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The Supreme Court of Canada found a large part of the Impact Assessment Act unconstitutional in an advisory opinion issued on October 13, 2023.

The Act and its regulations establish a two-part project review scheme allowing federal authorities to assess certain projects for their potential social and environmental impact. The first part of the review scheme pertains to projects that are financed by federal authorities and/or are carried out on federal land or outside of Canada. This, the Supreme Court found unobjectionable.

However, the remainder of the review scheme aims to regulate all other “designated projects” – major resource and infrastructure projects, such as oil and gas ventures. The regime established under this part of the Act consists of a multi-step process allowing an Impact Assessment Agency to assess such projects for potential adverse effects on, among other concerns, federal lands, other provinces, Indigenous peoples. If substantial adverse effects are found, the Agency can impose restrictions or conditions on the project to minimize negative impacts.

By a 5-2 majority, the Supreme Court, led by Chief Justice Richard Wagner, found the latter part of the scheme to exceed federal jurisdiction. The Chief Justice, writing for the majority, gave two primary reasons for reaching this conclusion:

The scheme’s focus on “designated projects” is overly broad, so that projects that are unlikely to have any adverse effects upon federal jurisdiction still must undergo an impact assessment. The screening process for whether a project qualifies for review by the Agency is not sufficiently rooted in the likelihood of the project’s impact on areas of federal jurisdiction; and
The way that “effects within the federal jurisdiction” are defined “extends beyond the range of conduct that Parliament can validly regulate.” In essence, this allows the federal government to transgress upon provincial jurisdiction to an intolerable extent.

The dissenting judges disagreed that the scheme was outside Parliament’s powers and regarded the Act as constitutional. The fact that there is an overlap in jurisdiction or shared responsibility between federal and provincial authorities is “neither unusual nor unworkable.” They found the review process to “fit within multiple heads of Parliament’s legislative jurisdiction,” and that “the designation process appropriately reflects the precautionary principle and the need to gather information at an early stage of an environmental assessment process, to properly inform federal decision making about whether a designated project may cause adverse federal effects.”

While this decision has no immediate legal effect (as an advisory decision, it is not binding), the federal Minister of Environment and Climate Change has already confirmed that the government is willing to the make the changes necessary to comply with the majority opinion of the Supreme Court. However, he mentioned that any amendments to the legislation “are unlikely to change the outcome” of the review process under the Act.

Please contact our firm at 647-725-4308 or info@greeneconomylaw.com for legal assistance in connection with Canadian environment and policy matters.