Alberta court says Impact Assessment Act still invalid

The Alberta Court of Appeal ruled 4-1 on Oct. 9 that the federal Impact Assessment Act remains unconstitutional, even after Ottawa rewrote parts of it to answer a 2023 Supreme Court of Canada decision.

The ruling, reported by The Canadian Press, sends the law that governs reviews of pipelines, mines and ports back into legal doubt just as the federal government asks Parliament to rebuild its major-project approvals system.

The court found that the law still lets Ottawa halt a project that falls under provincial jurisdiction if the project has even a minimal effect on federal jurisdiction. It said the act “creates great uncertainty due to the potential for previously unpronounced standards to apply to designated projects,” according to The Canadian Press. The court accepted that Parliament can build an assessment scheme that complements environmental regulation, and some of Ottawa’s amendments were not a constitutional problem. But it said the law still gives the federal government overly broad powers, including the ability to impose indefinite prohibitions on entire projects in areas the provinces control.

Alberta Premier Danielle Smith called the decision “yet another big win for Alberta” and urged Ottawa not to appeal again. She asked the federal government to work with the provinces to fix what she called “flawed Trudeau-era legislation.” Ontario and Saskatchewan backed Alberta’s challenge.

The office of Environment Minister Julie Dabrusin said the government is reviewing the decision and considering next steps. Press secretary Amy Falkner said the ruling does not change Ottawa’s commitment to co-operative federalism, and that the government is moving to build at a pace not seen in decades. Neither the federal government nor the court has said whether the case will go to the Supreme Court of Canada.

The case has a short history. The Supreme Court struck down much of the act in 2023, ruling that it went beyond Ottawa’s constitutional powers. Ottawa amended the law, and Alberta went back to its own appeal court, which heard the second challenge in Calgary starting Feb. 24, according to Energy Now.

The timing matters because the act sits at the centre of Bill C-39, the Building Canada Strong Act, which the government introduced on Sept. 21. According to a Sept. 29 analysis by the law firm Blakes, the bill would require decision statements on projects assessed by the Impact Assessment Agency within one year of a complete application. It would also make the Canada Energy Regulator the sole assessor of interprovincial pipelines and power lines, with a 365-day clock for the longest projects.

Ottawa has said the regulator would still be bound by the Impact Assessment Act’s provisions, according to The Canadian Press. That is the part of the law the Alberta court has now found unconstitutional. Whether the ruling forces changes to C-39 before it passes is not clear from the reporting available so far, and we have not seen the full text of the decision.

The ruling also lands in the middle of a dispute over Indigenous rights. Four First Nations organizations, including the Chiefs of Ontario and Nishnawbe Aski Nation, called on Ottawa on Oct. 8 to withdraw C-39, saying that free, prior and informed consent “cannot be squeezed into a predetermined federal project timeline,” as we reported. The coverage of the Alberta decision does not include a response from any Indigenous group. Blakes notes that the bill would let the Environment Minister extend certain timelines by up to 90 days to meet the Crown’s duty to consult.

For Canadians, the practical question is who decides when a pipeline or mine goes ahead, and how long communities have to weigh in. Ottawa and Alberta are partnering on a new oil pipeline to the West Coast, and the Pacific Link project earlier this month became the first to receive a national interest designation under the Building Canada Act. Any change to the federal review law could affect how quickly such projects move, and how much say provinces and First Nations have along the way.

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Sources: Global News / The Canadian Press; Blakes; Energy Now. Via The Canadian Press. Developing: the full court decision was not reviewed.