Canada: Alberta Court Of Appeal Declares Federal Impact Assessment Act Unconstitutional: What Does It Mean For Saskatchewan?

Introduction

On October 11, 2022, the Saskatchewan Government released a paper entitled Drawing the Line: Defending Saskatchewan's Economic Autonomy. Throughout the paper, the Saskatchewan Government considers policy options in light of what the provincial government believes are intrusions by the federal government into Saskatchewan's exclusive areas of jurisdiction under the Constitution Act, 1867.

The political differences among current leaders of the provincial and federal governments are apparent. But less apparent are the practical implications of such political differences on projects under development in Saskatchewan.

The practical implications were recently judicially considered in Alberta in Reference re Impact Assessment Act¹, 2022 ABCA 165 (the "Alberta Reference"). The purpose of the Alberta Reference was for the Alberta Court of Appeal (the "Court") to analyze the constitutionality of the Impact Assessment Act (the "Act") and the Physical Activities Regulations (the "Regulations" and together with the Act the "Federal Assessment Laws"), which repealed and replaced the Canadian Environmental Assessment Act, 2012. The Federal Assessment Laws establish a federal impact assessment regime for projects undertaken in Canada.

After overviewing the important parts of the Alberta Reference, we summarize how it impacts Saskatchewan projects. In our discussion, it is important to recall that in Canada, the power to make law is divided between federal Parliament and provincial legislatures through mutually-exclusive heads of legislative power established through sections 91 and 92 of the Constitution Act, 1867. "Environment" is not an established head of legislative power, so either government may enact legislation relating to the environment so long as it can be categorized under a specific head of power within its respective jurisdiction. This constitutional duality is the reason for much of the political differences on matters of environment and climate.

The Majority's Decision

The majority of the Court consisting of four of the five sitting judges began by stating that the Federal Assessment Laws are unconstitutional.

The majority stressed that climate change is not the only threat facing Canada and emphasized that the Federal Assessment Laws themselves are a threat to Canada because they are a clear and present danger to the division of powers guaranteed by Canada's constitution. In the words of the majority, the Act covers the entire biosphere known to mankind and all aspects of human life within the biosphere.²

The majority took particular issue with the requirement for an intra-provincial designated project to receive a positive public interest determination. As the majority said, a "positive public interest determination" means the federal executive has decided that the intra-provincial designated project is in the public interest.³

The majority stressed that without a positive public interest determination, a proponent of an intra-provincial designated project is prohibited from proceeding, the federal executive is under no obligation to identify conditions for the project to proceed, and federal authorities are forbidden from issuing any federal permit required for the intra-provincial designated project to proceed. The Court described this as a fatal instance of federal overreach.⁴

According to the majority, for Canadians living in parts of the country with lesser populations and less political influence on the federal government, the economic and social consequences of the Federal Assessment Laws are especially devastating.⁵

The majority stressed that the Federal Assessment Laws raise an issue of fundamental fairness because the federal Parliament has "taken a wrecking ball" to the constitutional rights of citizens of provinces such as Alberta and Saskatchewan to benefit from their natural resources. According to the majority, this "wrecking ball" extends to securing capital investment because capital investment will not happen under Federal Assessment Laws when the investment rules are uncertain, unpredictable, unquantifiable, and unreliable.⁶

The majority further argued the Federal Assessment Laws are unconstitutional because it deprives Alberta and Saskatchewan, the two provinces that have the majority of oil and gas reserves in Canada, of their constitutional right to exploit their natural resources.⁷

The majority also commented on the "worlds transition" from fossil fuels to a greener economy. First off, the majority stressed that the transition may take up to three or four decades. The majority then stated that while many people may be delighted at the idea of transitioning away from fossil fuels, the provinces who own such natural resources and the citizens of those provinces may not be as enthusiastic.⁸

