From the Canadian Energy Centre

By Deborah Jaremko

Bare minimum amendments to Impact Assessment Act ‘do little’ to address Supreme Court’s concerns

One year ago, the Supreme Court of Canada found the federal government’s law to assess major projects like pipelines and highways breaks the rules of the Canadian constitution.

There’s a good chance it still does, despite amendments enacted this spring.

Lawyers with firms including Osler, Hoskin & Harcourt, Bennett Jones and Fasken have warned  that Ottawa’s changes to the Impact Assessment Act (IAA) leave it open to further constitutional challenges.

One could come from Alberta as soon as November 1, following a four-week deadline set by Premier Danielle Smith for the federal government to address the province’s concerns.

“I don’t think that the amendments have responded adequately to the Supreme Court of Canada’s decision,” says Brad Gilmour, a partner at Osler, Hoskin & Harcourt who co-argued Alberta’s successful 2023 reference case to the Supreme Court.

The governments of Ontario, British Columbia, Saskatchewan, Quebec, Newfoundland and Labrador, New Brunswick and Manitoba supported Alberta’s case, arguing that the IAA had exceeded federal jurisdiction.

The Supreme Court largely agreed, while allowing that there is a place for federal assessment of major projects.

“The court had some significant concerns about federal overreach into areas of provincial jurisdiction, and I think that the amendments have done really little to address that broad concern,” Gilmour says.

“They’ve made very minor changes to the sections that the courts found to be unconstitutional, and the wording they use lacks clarity and lacks certainty.”

Components of the IAA that the Supreme Court found unconstitutional include the decision that starts the process – whether a project requires a federal impact assessment and the decision at its conclusion – whether or not a project should receive final approval to proceed.

“It appears the government has done the minimum possible to address the Supreme Court’s concerns, adding qualifiers to its areas of authority, but failing to correct the legislation’s negative impacts on the pace, cost and efficiency of project approvals,” wrote the Business Council of Canada’s Michael Gullo and Heather Exner-Pirot.

“Canada can’t wait and should be bold and more intentional in its effort to grow market share and respond to a world thirsty for more Canadian-made energy, food and critical minerals.”

According to Gullo and Exner-Pirot, the negative impact of the IAA legislation, which came into effect in 2019, can be seen in Canada’s national inventory of major resource projects.

In 2015, there were 88 energy projects completed with a value of $53 billion. In 2023, that figure halved to 56 completed projects with a value of $26 billion.

Alberta’s government says it has “made repeated requests” for the federal government to consult with the province on the amendments, to no effect.

“Alberta is not taking their foot off the pedal in pushing back,” Exner-Pirot told CEC.

“Our country’s energy and natural resources cannot be developed in a timely and economic manner under the current federal regulatory regime. This is affecting not only the economy, but also our security and our efforts to move to lower emitting energy sources.”