decision was handed down, Prime Minister Justin Trudeau announced that Canada will be appealing the decision, stating that "the Impact Assessment Act delivered on an important promise we made to Canadians to reform a broken system and restore public trust in how decisions about major projects are made." While a decision of the SCC on the constitutionality of the impugned legislation would be an authoritative statement of the law, its nature would nonetheless remain that of a reference question and non-binding. A decision of the SCC that the legislation is unconstitutional would surely lead to legislative reform. We can expect a decision from the SCC in a year or more, and until then, the legislation remains in effect.

Footnote

1 Reference re Impact Assessment Act, 2022 ABCA 165.

2 Para. 288.

3 2021 SCC 11.

4 Para. 133.

5 Para. 739.

6 Para. 448.

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