Court Of Appeal Finds Federal Impact Assessment Act Unconstitutional

• Published date: 12 May 2022
• Subject Matter: Environment, Government, Public Sector, Environmental Law, Constitutional & Administrative Law
• Law Firm: Borden Ladner Gervais LLP
• Author: Mr Brett Carlson, Matti Lemmens, Chidinma Thompson, Rick Williams and Aidan Paul

Introduction

On May 10, 2022, the Alberta Court of Appeal issued its highly anticipated decision¹ (the Decision) on the constitutionality of the federal Impact Assessment Act (the IAA) and Physical Activities Regulations (the Regulations). Alberta's highest court considered complex legislative and constitutional issues and ruled that the IAA "would permanently alter the division of powers and forever place provincial governments in an economic chokehold controlled by the federal government."²

The federal government has announced its intention to appeal the Decision to the Supreme Court of Canada, which, if upheld, will have significant impacts on the regulation of designated projects and Canada's constitutional division of powers with respect to environmental assessments.

Brett Carlson acted as counsel to the Canadian Energy Pipeline Association in this Decision.

Background

In June 2019, the federal government introduced the IAA, which replaced the Canadian Environmental Assessment Act 2012. In response, the Alberta government launched a constitutional reference before the Alberta Court of Appeal, where it requested the Court's opinion on the constitutionality of the IAA and Regulations.

The IAA is a complex piece of federal environmental legislation that sets out when and on what terms a resource project or activity will be subject to a federal environmental impact assessment.

Put simply, the IAA provides for a mechanism through which the Minister may designate certain projects or activities under the Regulations, which are then automatically prohibited by virtue of s 7 of the IAA if they "may cause effects within federal jurisdiction". The section 7 prohibition applies unless and until the Agency decides under s 16(1) that the project does not require an impact assessment or the proponent complies with the conditions in the decision statement issued for the project following an impact assessment. Crucially, the prohibition and other mechanisms under the IAA are governed largely by the "effects within federal jurisdiction" threshold, which is broadly defined and include potential environmental, socioeconomic, and health related effects.³ Therefore, a key issue in the Decision was the extent to which "effects within federal jurisdiction" actually tethered the IAA to matters within federal jurisdiction.

Majority decision

As a starting point, the majority emphasized that the "environment" is not a head of power that has been assigned to Parliament or...