The majority offered its interpretation of the legislative scheme, stating that the subject matter of the Federal Assessment Laws is "the establishment of 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".⁹ According to the Court, when applied to intra-provincial designated projects, this subject matter intrudes into the heads of power assigned to the provincial legislatures by the Constitution Act, 1867.¹⁰

The majority also analyzed the impact of the Federal Assessment Laws on Indigenous peoples and stated that several First Nations oppose the prohibitions in ss. 7(1)(c) and (d) of the Act. After summarizing and agreeing with the complaints of several First Nations, the majority stressed that the Federal Assessment Laws are an overreach because it permits the federal government to stop intra-provincial designated projects authorized by Provincial authority even where agreements have been made with an Indigenous entity and the project has received provincial approval. The majority stated that ss. 7(1)(c) and (d) of the Act is an act of paternalism because it restricts what Indigenous people are permitted and not permitted to do.

In summary, the majority held that the federal government's concerns about the environment and climate change are not grounds to tear apart the constitutional division of powers.¹¹ According to the majority, the impact of the Federal Assessment Laws on Alberta and Saskatchewan is particularly devastating because the two provinces hold the majority of oil and gas reserves in Canada, and the two provinces have marginal political influence on the federal government.

The Dissenting Decision

One of the five judges provided a dissenting decision expressing that protecting the environment has become a complex issue because it engages government, civil society, the science community, and leaders of industry and commerce. According to the dissenting judge, government has the duty to put in place legislative processes to protect the environment and the courts have the duty to determine whether said legislative process are constitutional.¹²

The dissenting judge stated that our planet is on fire, and that the majority is heat and the Federal Assessment Laws is water.¹³ According to the dissenting judge, the Federal Assessment Laws offers an opportunity for governments to work collaboratively on issues of overlapping jurisdiction to serve the concerns of citizens.

In summary, the dissenting judge held that the Federal Assessment Laws is a valid exercise of Parliament's authority and is compliant with the Constitution Act, 1867.

Conclusion

So, what does this mean for Saskatchewan? Legally not much. The Alberta Reference was rendered in response to reference questions posed to the Alberta Court of Appeal by the Alberta government. On constitutional reference cases, a court does not have authority to make a formal "declaration" with respect to constitutional validity. Instead, the court is providing an opinion only. The opinion is not binding on any person or government, although it will be considered by some as persuasive. Additionally, within Canadian federalism, courts of one province are not bound to follow decisions of the courts of another province, even on constitutional issues, however, they will also be considered by some as persuasive.

Where it will have implications, however, are on provincial political policies as are alluded to in Drawing the Line: Defending Saskatchewan's Economic Autonomy and those policies' influence on day-to-day decisions made within provincial governments.

Unsurprisingly, the political competition among federal and provincial law-makers over regulation of the environment will continue. In response to the Alberta Reference, Prime Minister Justin Trudeau announced that Canada will be appealing the decision, stating that "the Impact Assessment Act delivered on an important promise we made to Canadians to reform a broken system and restore public trust in how decisions about major projects are made."

A decision of the Supreme Court of Canada on the constitutionality of the Federal Assessment Laws would be an authoritative statement of the law, however, its nature would nonetheless remain that of a reference question and non-binding. If the Supreme Court of Canada determined that the Federal Assessment Laws are unconstitutional, it would undoubtedly result in legislative reform to Federal Assessment Laws.

The federal government has filed a notice of appeal with the Supreme Court of Canada and the appeal hearing is tentatively scheduled for March 20, 2023. Until then, the Federal Assessment Laws remain in effect in Saskatchewan.

Footnotes

1. Reference re Impact Assessment Act, 2022 ABCA 165.

2. Ibid atpara 16.

3. Ibid at para 20.

4. Ibid.

5. Ibid atpara 27.

6. Ibid atpara 28.

7. Ibid atpara 29.

8. Ibid atpara 30.

9. Ibid atpara 31.

10. Ibid atpara 31.

11. Ibid atpara 32-3.

12. Ibid at para 450.

13. Ibid at para 451.

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