The Impact Assessment Act Ruling: A Ripple or a Wave in Emissions Reduction?

The Supreme Court of Canada’s (SCC) recent decision on Bill C-69—the Impact Assessment Act—was a shakeup in how environmental legislation is handled by the federal and provincial governments. The Act allows regulators to consider the potential environmental and social impacts of various resource and infrastructure projects, and was found to be largely unconstitutional by the Supreme Court. The decision will challenge how Canada uses legal frameworks to underpin and influence our ability to reach net-zero emissions by 2050.

On November 7, 2023, we welcomed a distinguished panel of legal and political experts to help navigate the complexities of this ruling and dig into its broader implications. While this was a nuanced conversation about a complex topic, some high-level takeaways include:

The SCC is pushing back on “broad language” surrounding interprovincial environmental impacts
While there is general agreement about federal jurisdiction over areas like interprovincial water pollution, air pollution, and carbon pricing, the SCC ruled that it’s not enough to assert jurisdiction over an individual project’s greenhouse gases, explained University of Ottawa law professor Nathalie Chalifour.

“[The SCC] referenced cooperative federalism, which is the theme of many of the decisions and division of powers in the Supreme Court, and urged both provinces and parliament to exercise leadership on Environmental Protection.”
– Nathalie Chalifour, Full Professor, Centre for Environmental Law and Global Sustainability at the Faculty of Law, University of Ottawa

Politicians who exaggerate the C-69 decision create more uncertainty for the business community
The “open for business” announcement from Alberta’s premiere was a disservice to the business community, says Martin Olszynski, Associate Professor at the Faculty of Law at the University of Calgary.

“You’re really not well served by having provincial politicians who very clearly exaggerate and in fact just outright lie about the meaning of these decisions… We’ve churned through four impact assessment regimes in Canada in four decades while the U.S. is still on the first one that they had. Everybody needs to come to the table in a mature way and try to come up with a regime that’s going to work.”

Balancing criminal law power—using sticks, rather than carrots, to enforce regulation—with flexibility can be a difficult task for the federal government
“Industry demands flexibility,” says Martin Olszynski, Associate Professor at the Faculty of Law at the University of Calgary. “But then they use that flexibility as essentially a legal argument to say that the federal government has surpassed its jurisdiction. When you think about the greenhouse gas Pollution Pricing Act reference—that was the federal government bending over backwards to come up with the most flexible mechanism… The provinces took that and said, ‘we’re going to sue you for being flexible.’”

Provincial and federal governments working together — “cooperative federalism” — is a challenge in a country as expansive and regionally diverse as Canada
“The federal government is just going to be really, really bad at [regulating] at a narrow level… We’re seeing it with clean electricity. The courts can say ‘cooperative federalism’ all they want, but actually what they’re being asked to adjudicate is exactly the opposite.”
– Andrew Leach, Professor, Department of Economics and the Faculty of Law, University of Alberta

The idea behind Canada’s Impact Assessment Act isn’t just about better environmental decision-making. “It’s about making sure good projects get built,” with a focus on developing Canada’s mining and critical mineral supply chain to handle the electrification needs for net zero, says Martin Olszynski, Associate Professor at the Faculty of Law at the University of Calgary.

The central question is whether the federal government has broad power over limiting GHGs, agree Leach and Olszynski.
“The concern is that by regulating transboundary impacts you then get right up inside the provinces’ jurisdiction. So how do you craft a jurisdiction over transboundary impacts that is deft and nimble enough…without usurping [provinces]?”
– Olszynski