Defending the new Impact Assessment Act

Here at West Coast, we rarely take on lawsuits – instead, we aim to protect the environment through building stronger environmental laws, bridging Canadian and Indigenous law, and empowering communities to harness the law for a more just and sustainable future.

But when the Alberta government launched a constitutional reference questioning the validity of Canada’s new Impact Assessment Act (IAA), we could not sit on the sidelines.

West Coast was deeply involved in the development of the IAA and its Parliamentary review, including hosting environmental assessment (EA) review summits, making submissions to the federally-appointed EA Expert Panel, weighing in on a federal EA reform discussion paper, regularly meeting with federal officials and Ministers, and making written and in-person submissions to both the House of Commons and Senate committees’ reviews of the Bill. In fact, West Coast was so thoroughly engaged in federal EA reform that I moved from Vancouver to Ottawa in order to do the work more directly.

Although the IAA is not perfect, it is an important step forward in rebuilding public trust in Canada’s environmental reviews. As a result, we felt compelled to stand up for the law to ensure that projects that impact areas of federal jurisdiction are considered in a precautionary way and advance a more sustainable, climate-safe world.

And so, we decided to intervene on behalf of Nature Canada to oppose Alberta’s arguments challenging the IAA. This May, the Alberta Court of Appeal (ABCA) ruled in favour of our application to intervene in the case, and we filed our factum (legal argument) on June 15. Here, we explain what a constitutional reference is and describe our main arguments.

The constitutional reference

The federal and provincial governments have the power to ask a court to review a law (or part of a law) on constitutional and other questions. These cases are called reference cases.

In Alberta, section 26(1) of the Judicature Act permits the Lieutenant Governor in Council to refer any matter to the ABCA, which it does by Order in Council (OIC). On September 9, 2019, Alberta’s Lieutenant Governor in Council made an OIC referring two questions to the Court:

  1. Is the IAA partly or wholly outside of the federal Parliament’s legislative authority and therefore unconstitutional?
  2. Are the Physical Activities Regulations (Project List) partly or wholly outside of Parliament’s authority to enact because they apply to provincially-regulated projects?

The parties to this reference are Alberta and Canada, and there are fourteen intervenors: Saskatchewan and Ontario (who oppose and partially oppose the IAA, respectively), seven non-government organizations and First Nations opposed to the Act, and five environmental coalitions and First Nations that support the IAA.

The thrust of Alberta’s argument against the IAA (which is supported to various degrees by the intervenors opposed to the law) is that the IAA goes beyond the federal government’s constitutional authority because it is overly broad, assessing any and all relevant impacts of projects regardless of whether those impacts are federal or provincial in nature. Additionally, in Alberta’s view the IAA could potentially apply to projects over which the federal government has no constitutional authority. Alberta claims to have its own comprehensive environmental assessment and regulatory regime that renders federal impact assessment redundant, and asserts that federal assessment of natural resource projects under the IAA amounts to an attempt to manage and control Alberta’s resources and economy, contrary to the constitutional division of powers.

Canada, in turn, argues that the IAA is squarely within federal jurisdiction. The federal government claims that the Act is designed to ensure that a project will not be subjected to an impact assessment unless it is known that the project will cause effects within federal jurisdiction (federal effects), and that decision-making is limited to considering the public interest of adverse federal effects.

Canada argues (we believe correctly) that section 92A of the Constitution (which grants to the provinces exclusive jurisdiction over natural resources) does not detract from federal constitutional powers, such as authority over fisheries and navigation, and that the IAA is designed to promote cooperation between federal and provincial governments.

The Constitutional division of powers

Sections 91 and 92 of the Constitution divide powers over matters in Canada between the federal Parliament and provincial legislatures. Under section 91, the federal government has power over such matters as trade and commerce, navigation and shipping, the sea coast and inland fisheries, and criminal law. Section 92, on the other hand, assigns to the provinces matters like forests, local works and undertakings, property and civil rights, non-renewable natural resources, and the generation and production of electrical energy.

Sections 91 and 92 do not address Indigenous jurisdiction (stating only that the federal government may make laws in relation to “Indians, and Lands Reserved for the Indians”). Since the issue of Indigenous inherent jurisdiction is not directly raised in Alberta’s arguments, we do not discuss it in this blog, although as we have noted elsewhere it is highly relevant to EA.

Neither the provinces nor the federal government have exclusive jurisdiction over the environment. In the seminal 1992 case Friends of the Oldman River Society v Canada (Minister of Transport) (Oldman), a majority of the Supreme Court of Canada described the environment as a “constitutionally abstruse matter which does not comfortably fit within the existing division of powers without considerable overlap and uncertainty.”

Due to its overlapping, diverse and important nature, environmental protection is considered to be an area of shared jurisdiction. Both the provinces and the federal government may regulate matters that come under their respective heads (i.e., areas) of power, and they both share authority over overlapping areas so long as the laws are not in direct conflict.

For example, while the federal fisheries power authorizes Parliament to enact laws related to pollution in fish-bearing waters, the provinces regulate matters related to drinking water. The federal Parliament may only legislate with respect to matters assigned to it under section 91 of the Constitution, but in doing so, it may touch on or incidentally affect provincial authority.

Our arguments in the IAA reference

In our factum, we make four main arguments on behalf of Nature Canada. The first is that the “pith and substance” of the IAA (the term the courts use to define a law’s dominant purpose or true character) is focused on federal effects, such as impacts on fisheries, and effects that are caused by a federal regulatory approval or federal funding for a project. This characterization of the IAA is easily seen in its decision-making provisions, which require the Minister or Governor in Council to determine whether a project’s federal effects are in the public interest.

