Alberta v. The Government of Ontario

In 2019, Parliament enacted the Impact Assessment Act (“IAA”) and the Governor in Council made the Physical Activities Regulations (“Regulations") under the IAA. The IAA and Regulations create two schemes in one: (1) sections 81 to 91 of the IAA deal with projects carried out or financed by federal authorities on federal lands or outside of Canada; and (2) the balance of the scheme deals with “designated projects” as defined in the IAA and makes them subject to federal review. Alberta’s Lieutenant Governor in Council referred two questions to the province’s Court of Appeal that were later appealed to the Supreme Court of Canada regarding the constitutionality of the IAA and Regulations. A majority of the Alberta Court of Appeal held that the IAA and Regulations were ultra vires Parliament and unconstitutional in whole. A 5-2 majority of the Supreme Court of Canada upheld the decision in part, finding sections 81 to 91 constitutional but the balance of the scheme ultra vires and thus unconstitutional. In the majority decision, Chief Justice Wagner concluded that the designated projects scheme exceeds federal jurisdiction for two main reasons. Firstly, the scheme focuses on a broad range of factors without specifying how they should influence the decision, shifting the decision-making away from regulating federal impacts and granting the decision maker excessive power to regulate projects beyond federal jurisdiction. Secondly, the IAA’s definition of “effects within federal jurisdiction” is overbroad and goes beyond the limits of federal jurisdiction in Canada’s Constitution, treating all designated projects the same regardless of whether federal Parliament has jurisdiction over them. This lack of tailoring to exclusive federal jurisdiction and the broad scope of “effects within federal jurisdiction” exacerbates the constitutional frailties and erodes the balance of powers in the Canadian federal state. Notably, the majority recognized that environmental protection is one of today’s most pressing challenges and that Parliament has the power to enact a scheme of environmental assessment to meet this challenge, but highlighted Parliament has the duty to act within the enduring division of powers framework laid out in the Constitution. Chief Justice Wagner also specifically noted that the matter of national concern recognized by the Supreme Court of Canada two years earlier in the GGPPA Reference — that of establishing a minimum national standard of carbon pricing of greenhouse gas emissions — does not extend to enabling the federal government to comprehensively regulate greenhouse gas emissions or sweeping regulatory powers in impact assessment legislation. A week after the Supreme Court of Canada’s decision was released, the federal government released interim guidance on the IAA, and the federal government has indicated that it will work “quickly” to introduce amendments to the IAA and Regulations. The amendments, introduced in 2024, significantly narrowed the Act’s scope, including the consideration of project-level greenhouse gas emissions when conducting environmental assessments. In 2024, the Province of Alberta initiated a constitutional challenge before the Alberta Court of Appeal. The challenge contested the federal government’s revised Impact Assessment Act (IAA), which Alberta contends continues to centralize power in Ottawa, infringing on provincial jurisdiction over natural resources and land use. This jurisdiction is protected by Sections 92A and 109 of the Constitution Act, 1867. Alberta contends that these amendments were insufficient, continuing to grant the federal government discretion to delay or block provincially regulated projects. Alberta has referred the matter back to the province’s Court of Appeal.