Supreme Court Of Canada Declares Federal Impact Assessment Act Largely Unconstitutional

Canada's Supreme Court ruled on Friday that a federal law which oversees the assessment of major infrastructure projects is largely unconstitutional, a decision that will spur an overhaul of the federal environmental approval process.

The Impact Assessment Act (IAA) 2019, formerly known as Bill C-69, was deemed unconstitutional on the grounds that it gave the federal government too much oversight of projects that fall under provincial constitutional jurisdiction. Prime Minister Trudeau’s cabinet designed the IAA to streamline and restore trust in the environmental approval process for major projects after changes made by the Harper Government. It appears, however, that in doing so they overstepped the parameters of federal authority for certain types of projects.  

In short, the Supreme Court ruled 5-2 that a part of the act "intrudes more than incidentally into the provinces' constitutional sphere."

Chief Justice Richard Wagner commented that "environmental protection remains one of today's most pressing challenges, and Parliament has the power to enact a scheme of environmental assessment to meet this challenge, but Parliament also has the duty to act within the enduring division of powers framework laid out in the Constitution.”

The Act and its regulations establish a two-part information gathering and regulatory scheme. The first part, which is described in sections 81 to 91 of the Act, outlines an impact assessment process for projects carried out or financed by federal authorities on federal lands or outside Canada. It requires the federal authority to determine whether the project is likely to cause significant adverse environmental effects. If so, it must then be determined whether these effects are justified in the circumstances.

The second part, which includes the remaining provisions in the Act and the regulations, outlines the projects considered "designated projects" under the Act and automatically makes them subject to federal review.

While sections 81 to 91 of the Act were found to be constitutional, the "designated projects" portion of the Act was deemed unconstitutional for two main reasons. Firstly, it does not regulate "effects within federal jurisdiction" defined in the Act, as these effects do not influence the decision-making process. Secondly, the term "effects within federal jurisdiction" does not align with federal legislative jurisdiction. In short, the scope of the types of projects captured under the legislation and enabling regulations was too broad and exceeded Canada’s constitutional authority.

Next Steps:

The Government of Canada has accepted the ruling of the Supreme Court, and Minister Guilbeault and Minister Virani will be working with stakeholders and Indigenous Communities to determine the next steps. As noted at a press conference last week in response to the ruling, the government will seek to ensure clarity and that Canada is a stable place for investment. However, much work remains ahead.  

Sussex stands ready to work with clients and stakeholders in communicating directly to Canada as it looks to advance the next steps on an updated Assessment Act.