Rather than being a veto over natural resource projects (as Alberta alleges in its factum), the purpose of the IAA is to avoid, mitigate or justify impacts on areas of federal jurisdiction. This focus is reflected in the Act’s purpose provisions, which include protecting the environmental, health, social and economic conditions within Parliament’s authority from projects’ adverse effects.

Our second main argument is that the effect of the IAA is similar to its purpose: in short, it helps federal decision-makers identify and then avoid, mitigate or justify adverse effects on areas of federal jurisdiction. That power is squarely within federal constitutional authority.

In Oldman, the majority of the Supreme Court found that it is not helpful to characterize undertakings as “provincial projects,” or projects “primarily subject to provincial regulation,” and that there is no wide-sweeping legal shield to protect projects regulated by provinces from valid federal legislation. It is within Parliament’s power to prohibit activities with actual or potential harm to a matter within federal authority, and the IAA does not exceed this power.

In fact, the IAA may actually increase projects’ chances of approval, compared to if they did not undergo federal assessment. Impact assessment is a planning tool aimed at identifying ways of designing projects so that they contribute to sustainability by avoiding or minimizing impacts, enhancing benefits, and ensuring that impacts and benefits are equitably distributed across generations and communities. To that end, in addition to the potential effects of a project, the IAA looks at alternatives to the project, alternative means of carrying it out, and potential mitigation measures.

In short, rather than a blunt yes/no regulatory tool, impact assessment helps proponents design projects to the satisfaction of government authorities, Indigenous peoples, and local communities.

Our third main argument is that the federal government should not have to prove that a project will result in federal effects before the assessment starts. Impact assessment is a tool for identifying the potential impacts of projects to inform decision-making. To require that information to be gathered before an assessment begins would be putting the cart before the horse.

Instead, reasonable possibility of federal effects should be enough to trigger an impact assessment. In most provinces, projects will also be undergoing provincial assessments, and the IAA contains a number of mechanisms that federal and provincial authorities (as well as Indigenous nations, where certain procedural steps are met) can use to coordinate their assessments and minimize duplication. In the event that an assessment shows no likely federal effects, the project may proceed.

Our final and main argument is that the federal government may consider all of a project’s relevant impacts, benefits, risks and uncertainties when deciding whether to approve it and if so, under what conditions.

In Oldman, the majority held that it would defy reason to bar federal authorities from considering the broad environmental and socio-economic repercussions of projects that impact areas within federal jurisdiction. For example, many projects that require a permit to impede navigation, such as dams or bridges, do not improve waterway navigation, and so require the minister to “weigh the advantages and disadvantages resulting from interference with navigation,” such as job creation or restricted navigability.

Thus, it should be within the federal government’s power to consider relevant matters within provincial jurisdiction. As the Supreme Court of Canada recognized, a project’s socio-economic benefits may justify its adverse impacts, regardless of whether those benefits are “federal” in nature.

It is likewise appropriate for decision-makers to consider all of a project’s adverse impacts when determining whether federal effects are in the public interest. The Minister may decide, for example, that a mine’s adverse impacts on fish, when considered together with its air pollution and health effects, outweigh the project’s benefits. Similarly, she or he may impose conditions on an approval that enhance the mine’s benefits – for example, to ensure longer-lasting jobs for the local community – in order to find that the impacts on fish are in the public interest.

This viewpoint is supported by another Supreme Court of Canada case, British Columbia v. Canadian Forest Products Ltd. In that case, a majority of the Court recognized the value of ecosystem services, or “the services provided by the ecosystem to human beings, including food sources, water quality and recreational opportunities.” Federal matters, such as fisheries and waterway navigation, are examples of such ecosystem services. Where projects cause federal effects, proponents are essentially seeking permission to use those ecosystem services.

As a result, when the Minister or Governor in Council is deciding whether federal effects are in the public interest, they are in essence deciding whether it is in the public interest to allocate – or even forsake – a federal ecosystem service to the project in question. Accordingly, it is not only appropriate, but indeed necessary to consider all a project’s impacts, benefits, risks and uncertainties in order to make an informed decision as to whether federal effects are in the public interest.

Martin Olszynski makes the point well by using the example of a casino versus a hospital. If two proponents came forward with different projects that would effectively result in the same federal effects, and the local ecosystem could only support one of the projects, it would clearly be rational and acceptable for the federal Minister to look at each project’s benefits and broader impacts when deciding on which project to approve.

In Olszynski’s words:

Just as the Minister might be more willing to authorize the fishery impacts associated with a hospital than with a casino, so too the Minister may be more inclined to authorize fishery impacts associated with a project that is more consistent with the principles of sustainable development than one that is not.

In short, we argue that federal jurisdiction to trigger impact assessments is broad (broader even than Canada seems willing to claim). And while decisions must be rooted in federal jurisdiction, decision-makers may look at all of a project’s impacts, benefits, risks and uncertainties when deciding whether its effects on federal matters are in the public interest.

Next steps

The next stage of the reference is for Alberta and Canada to file reply facta (due summer 2020), and then the Court will schedule a hearing. We do not yet know when the hearing will occur; it could be fall 2020, or be pushed to 2021. At the time of writing, COVID-19 has required many social distancing measures in court proceedings, but the Alberta Court of Appeal is hearing cases by phone and videoconference.

Whatever hearing date is chosen, it is highly unlikely that the Alberta Court of Appeal will issue its decision before 2021. And of course, once we have that decision, it is entirely possible that the decision will be appealed to the Supreme Court of Canada. So, while it may be years away, we may be on track for more direction from the Supreme Court on the scope of federal authority over environmental protection and assessment.

Photo credit: Lauri Sten (Vermilion Lakes, Alberta)

Anna Johnston - Staff Lawyer