The Alberta Court of Appeal recently released its advisory opinion in the Reference re Impact Assessment Act, with a 4-1 majority finding the federal Impact Assessment Act and the Physical Activities Regulations to be unconstitutional. A majority of the Court found these to be a federal overreach into areas of exclusive provincial jurisdiction by subjecting intra-provincial activities and resource development to federal oversight and approval.
A new regime
The Impact Assessment Act (the “IAA”) is the most recent piece of Canada’s comprehensive federal environmental assessment regime. Replacing the framework in the Canadian Environmental Assessment Act, 2012 in 2019, the IAA provides a federal regime for assessing the impacts of projects designated by the federal government, and establishes a federal decision-making process for these designated activities. This regime includes a required public interest determination by the federal executive before a project is able to proceed. The list of designated activities, as set out in the Physical Activities Regulations (the “Regulations”), includes certain mining projects, hydroelectric projects, highways, dams, waste treatment facilities, oil sands facilities, and oil and gas extraction, processing and storage facilities above the prescribed production-based thresholds.
At the heart of the issue decided upon by the ABCA is the fact that some of the designated projects under the IAA are often located entirely within the borders of a province, stirring up questions about the scope of the IAA’s power and its impact on provincial jurisdiction.
A ‘legislative creep’
The majority of the ABCA found that the IAA and the Regulations create 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.” When applied to intra-provincial designated projects, this purpose does not fall under any heads of power assigned to Parliament but rather impermissibly intrudes into heads of power assigned to provincial Legislatures by the Constitution Act, 1867.
The majority emphasized that the IAA is a classic example of a ‘legislative creep’, as the legislative scheme gives the federal government “an effective veto over every intra-provincial designated projects in this country.” Through the requirement under the IAA for a positive federal public interest determination and the use of prohibitions, fines and injunctions, the reality is no intra-provincial designated project is able to proceed without the express approval of the federal executive.
In the single dissenting opinion, Greckol, JA found the IAA to be a valid, constitutional exercise of federal jurisdiction. Its goal is to facilitate planning, information gathering, and decision-making cooperatively with other jurisdictions while regulating effects within federal jurisdiction and determining whether such effects are within the public interest.
Conclusion
Environmental impact assessments play a vital role in achieving sustainable economic development. While the ABCA’s advisory opinion does not currently have any legal impact on the IAA, it has the potential to significantly effect the regulation of projects in Canada, and fundamentally change the scope of federal decision-making over intra-provincial projects not otherwise subject to federal regulation.
As Canada has already announced its intention to appeal the ABCA’s decision to the Supreme Court of Canada, the constitutionality of the IAA and the interaction of federal and provincial powers in the regulation of resource development in Canada is not yet settled.
Further analysis of the decision by our Energy Innovation and Transition team is available here.
