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Reference re Impact Assessment Act, 2023 SCC 23

Link to Decision Summarized

Jurisdiction – Environmental Impact Assessment

Appeal

This was an appeal from an Alberta Court of Appeal (“ABCA”) judgment regarding a reference by the Alberta’s Lieutenant Governor in Council to the ABCA concerning the constitutionality of the federal Impact Assessment Act (the “Act”) and the corresponding Physical Activities Regulations (the “Regulations”). The ABCA concluded that the Act and the Regulations were ultra vires the federal government and, therefore, unconstitutional in their entirety. The Attorney General of Canada (“Canada”) appealed the ABCA decision to the Supreme Court of Canada (“SCC”).

Decision

The SCC allowed the appeal in part finding the federal impact assessment scheme is largely unconstitutional.

Pertinent Issues

The SCC held that the sole issue in this appeal was whether the Act and the Regulations were ultra vires Parliament. In considering the issue, the SCC found the complex legislative scheme established by the Act and the Regulations to be two schemes in one. The first scheme, contained in ss 81 to 91 of the Act, dealt with projects carried out or financed by federal authorities on federal lands or outside Canada. According to the court, this portion of the scheme was clearly intra vires.

The second part of the scheme, consisting of the remaining portions of the Act and the Regulation, dealt with designated projects, as defined in the Act. The SCC found that Parliament plainly overstepped its constitutional competence in enacting this designated projects scheme, making it ultra vires.

Designated Projects

In relation to the second portion of the scheme, namely designated projects, the SCC conducted a division of powers analysis consisting of two steps: characterization and classification. The governing principles when assessing the characterization of the impugned legislation are the pith and substance analysis, characterization being distinct from classification, and there is a presumption of constitutionality.

The court found that the pith and substance of the “designated projects” component of the scheme was to assess and regulate designated projects with a view to mitigating or preventing their potential adverse environmental, health, social and economic impacts. Conversely, the pith and substance of the secondary component in ss. 81 to 91 of the Act was to direct the manner in which federal authorities that carry out or finance a project on federal lands or outside Canada assess the significant adverse environmental effects that the project may have.

The governing principle regarding classification of the impugned legislation is that the law is classified based on the on its main thrust or dominant characteristic, meaning its secondary effects are not the focus of the validity analysis. The fact that a valid law incidentally touches on a head of power belonging to the other level of government does not affect its validity.

The SCC held that classifying environmental legislation presents a challenge because the “environment” is not a head of power under ss 91 or 92 of the Constitution Act, 1867 and that neither level of government has exclusive jurisdiction over the whole of the environment or over all environmental assessment. The SCC acknowledged that both levels of government can legislate in respect of certain aspects of environmental protection, including certain aspects of the environmental assessment of physical activities.

The court concluded that an impact assessment of a designated project could be required for reasons other than, or not sufficiently tied to, the project’s possible impacts on areas of federal jurisdiction. Consequently, the court was not satisfied that it performed the funneling function necessary to maintain the scheme’s focus on federal impacts. According to the court, the defined “effects within federal jurisdiction” went far beyond the limits of federal legislative jurisdiction, which overbreadth reinforces the conclusion that the pith and substance of the scheme cannot be classified under federal heads of power.

Ss 81 to 91 of the Act

The SCC noted that these provisions were not challenged as unconstitutional. The court found that ss 81 to 91 of the Act provided direction to federal authorities exercising their decision-making power in relation to projects that they undertook or funded themselves on federal lands or outside Canada. The SCC concluded that these provisions can be separated from the balance of the scheme and upheld as constitutional and, as a result, should not fall with the rest of the scheme.

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