The Trudeau government is assigning a new cabinet working group on regulatory efficiency, chaired by Labour and Seniors Minister Seamus O’Regan, to look at possible changes to the country’s environmental assessment process in the wake of last Friday’s Supreme Court decision on the federal Impact Assessment Act.
The court ruling “has prompted a rethink by the government on how to best manage the regulatory process for major projects, namely energy and mining developments,” iPolitics reports. Prime Minister Justin Trudeau has “made it clear that the working group is focused on getting ‘big projects built,’ with a focus on slashing red tape and making the regulatory process more efficient,” the news story adds, citing an unnamed government source.
Working group members include Environment and Climate Minister Steven Guilbeault, Natural Resources Minister Jonathan Wilkinson, Finance Minister and Deputy Prime Minister Chrystia Freeland, and Industry Minister François-Philippe Champagne, among others, iPolitics says.
Meanwhile, the government will press ahead with its forthcoming cap on oil and gas emissions and Clean Electricity Regulations, the Globe and Mail says. “The opinion of the court does not call into question other regulatory initiatives under development, and we are confident that they are within the purview of the federal government,” Guilbeault told the paper in a statement.
In their ruling Friday, five out of seven Supreme Court justices found most of the IAA unconstitutional because it seeks to regulate activities within provincial jurisdiction, The Canadian Press reported at the time. The Act took effect in August, 2019.
“The federal government responded to the ruling by committing to quickly rewriting the law and putting the changes before Parliament for approval,” the Globe and Mail wrote. “Steven Guilbeault, the Minister of Environment and Climate Change, said the court had affirmed that Ottawa has a role to play in environmental protection.”
“What the court is saying is you need to change some things but you can do this, clearly,” Guilbeault said.
Because the ruling was an advisory opinion that did not strike down the Act, the current law will still apply to projects that are already under assessment, the minister added, within the new parameters laid out by the court.
In the majority ruling, Chief Justice Richard Wagner said the law as written could regulate activities that are provincial business, instead of restricting itself to environmental effects that are within Ottawa’s power to oversee, CP stated.
“Even if this court were to accept Canada’s submission that the defined ‘effects within federal jurisdiction’ are within federal jurisdiction, these effects do not drive the scheme’s decision-making powers,” he wrote in the 204-page opinion released Friday.
Wagner went on to say the effects considered in the legislation previously known as Bill C-69, which included a range of environmental and social factors as well as climate change, were “overbroad.”
“It is difficult to envision a proposed major project in Canada that would not involve any of the activities that ‘may’ cause at least one of the enumerated effects,” he wrote.
“The scheme invites the federal government to make decisions in respect of projects that it has no jurisdiction to regulate.”
Two judges dissented, saying the law was constitutional.
Fossil Supporters Take a Victory Lap
In the immediate aftermath, “the ruling was met with words like ‘ecstatic’ and ‘thrilled’ from business groups,” the Globe reported. “Alberta Premier Danielle Smith called it ‘a great day’ and a substantial win for her province. Ontario Premier Doug Ford said the ruling would allow the province to ‘get shovels in the ground’.”
“This is a great decision—both for economic development in Canada and for our federal system. Our clients are ecstatic with the outcome,” said Peter Gall, a lawyer who represented the Independent Contractors and Businesses Association and the Alberta Enterprise Group as intervenors in the case.
The Canadian Association of Petroleum Producers applauded the ruling, and Heather Exner-Pirot, director of energy, natural resources and environment at the Macdonald-Laurier Institute, declared it a “strong rebuke to the federal government” and a step toward a brighter industrial future.
“The decision will have lasting impact,” Exner-Pirot wrote. “It is a piece of cautiously optimistic news for the industry, paving the way for realizing its greatest desire: to move away from concurrent and competing federal and provincial processes for project approval, toward a more efficient principle of one project, one assessment.”
The ruling landed at a time when “now we need to build,” Exner-Pirot added: “to meet net-zero goals, to supply our allies with energy and critical minerals, to compete with the U.S. Inflation Reduction Act, to bolster our anemic economy—take your pick. Where we once applied sticks to major energy and resource projects, we now need to offer carrots. This needs to be reflected in the amendments to the IAA.”
