On October 13, 2023, when the Supreme Court of Canada ruled that parts of the federal environmental Impact Assessment Act were unconstitutional, it also laid out a pathway for the government to rectify the legislation in a way that will protect provincial jurisdiction as well as nature and people.

The Supreme Court of Canada released its judgment finding Canada’s Impact Assessment Act and the Physical Activities Regulations made under the Act (the PA Regulations) (together, the IAA) unconstitutional in part. “Designated projects” under the IAA are subject to a statutory prohibition on any activities that may cause adverse “effects within federal jurisdiction”, absent approval from the federal government.

In September 2019, the Alberta government asked the Alberta Court of Appeal to provide an advisory opinion on whether the IAA steps outside federal legislative authority. The Alberta Court of Appeal issued its advisory opinion in May 2022, with a majority of judges opining that the IAA is unconstitutional in its entirety.

The Court unanimously agreed that the portion of the IAA addressing projects carried out or financed by federal authorities on federal lands or outside Canada is constitutionally valid and within federal legislative authority. However, the was split in its opinion on the IAA’s scheme for “designated projects.”

As outlined in a recent report from the firm Osler, Hoskin & Harcourt LLP, IAA provides two mechanisms by which an activity becomes a “designated project”, which are relevant to the Supreme Court’s judgment:

  • First, the PA Regulations prescribe a list of physical activities automatically subject to the Act (the Project List). The Project List includes certain mine projects (e.g., thermal coal), hydroelectric projects, oil sands facilities, and oil and gas extraction, processing and storage facilities, if they exceed prescribed production-based thresholds. Such projects may be wholly located within the borders of a province and, on that basis, primarily regulated by provincial authorities.
  • Second, the Act permits the Minister of Environment and Climate Change Canada (Minister) to designate a physical activity that is not on the Project List if, in his or her opinion, either the activity may cause adverse affects within federal jurisdiction or there are public concerns related to those effects that warrant the designation.

According to the legal report, the final judicial opinion on this matter will fundamentally alter the scope of federal assessment and decision-making over the vast majority of major projects, such as critical minerals mines, upstream oil production (including oil sands) and pipelines located wholly within a province. Parliament must now consider significant amendments to the IAA to address the Court’s reasoning.

In light of this decision, organizations such as WWF-Canada are pointing out the importance of federal involvement and accountability in matters related to the global issue of biodiversity and nature loss. Industrial development and resource extraction can pose major threats to ecosystems, and a robust and nationally consistent impact assessment regime is a necessary tool for identifying and mitigating these threats.

“While initially disappointed that this decision could increase risks of development to nature, wildlife and people, WWF-Canada is pleased that the court reaffirmed the role of the federal government in environmental assessment regimes. 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’s president and CEO Megan Leslie.

“The Supreme Court gave clear direction on what is necessary to save this legislation. We urge the federal government to act quickly to amend the Impact Assessment Act to reflect this ruling. In the meantime, we urge all provincial and territorial governments to ensure that their environmental assessment legislation holds new projects to the highest standards.”

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Featured image credit: CNW Group/World Wildlife Fund Canada

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