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Ottawa Amends Environmental Review Law After Supreme Court Deems It Unconstitutional Overreach
The federal government has introduced legislation to amend the Impact Assessment Act following a landmark Supreme Court of Canada ruling that found the law to be largely unconstitutional. The court determined the 2019 law, known as Bill C-69, improperly intruded on provincial jurisdiction over resource projects. The proposed changes aim to narrow the scope of federal reviews, focusing specifically on areas of federal authority like fisheries and Indigenous rights, rather than a project's overall public interest. This move seeks to provide clarity for industry while addressing the constitutional concerns raised by the court and several provinces.
Source: Supreme Court of Canada
Introduction
The Government of Canada has tabled new legislation aimed at bringing its framework for reviewing major resource projects into constitutional alignment after a significant rebuke from the nation's top court. The amendments to the Impact Assessment Act (IAA) are a direct response to the Supreme Court of Canada's October 2023 advisory opinion, which concluded that the existing federal environmental assessment regime was an unconstitutional overreach into areas of provincial jurisdiction.
Background: The Controversial Bill C-69
The Impact Assessment Act, originally passed as Bill C-69 in 2019, was one of the cornerstone environmental policies of the Trudeau government. It replaced the previous review process under the Harper government and was designed to broaden the scope of federal assessments. The law required regulators to consider a wide range of effects, including climate change impacts, social and health outcomes, and gender-based analysis, when deciding if a major project—such as a pipeline, mine, or port—was in the "public interest."
From its inception, the Act was highly contentious. Critics, including the Alberta government and numerous industry associations, dubbed it the "No More Pipelines Act." They argued its vague criteria, broad scope, and potential for lengthy delays would deter investment in Canada's resource sector and create significant uncertainty for project proponents. The federal government, however, defended the law as a necessary tool to restore public trust in the review process and ensure sustainable development.
The Supreme Court's Verdict
The constitutional battle culminated in a reference case brought by Alberta. In a 5-2 decision, the Supreme Court found the IAA's core framework to be unconstitutional. Chief Justice Richard Wagner, writing for the majority, stated that the law's focus on assessing a project's overall effects and determining its "public interest" was not grounded in specific heads of federal power. Instead, it treated all major projects as inherently federal matters, effectively erasing the constitutional division of powers that grants provinces authority over resource development within their borders.
The court clarified that the federal government can and should conduct environmental assessments, but only when they are tied directly to explicit areas of federal jurisdiction. These include fisheries, navigable waters, migratory birds, federal lands, and the rights of Indigenous peoples. The ruling did not strike down the law but provided a clear directive: Ottawa had to narrow its focus from a broad assessment of a project's wisdom to a targeted review of its impacts on federal responsibilities.
The Legislative Response
In response to the court's guidance, the government has now moved to overhaul the environmental review law through targeted amendments. The new bill proposes to redefine the purpose and scope of federal impact assessments. The central change involves shifting the decision-making trigger from a project's inclusion on a designated project list to whether it is likely to cause adverse effects within federal jurisdiction.
Under the amended Act, the term "effects within federal jurisdiction" will be more tightly defined to align with the court's opinion. The final decision for the minister will no longer be whether a project is in the broad "public interest," but whether the adverse federal effects it may cause are "significant" and, if so, whether they are justified. This surgical approach is intended to respect provincial authority while maintaining a federal backstop for key national environmental and social concerns.
Reactions from Stakeholders
The proposed changes have elicited varied responses. The governments of Alberta and Saskatchewan, which led the charge against the original Act, have expressed cautious optimism. They view the amendments as a victory for provincial rights and a necessary step toward a more efficient and predictable regulatory environment for resource projects. Industry groups, such as the Canadian Association of Petroleum Producers and the Mining Association of Canada, have echoed this sentiment, welcoming the increased clarity and focus on jurisdictional boundaries.
However, environmental organizations and some opposition parties have raised concerns that the amendments weaken federal oversight. They argue that narrowing the scope of reviews could prevent the government from considering a project's full environmental footprint, particularly its contribution to climate change. The debate continues over whether greenhouse gas emissions, which cross provincial and national borders, fall sufficiently under federal jurisdiction to be a primary factor in these newly defined assessments.
Indigenous groups, meanwhile, are closely watching how the changes will affect the Crown's duty to consult and accommodate. The federal government has maintained that upholding the rights of Indigenous peoples remains a core component of the review process, as this is a clear area of federal responsibility. First Nations, Métis, and Inuit leaders will be scrutinizing the legislation to ensure their rights and environmental concerns are adequately addressed within the new constitutional framework.
Conclusion: The Path Forward
The amendments to the Impact Assessment Act represent a critical juncture in Canadian environmental and constitutional law. The federal government is attempting a delicate balancing act: respecting the Supreme Court's directive on provincial jurisdiction while preserving a meaningful role in overseeing the environmental impacts of major projects. The legislative journey of this new bill through Parliament will be closely monitored by provinces, industry, and environmental and Indigenous groups. Its ultimate success will be measured by its ability to create a stable, predictable, and constitutionally sound process for developing Canada's resources sustainably for generations to come.
Insights
- Why it matters: This case fundamentally recalibrates the constitutional balance of power between Ottawa and the provinces over natural resources and the environment. It sets new precedents for how federal oversight can be applied to major projects, impacting decades of environmental policy.
- Impact on Canada: The amended law is expected to streamline the approval process for major energy and mining projects, potentially boosting investment and economic growth. However, it may also lead to less comprehensive federal reviews, raising concerns among environmental groups about cumulative effects and climate change impacts.
- What to watch: Key developments to watch include the parliamentary debate and potential amendments to the new bill, the first few project assessments conducted under the revised rules, and any further legal challenges that may arise from provinces or other stakeholders testing the boundaries of the new framework.