Premiers declare victory over Supreme Court impact assessment ruling. Everyone else says, not so fast

Premiers hostile to the Trudeau’s government’s environmental agenda were quick to declare victory over a Supreme Court of Canada ruling that found the federal law to regulate major development projects “largely unconstitutional.”

Friday’s ruling doesn’t kill the act, but it will force the Liberals back to the drawing board to avoid further legal challenges.

Still, that didn’t stop Alberta Premier Danielle Smith, who has led the provincial backlash to federal policy and celebrated the decision as a “massive win for the protection of sovereign provincial rights.” She also falsely linked the court’s decision on the Impact Assessment Act to proposed clean electricity regulations and oil and gas emissions cap by saying the court decision strengthened the province’s hand as it seeks to fight Ottawa on those policies.

“We call on the federal government to learn the lessons from this decision and abandon their ongoing unconstitutional efforts to seize regulatory control over the electricity and natural resource sectors of all provinces,” she said in a statement.

In Ontario, Premier Doug Ford similarly lauded the ruling, saying it “confirms what we’ve been saying all along … the federal impact assessment process needlessly duplicated Ontario’s rigorous and world-leading environmental assessment requirements.”

The federal government had ordered impact assessments on more than one of Ford’s key projects, including the construction of Highway 413, which cuts through part of the protected Greenbelt lands. Development of the highway around Toronto ground to a halt because federal Environment Minister Steven Guilbeault required the plan go through the federal assessment.

Similarly in Saskatchewan, Premier Scott Moe said the decision should “cause the federal government to rethink the many other areas where it is overstepping its constitutional competence, like electrical generation and oil and gas production.”

However, legal experts and federal officials said the premiers are exaggerating the impact of the ruling.

Ottawa still has “jurisdiction over fisheries, over navigation of shipping, over migratory birds, over Indigenous Peoples and lands for Indigenous Peoples, over trans-boundary river pollution, over marine pollution by ocean dumping … and all of that is still a constitutional basis for impact assessment,” said University of Calgary faculty of law associate professor Martin Olszynski. “It's just that this act wasn't focused enough in its language and needs to be tightened up.”

Enacted in 2019, Ottawa’s Impact Assessment Act created the Impact Assessment Agency, tasking it with evaluating major projects, like the proposed Highway 413 in Ontario, Ring of Fire mining projects, liquified natural gas export terminals, coal mine expansions and more.

Because the impact assessment is wielded by Ottawa, it’s also long been a flashpoint for provincial governments that believe the federal agency was encroaching on areas of provincial jurisdiction.

In April 2022, Guilbeault wrote to Suncor to tell the oil giant its proposed plan to expand one of its oilsands mines, which needed approval from the Impact Assessment Agency, “would likely cause unacceptable environmental effects within federal jurisdiction” — effectively telling the company the plan would be shot down if it tried to push the proposal through the regulator.

Creating a tool powerful enough to halt projects raised the ire of some premiers who believe they have exclusive jurisdiction over resource extraction and development. And while experts told Canada’s National Observer the Supreme Court’s decision isn’t fatal to Ottawa’s climate change and environmental priorities, it’s nonetheless a significant setback.

“It's more than a speed bump. It's like a spike belt,” said Olszynski. “You've got some damage to the car, you’ve got to put new tires on and stuff like that, but you'll keep going.”

A page of amendments along with tightening the language of the legislation to ensure it’s focused on areas of federal jurisdiction would satisfy the bulk of the court’s concerns, he added.

In the five-to-two majority opinion spanning 204 pages, Supreme Court of Canada Chief Justice Richard Wagner confirmed the federal government has the power to do federal environmental assessments, but found the language of the Impact Assessment Act was too broad, which gave way for Ottawa to unconstitutionally regulate areas of provincial jurisdiction.

"The fact that a project involves activities primarily regulated by provincial legislatures does not create an enclave of exclusivity,” Wagner wrote, confirming there is a role for the federal government. “Even a 'provincial' project may cause effects in respect of which the federal government can properly legislate."

The federal government will still retain the ability to regulate projects in areas of federal jurisdiction –– like fisheries, species at risk and certain Indigenous rights.

At a press conference, Guilbeault and Energy and Natural Resources Minister Jonathan Wilkinson said the federal government accepts the Supreme Court’s decision and will take steps to bring the act in line with the guidance of the court.

“We're not talking about rewriting the act, we're talking here about surgical intervention to further define certain elements of it,” Guilbeault told reporters.

Wilkinson added the federal use of the Impact Assessment Agency has “always been focused on areas that touch” federal jurisdiction. Specifically, he said those areas of federal jurisdiction include species at risk, fish and fish habitats, migratory birds, concerns about climate change and the Section 35 rights of Indigenous Peoples.

“So there are major areas where there is a strong federal interest, and what the court did say is we need to make sure we're tethering [the Impact Assessment Act] more closely to those,” he said.

Environmental advocacy groups were quick to acknowledge the setback to federal climate policy, but said it would be possible to amend the existing legislation to bring it onside with the Supreme Court’s opinion.

Ecojustice lawyer Joshua Ginsberg said in a statement that while disappointed in the court’s decision, he noted it is not the only tool available to meet Canada’s climate goals and protect the environment. “It is important that Canada moves forward with other important environmental priorities, including an oil and gas emissions cap, a thermal coal export ban, biodiversity legislation and a ban on single-use plastic.”

The Impact Assessment Act is now the second such piece of legislation to be ruled unconstitutional. In 2016, the Federal Court of Appeal struck down assessment legislation passed by the Conservative government of Stephen Harper.

— With files from The Canadian Press