‘Not the Win Alberta Was Hoping For’
But Stewart Elgie, law professor and head of the University of Ottawa’s Environment Institute, told CP the court’s opinion didn’t strike down the law, nor will it change much about how environmental assessment is actually done.
“(The court) said this act is too broad in a couple places and has the potential to allow intrusion into provincial jurisdiction—not that it actually has done that,” he said. So the government “needs to tighten the act up to reflect how the federal government actually does environmental assessment.”
Elgie said wording in the act about “public interest” is too broad.
“That would allow the federal government to decide on effects outside its jurisdiction.”
But he added the decision didn’t strip Ottawa of its ability to regulate greenhouse gases or a wide variety of other environmental effects from health to habitat—they just have to be linked more closely to federal powers.
“The federal government still has really broad authority to regulate projects through environmental assessment,” he said. “It just doesn’t have unlimited authority.”
The ruling was “not the win that Alberta was hoping for,” West Coast Environmental Law staff lawyer Anna Johnston said in a release. “The entire Court—majority and minority opinions—agreed with our arguments about when the federal government can require an assessment and the information that can be considered. Overall, we think this opinion can be a win for Canadians and the environment, but Parliament needs to step up and enact amended assessment legislation that applies to all projects with the potential to harm areas of federal jurisdiction.”
“The constitutional issues identified by the Court can be addressed by a handful of amendments to the Impact Assessment Act,” added Nature Canada Emeritus Counsel (and Energy Mix Productions Board member) Stephen Hazell. “The challenge for the federal government is to work with the provinces, Indigenous nations, and consult with the public to ensure that the revised law aligns with the Court’s decision. In sum, the Court has confirmed the federal government’s critical role in ensuring a safe and healthy environment for Canadians. This is a far cry from the position of the government of Alberta.”
In an interview Friday, Johnston said the ruling was a reminder to Ottawa “to be careful when asserting jurisdiction over climate and to be really thoughtful about how you’re doing it.” In contrast to the Supreme Court case on the federal carbon price, where the government made a strong case and pushed those arguments to a win, “Canada’s lawyers didn’t come well prepared to answer questions” on IAA provisions that allowed federal assessments for any impacts in another province than where the emissions occurred. “The court found that was way too broad,” she said, “which is kind of reasonable, because it could really eviscerate provincial power.”
But the court’s process still produced a ruling that set out to protect provincial powers under the constitution while recognizing a strong federal role in environmental protection, Johnston added, suggesting the justices sought a “political balance” that would maintain national unity.
Ecojustice lawyer Josh Ginsburg said an “environmental assessment law that works for everyone” is still essential to address a list of urgent priorities, including an oil and gas emissions cap, a thermal coal export ban, biodiversity legislation, and a ban on single-use plastics. He said all governments, federal and provincial, have a responsibility to fight climate change, biodiversity loss, and the community impacts of dangerous pollution.
“Even though the Court found the IAA was not sufficiently focused on federal jurisdiction, it confirmed that no project is immune from environmental scrutiny,” Ginsburg said in a statement that cited this passage in the judgement: “The fact that a project involves activities primarily regulated by the provincial legislatures does not create an enclave of exclusivity.”
That part of the ruling could suggest that “all types of projects can and should be subject to a comprehensive federal environmental assessment to protect against harm in Canada’s areas of responsibility,” Ginsburg said.
Enacted in 2019, the law lists activities that would trigger a federal impact review, CP writes. Alberta opposed it, arguing the law gives Ottawa power to stick its nose into provincial matters such as resource development. In 2022, it asked the Alberta Court of Appeal for a legal opinion.
The appeal court, in its strongly worded opinion, called the law an “existential threat” to the division of powers in the Constitution and a “wrecking ball” on the rights of Alberta and Saskatchewan.
The Impact Assessment Act is now the second such piece of legislation to be thrown out by the courts, CP says.
In 2016, the Federal Court of Appeal struck down assessment legislation passed by the Conservative government of Stephen Harper.
Major segments of this report were first published by The Canadian Press on October 13, 2023.