Backgrounder | What you need to know about the Supreme Court of Canada Reference on Impact Assessment Act
Author: Colleen Collins, Vice-President, Canada West Foundation
On March 21 and 22, the Supreme Court of Canada will hold a hearing on the constitutionality of the federal Impact Assessment Act. The court challenge hinges on whether or not the federal government overstepped its authority with respect to making decisions on major project approvals.
The Canada West Foundation (CWF) has been working on the Impact Assessment Act since it was in prenatal form as Bill C-69, and we are still working on solutions to the issues in the case and others.
- What is this Supreme Court Case about?
- Why does it matter?
- What can we expect from these two days of hearings?
- What will happen next, after the Court hears the arguments?
What is the case about?
This case is about constitutional jurisdiction: specifically which order of government has final authority to approve major resource projects within a province.
With the Impact Assessment Act, the federal government assumes broad assessment and decision making powers that arise from its environmental protection responsibilities. The provinces submit that those powers go far beyond what has been regarded as federal responsibilities for the environment so as to infringe upon not only their own environmental responsibilities but also fundamental provincial jurisdiction to manage and develop natural resources.
Why it matters
At stake is fundamentally the ability for provinces to manage development of their natural resources, the nature of their economy and resource income for the owners of the resource. There are many important considerations involved in approving major projects – but this case turns on whose assessment process or processes are used and ultimately who has the final approval decision.
This decision could have important implications for the oil and gas sector (the validity of emissions caps), but also for electricity generation (the validity of the proposed Clean Electricity Standards), as well as for mines (for critical minerals and otherwise).
The decision may also have implications for competing views of constitutional division of powers.
The federal view is an evolving one –the “Cooperative Federalism” perspective adopted by the federal government moves away from assigning jurisdiction solely to one or other order of government according to sections 91 and 92 of the constitution. The idea is that in complex areas like environment responsibilities there is considerable overlap and uncertainty. The trick is how that plays out when a final decision must be made. Who has the final say? How is process determined? What does cooperation look like – consultation, collaboration, joint agreement, or one party making the rules and the final decision. The federal argument does refer to its constitutional authority arising from its “heads of powers” but goes on to include broad public interest factors like sustainability and climate change.
The Alberta (and 7 other province’s) perspective is based more closely on the division of powers perspective. Provincial projects should be assessed and approved by provincial regulators – federal impacts would be addressed at the permitting stage.
What can we expect over the two days of hearings?
Written arguments (factums) have been filed with the court by the two main participants – the Government of Canada and the Government of Alberta – as well intervenors on behalf of each side. Seven provinces have intervened on behalf of Alberta (P.E.I. and Nova Scotia did not intervene and B.C. straddles the fence and introduces a very useful solution.).
Over the course of Tuesday and Wednesday lawyers representing the Attorney General of Canada (Tuesday) and the Attorney General of Alberta (Wednesday) will make their arguments in 60 minute presentations – other intervenors have 5 minutes to make their case.
What happens next?
The decision on a reference case does not invalidate laws. However, the opinion provides timely advice which governments generally do not ignore. A full constitutional challenge could be the next step if advice is not heeded. So this decision will not end concerns and subsequent uncertainty about what form impact assessments of major projects in Canada will take, but it will open a window to create a new process – informed by the guidance of the Supreme Court.
The British Columbia Attorney General intervenor factum introduces a potentially very useful solution – BC disagrees with both Alberta and the Govt of Canada. It recommends that Activities and Impacts be considered separately. The final decision determines approval of the activity BUT the consideration of impacts can set conditions subsequent to approval of the activity.
So if activity is a resource development within a province then there is a provincial assessment process and approval. Environment impacts related to federal powers, then federal conditions to mitigate adverse federal effects are imposed but they are not able to veto project. The process is symmetric (unlike the federal government argument) – provincial assessment of impacts cannot frustrate federal projects.
There are other problems with the Impact Assessment Act – beyond constitutional ones. Few would argue that the current impact assessment process is sluggish, unwieldy and expensive. This is not within the purview of the reference case. However, regardless of the court’s decision, important changes are needed to the Act to help the regulatory process become more nimble without reducing the robustness of impact assessments.
Until the impact assessment issue is resolved, proposals for investments in major projects in Canada will continue to be on hold because of the uncertainty around the current and possibly future process. Many of these major projects—such as transmission lines and mining projects—are critical to plans for a successful energy transition and require certainty before investments are made.
To read our analysis of the Alberta Court of Appeal’s 2022 ruling click here.