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Alberta Court of Appeal Finds Federal Impact Assessment Regime Unconstitutional

In its recent advisory opinion in Reference re Impact Assessment Act,[1] a 4-1 majority of the Alberta Court of Appeal concluded that the federal Impact Assessment Act (the “IAA”) and the Physical Activities Regulations (together, the “Assessment Regime”) are unconstitutional.

The majority concluded that the Assessment Regime intrudes impermissibly on provincial jurisdiction over intra-provincial activities and resource development. One dissenting judge concluded that the regime is constitutional because it regulates effects only within federal jurisdiction, such as effects on fish habitat, Indigenous peoples, and federal lands.

Although the majority’s advisory opinion does not have any direct legal impact on the Assessment Regime’s validity or applicability, it has significant practical consequences for the regulation of major projects in Canada. The federal government has announced its intention to appeal to Canada’s highest court, the Supreme Court of Canada.

The Assessment Regime

In 2019, the federal government enacted the IAA to replace the Canadian Environmental Assessment Act, 2012. Its stated purpose includes fostering sustainability, protecting aspects of the environment within federal jurisdiction, and assessing the positive and adverse effects of designated projects in Canada, which include certain mining projects, hydroelectric projects, highways, dams, waste treatment facilities, and oil and gas extraction, processing, and storage facilities above prescribed production-based thresholds.

The Assessment Regime provides a comprehensive federal process for assessing the effects of projects designated by the federal government, and determining whether the designated project would serve the public interest. Alberta and certain other provinces raised concerns about the scope of this regime and its impact on provincial jurisdiction. Consequently, Alberta requested a non-binding judicial opinion from the Alberta Court of Appeal on the regime’s constitutionality.

Majority Decision: Unconstitutional

The majority found that the Assessment Regime establishes “a federal impact assessment and regulatory regime that subjects all activities designated by the federal executive to an assessment of all their effects and federal oversight and approval”.[2]

The majority rejected the federal government’s argument that this regime falls within federal jurisdiction. The majority concluded that, when applied to intra-provincial designated projects, the regime’s subject matter falls “squarely” within several areas of exclusive provincial jurisdiction, including development and management of natural resources.[3]

The majority stated that the Assessment Regime gives the federal government “an effective veto over every intra-provincial designated project” based on its own view of the public interest.[4] The majority concluded that upholding this regime would result in “the centralization of the governance of Canada to the point this country would no longer be recognized as a real federation”.[5]

Accordingly, the majority concluded that the Assessment Regime is unconstitutional.  

Dissent: Constitutional

A single dissenting judge concluded that the Assessment Regime is a valid exercise of Parliament’s authority to regulate effects within federal jurisdiction caused by designated projects, and to authorize such projects when doing so would serve the public interest.

Conclusion

The majority’s advisory opinion — the first judicial consideration of the Assessment Regime’s constitutionality — does not have any direct legal impact on the Assessment Regime’s validity or applicability. It remains in full force and effect throughout Canada.

However, the majority’s opinion has significant practical consequences for the regulation of major projects in Canada. For example, it may influence future court cases or governmental decisions relating to the division of powers and the regulation of major projects in Canada.

The federal government has announced its intention to appeal to the Supreme Court of Canada. Based on past reference appeals of a similar nature, the appeal likely will not be heard for over a year. This appeal will offer Canada’s highest court an opportunity to have the final word on the Assessment Regime’s constitutionality.

We Can Help

Our National Appellate Litigation Group regularly represents appellants, respondents, and interveners in appellate courts across the country, including in major constitutional litigation. If you have questions about our litigation practice, please contact Brandon Kain or Byron Shaw.

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[1] 2022 ABCA 165 [Reference re IAA].

[2] Reference re IAA, at para. 372.

[3] Reference re IAA, at paras. 409-24.

[4] Reference re IAA, at paras. 245, 315.

[5] Reference re IAA, at paras. 423.

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