Alberta Court of Appeal finds the federal Impact Assessment Act unconstitutional

Today, the Alberta Court of Appeal released its decision in the Reference re. Impact Assessment Act, 2022 ABCA 165, finding that the Impact Assessment Act and Physical Activities Regulations (the Act and Regulations) were unconstitutional in their entirety. The Act and Regulations represented the federal government's most recent attempt at creating an environmental impact assessment regime, replacing the Canadian Environmental Assessment Act of 2012.

The Court ultimately found that the Act and Regulations were a significant federal overreach into provincial affairs that went well beyond previous environmental legislation that the Supreme Court had upheld in cases like Friends of the Oldman River Society v. Canada (Minister of Transport).

In particular, the Court found that the Act and Regulations effectively granted the federal government a veto over projects that were wholly within provincial jurisdiction, by allowing the federal executive to unilaterally designate projects as designated projects and then to put them on hold until the federal government had determined whether the project was in the public interest. This was something not found in previous environmental legislation and effectively provided the federal government with a mechanism to intervene in virtually any project anywhere in Canada.

Unlike previous environmental legislation, there was no requirement that there be a nexus with federal constitutional authority for the federal government to exercise its powers under the Act and Regulations. This meant that the federal government was free to intervene in any project, including those that had no connection with the federal powers and were wholly located within one province. In the Court's findings, this could create endless loops of delay that would effectively scuttle major projects.

Finally, the Court of Appeal recognized the importance of section 92(A) of the Constitution, which was introduced in 1982, and grants Alberta and Saskatchewan the right to manage their own natural resources. The Court found that allowing the type of federal veto contemplated in the Act and Regulations would effectively gut that constitutional provision.

The Court of Appeal has authored a strong defence of provincial powers in the face of federal overreach. While this decision will ultimately end up at the Supreme Court of Canada, the Alberta Court of Appeal has provided an important and well-reasoned decision with respect to the limits of federal power in regard to environmental legislation.

If you have any questions about the decision, reach out to Rob Martz.