On Friday October 13, 2023, the Supreme Court of Canada declared the "designated project" scheme of the Impact Assessment Act (the "Act") to be unconstitutional.1
In Canada, both the federal and provincial governments have roles to play, but each must confine their efforts in accordance with their areas of jurisdiction set out in the Canada's Constitution. This decision considers that shared legislative responsibility over the environment.
In 2022, the Alberta Court of Appeal, in response to a "reference" question brought by the government of Alberta, concluded that the Impact Assessment Act is outside the jurisdiction of the federal government to pass, andtherefore unconstitutional.2 This decision was appealed by Canada to the Supreme Court of Canada.
Conclusions of the Supreme Court of Canada
Canada's Chief Justice, writing for the majority of the Court, found that the "designated projects" scheme of the Act to be unconstitutional. The Act overreached into the exclusive legislative jurisdiction of the provinces (including property and civil rights and natural resources) for the following reasons:
- Decision-making under the Act is not driven by consideration of
effects within federal jurisdiction:
- Screening Phase: The Act provides broad discretion to require an impact assessment on bases not connected to possible adverse federal effects. Instead, "the decision to require an assessment must be rooted in the possibility of adverse federal effects."3
- Decision-Making Phase: The scope of the "public interest" decision at the end of an assessment is too broad. The Act's public interest determination allows for a decision-maker to consider whether the project as a whole is in the public interest, instead of being limited to whether the adverse federal effects are in the public interest.4
The Court warned that without limiting the consideration of broad factors, likesustainability or Canada's climate change commitments, the legislation risks a negative public interest decision being made based on effects outside of federal jurisdiction.5
- The definition of "effects within federal jurisdiction" in the Act extends beyond federal legislative jurisdiction. The overbreadth of this definition permeates the scheme as a whole, including the designation of physical activities as designated projects, the public interest decision, and the effects-based prohibitions in section 7 of the Act.6
The definition captures an unlimited range of interprovincial environmental changes. Such broad regulatory powers in the Act are impermissible.7 This would, for example, permit projects to be designated (and public interest decisions to be made) on the basis of interprovincial greenhouse gas emissions.8
The Court acknowledged that a "designated projects" scheme in principle is not problematic. Instead, the issue was how it was being applied. In addition, the assessment phase need not be confined to effects within federal jurisdiction. It is necessary and appropriate for assessments to gather a broad range of information, including beyond federal effects.9 However, the designation and public interest decisions must focus on federal effects.
The Court declared the non-designated project portion of the Act set out in sections 81 to 91 to be constitutional. This portion concerns physical activities that are carried out or financed by federal authorities on federal lands or outside of Canada. The Court considered this procedure as clearly falling within federal legislative competence.
Implications
The Court's decision, being an appeal from a response to a reference question, is advisory in nature. The Court's decision does not strike down the Act. However, it will undoubtedly require Canada to amend or reform the legislation in accordance with the Court's guidance.
The Minister of the Environment and Climate Change Steven Guilbeault has stated that the government respects the decision and that it will work to improve the Act through Parliament, using the SCC's guidance.However, he noted that, until then, assessments of projects currently in the process would continue. Minister of Natural Resources, Jonathan Wilkinson stated that he expects government will be able to make the necessary amendments in a "relatively surgical way".
Nonetheless, the decision will likely delay projects currently undergoing impact assessments or at the screening phase. Screening decisions and public interest decisions will likely not be made until Parliament has amended or reformed the Act.
Project proponents should consider the specific implications of the decision to their own projects if those projects have been, are, or would be subject to a federal impact assessment. The specific circumstances of each project will inform the decision's implications.
Footnotes
1. Reference re Impact Assessment Act, 2023 SCC 23; Chief Justice Wagner wrote the majority decision (for five justices). Two justices dissented.
2. Reference re Impact Assessment Act, 2022 ABCA 165.
3. Para. 150
4. Para. 166 & 169
5. Para. 177
6. Para. 181-182 & 190.
7. Para. 186.
8. Para. 184
9. Para. 157 & 159
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
