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Supreme Court rules federal Impact Assessment Act mostly unconstitutional

Environment minister will go back to the drawing board to 'clarify' assessment regulations
(Canadian Association of Petroleum Producers photo)

Canada’s natural resources industries won a victory in the Supreme Court of Canada.

Ottawa’s controversial Bill C-69, known as the federal Impact Assessment Act (IAA), was declared mostly unconstitutional, by five of seven judges, including Chief Justice Richard Wagner, in a decision released Oct. 13.

IAA, passed into a law by Parliament in 2019, put forth a new regulatory scheme for assessing the environmental impacts of designated natural resource projects, allowing for wider public consultation and participation in assessing such projects.

Concerned about the future of pipeline projects in Alberta, that province felt the federal government was overreaching on its jurisdictional scope over provincial natural resources and took the issue to the Alberta Court of Appeal. That court declared the act unconstitutional in 2022.

Ottawa subsequently appealed to Canada’s high court where arguments were heard last spring.

In the majority ruling, Chief Justice Wagner said the federal impact assessment scheme, in itself, is constitutional, however the balance of the process – specifically regulations outlining what projects are considered “designated projects” and, thus, are automatically subject to federal review – to be unconstitutional and beyond the scope of federal decision-making power. 

"Environmental protection remains one of today's most pressing challenges," said Wagner. "To meet this challenge, Parliament has the power to enact a scheme of environmental assessment. Parliament also has the duty however, to act within the enduring division of powers framework laid out in the Constitution."

Wagner said the both levels are government are free to show leadership and exercise their respective powers over the environment in a harmonious way in the “spirit of cooperative federalism.”

In a news release, the Mining Association of Canada (MAC) called on the government and Parliament to shorten project permitting times and end investment uncertainty in this country.

The industry lobby group often works with government on issues related to federal permitting legislation on major mining projects. 

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“Prolonged uncertainty is a roadblock to building the mines and infrastructure we urgently need to achieve our climate change, supply chain uncertainty and critical minerals goals,” the association in a statement.

MAC said there about 20 mining projects in the federal assessment queue with more projects in the pipeline about to enter the Impact Assessment Agency process. 

The association emphasized mining projects are already subject to comprehensive provincial regulatory oversight covering environmental assessment processes, environmental protection regulations, and permitting specific to the industry.

“The federal government does not have jurisdiction over mining on provincial Crown land and  does not have a dedicated regulator for mines,” MAC said in the release.

However, MAC added, most new mining projects and mine expansions have been subject to this new federal Impact Assessment Act, despite there already being existing federal legislative oversight under fisheries, navigable waters, explosives, species at risk, migratory birds and environment protection.

In a statement, federal Environment and Climate Change Minister Steven Guilbeault and Justice Minister and Attorney General of Canada Arif Virani said they accept the court‘s opinion, which, they say, reinforces the need to improve the legislation.

The ministers said the government needs to “ensure clarity and certainty” to attract the necessary investment in resource projects “that this country needs.”  

The intent of the Impact Assessment Act, they said, was to establish a better set of rules that safeguarded the environment, protected Indigenous rights, while ensuring resource projects are assessed in a timely fashion. 

“Our immediate priority will be to provide guidance to our many stakeholders and Indigenous partners to ensure as much predictability as possible for projects affected by this opinion. We understand the importance of timeliness in determining a path forward.”

World Wildlife Fund Canada said the court’s decision provides an opportunity to reset the legislation in such a way that protects provincial jurisdiction along with nature and people.

In a release, the national conservation group said the court “gave clear direction on what is necessary to save this legislation.” They urged the government to amend the act while urging all provincial and territorial governments to ensure their respective environmental assessment processes are held “to the highest standards.”

“Wildlife, ecosystems and climate-fuelled natural disasters like wildfires and floods do not respect provincial borders, and it is essential that the federal government have oversight — we need policies that look at the big picture and inform decisions for the good of the whole country,” said WWF-Canada President-CEO Megan Leslie.