Ottawa Tables New Environmental Review Law Following Supreme Court Rebuke

A New Framework for Major Projects

The Canadian federal government has tabled new legislation aimed at fundamentally reshaping how major energy, mining, and infrastructure projects are reviewed and approved in the country. The proposed bill, introduced in the House of Commons by the Minister of Environment and Climate Change and the Minister of Natural Resources, is a direct response to a landmark Supreme Court of Canada ruling that struck down its predecessor, the Impact Assessment Act (IAA), as largely unconstitutional.

The new law seeks to establish a clear, predictable, and constitutionally valid process that respects provincial jurisdiction while upholding federal responsibilities for environmental protection. The government's stated goal is to provide certainty for investors and industry, ensure meaningful consultation with Indigenous peoples, and protect ecosystems for future generations. This legislative reset is a critical step for a government attempting to navigate the complex interplay between economic development and climate action.

Background: The Supreme Court's Constitutional Rebuke

The path to this new bill was paved by a significant legal challenge led by the province of Alberta and supported by several others. They argued that the 2019 Impact Assessment Act, often referred to by its original bill number, C-69, was a "no more pipelines law" that improperly inserted federal authority into areas of provincial resource management. The case ultimately landed at the nation's highest court.

In its October 2023 advisory opinion, the Supreme Court of Canada delivered a decisive verdict, finding that the IAA's framework was overly broad. The majority opinion, written by Chief Justice Richard Wagner, concluded that the law's focus on a project's overall "effects within federal jurisdiction" allowed Ottawa to regulate activities, such as in-province mining projects, that fell squarely under provincial authority. The court ruled that the federal government could not assess a project's total environmental impact but must confine its review to specific federal heads of power, such as fisheries, migratory birds, federal lands, and the rights of Indigenous peoples.

The ruling did not eliminate the concept of federal environmental assessment but demanded a more focused and constitutionally-tethered approach. It sent a clear signal to Ottawa that it needed to return to the drawing board and craft a law that respected the division of powers outlined in the Constitution Act, 1867.

What's in the New Bill?

While the full text is now subject to parliamentary debate, the government has outlined the core principles of the new legislation. The primary change is a narrower scope for federal involvement. The new process will be triggered only when a project has clear potential impacts on areas of explicit federal jurisdiction. This is a significant departure from the IAA, which considered a wider range of effects, including social, health, and economic impacts, as well as downstream greenhouse gas emissions.

Key features of the proposed law include:

• A Focused Project List: The types of projects automatically subject to federal review will be more narrowly defined to capture those with the highest likelihood of impacting federal interests.
• Clear Jurisdictional Triggers: The assessment will concentrate on specific, constitutionally-grounded areas like impacts on fish and fish habitat, aquatic species, migratory birds, and federal lands.
• Enhanced Cooperation: The bill emphasizes a "one project, one assessment" principle, seeking to harmonize reviews with provincial counterparts to avoid costly and time-consuming duplication. It allows for greater substitution, where a robust provincial review can be accepted as sufficient.
• Indigenous Consultation: The legislation aims to reaffirm the government's commitment to the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) and the Crown's duty to consult and accommodate, ensuring Indigenous groups are partners in the review process.

This legislative effort represents the government's attempt to thread a difficult needle: satisfying the court's constitutional requirements, reassuring provinces that their jurisdiction is respected, and providing the investment community with a predictable timeline, all while maintaining robust environmental standards. The introduction of this bill is the central development in the story of how Ottawa introduces new environmental law to replace Impact Assessment Act after Supreme Court rebuke, marking a pivotal moment for Canadian resource policy.

Reactions from Across the Country

The initial response to the new bill has been mixed, reflecting the diverse interests at stake.

Provincial Governments: Premiers from Alberta and Saskatchewan, who led the court challenge, have offered cautious responses. While welcoming the federal government's acknowledgement of the Supreme Court's decision, they have stated their legal teams will be scrutinizing the bill's text to ensure it truly respects provincial jurisdiction and does not contain any constitutional overreaches in its fine print.

Industry Associations: Business and industry groups, including the Canadian Association of Petroleum Producers (CAPP) and the Mining Association of Canada, have long advocated for a more efficient and predictable regulatory system. They have generally reacted positively to the bill's stated intent to reduce duplication and provide clarity. Their primary concern is whether the new process will be implemented in a way that allows good projects to proceed in a timely manner, thereby attracting international investment.

Environmental Organizations: Environmental groups have expressed significant concern. They worry that in its haste to comply with the court ruling and appease industry, the federal government is weakening environmental protections. Critics argue that narrowing the scope of assessments means that the cumulative effects of projects and their overall climate impact may not be adequately considered, potentially undermining Canada's climate targets.

Indigenous Leaders: First Nations, Métis, and Inuit groups are carefully reviewing the legislation to see how it impacts their rights. While the emphasis on consultation is welcome, many leaders will be looking for concrete mechanisms that ensure their consent is sought and their traditional knowledge is integrated into decision-making, rather than being treated as a procedural checkbox.

The Path Ahead

The tabling of the bill is just the first step in a long legislative journey. It will now face multiple readings, rigorous debate in the House of Commons, and detailed study by parliamentary committees where stakeholders will provide testimony. Following that, it must pass through the Senate before receiving Royal Assent and becoming law. This process will likely be contentious, with opposition parties and various interest groups pushing for amendments. The ultimate success of this new environmental assessment regime will depend not only on its final text but on its implementation and its ability to finally bring stability to the regulation of Canada's most significant economic sectors.