Ottawa Tables Revamped Environmental Law in Response to Supreme Court Ruling

The Government of Canada has tabled new legislation aimed at replacing the contentious Impact Assessment Act, following a landmark advisory opinion from the nation's top court. The proposed bill, titled the 'Federal Projects Review Act', seeks to create a more constitutionally sound framework for reviewing major energy and infrastructure projects, addressing the jurisdictional concerns that led the Supreme Court to find the federal Impact Assessment Act largely unconstitutional last year.

The move marks a critical juncture in the ongoing debate over resource development, environmental protection, and the division of powers in Canada. The previous act, formerly known as Bill C-69, was a cornerstone of the government's environmental policy but faced fierce opposition from several provinces, most notably Alberta and Saskatchewan, which argued it encroached on their authority to manage natural resources.

In its 5-2 majority opinion, the Supreme Court concluded that the act's designation of which 'designated projects' fall under federal review was overly broad. The court found that the law improperly regulated projects entirely within provincial boundaries based on effects that were not clearly tied to federal areas of jurisdiction, such as fisheries, Indigenous peoples, or migratory birds. The ruling affirmed that while the federal government has a crucial role in environmental protection, it cannot use that power to usurp provincial authority.

The newly tabled legislation attempts to thread this constitutional needle. According to government officials, the Federal Projects Review Act will more clearly define the triggers for a federal assessment. The focus will shift from the project type to the potential for specific adverse effects on areas of explicit federal jurisdiction. For example, a project would automatically trigger a federal review if it has clear cross-boundary impacts on waterways, affects federal lands, or has significant impacts on species at risk. The government maintains that greenhouse gas emissions will remain a key consideration for projects with a significant federal interest, a point that is likely to remain a source of friction.

Initial reactions to the bill have been mixed, reflecting the deep divisions on the issue. Alberta's Premier stated that while the province is pleased to see the previous act dismantled, her government will be 'reviewing every line' of the new bill to ensure it fully respects provincial jurisdiction. This dispute is emblematic of wider tensions between Ottawa and certain provinces, echoing the heated debates surrounding the federal carbon tax amid affordability concerns. Provincial governments argue that a pattern of federal intrusion creates uncertainty and drives away investment in critical sectors.

Business and industry groups have offered a cautiously optimistic response. The Canadian Association of Petroleum Producers (CAPP) and the Mining Association of Canada (MAC) both issued statements welcoming the government's effort to provide regulatory clarity. For years, they have argued that an inefficient and unpredictable review process has hampered Canada's competitiveness, leading to the cancellation of major projects and the flight of capital to other jurisdictions. Their primary hope is that the new act will lead to more timely and predictable decisions, allowing companies to better assess the viability of long-term investments in Canadian resources.

However, environmental organizations have expressed significant concern. Groups like Environmental Defence and the David Suzuki Foundation have warned that narrowing the scope of federal review could create regulatory gaps and weaken environmental oversight. They argue that a strong federal backstop is necessary to ensure that the cumulative effects of projects are considered and that Canada can meet its international climate commitments. They fear the new legislation could be a step backward, prioritizing resource extraction over long-term environmental sustainability.

Indigenous leaders and organizations are also closely monitoring the legislation's development. The Supreme Court has repeatedly affirmed the Crown's duty to consult and accommodate Indigenous peoples on projects that may impact their rights. National Indigenous organizations have stressed that any new assessment process must have free, prior, and informed consent at its core and must provide clear avenues for Indigenous participation and decision-making authority, regardless of whether a review is primarily provincial or federal.

The path forward for the Federal Projects Review Act is complex. It will face rigorous debate in the House of Commons and the Senate, where amendments are likely to be proposed from all sides. The ultimate success of the legislation will depend on its ability to create a durable framework that can withstand future legal challenges while providing the certainty needed to attract investment and ensuring robust environmental and Indigenous rights protections. For the federal government, it is a high-stakes attempt to find a workable balance in one of the country's most defining and divisive policy areas.