Impact Assessment Act and the Canadian Energy Regulator Act

In the Court of Appeal of Alberta

Citation: Reference re Impact Assessment Act, 2022 ABCA 165

Date: 20220510

Docket: 1901-0276AC

Registry: Calgary

In the Matter of An Act to enact the Impact Assessment Act and the Canadian Energy

Regulator Act, to amend the Navigation Protection Act and to make consequential

amendments to other Acts, SC 2019, c 28 and the Physical Activities Regulations,

SOR/2019-285

And in the Matter of a Reference by the Lieutenant Governor in Council to the Court of

Appeal of Alberta under the Judicature Act, RSA 2000, c J-2, s 26

_______________________________________________________

The Court:

The Honourable Chief Justice Catherine Fraser

The Honourable Justice Jack Watson

The Honourable Justice J.D. Bruce McDonald

The Honourable Justice Sheila Greckol

The Honourable Justice Jo’Anne Strekaf

_______________________________________________________

Opinion of the Honourable Chief Justice Fraser,

the Honourable Justice Watson and

the Honourable Justice McDonald

Concurred in by the Honourable Justice Strekaf

Dissenting Opinion of the Honourable Justice Greckol

Reference by the Lieutenant Governor in Council

Order in Council 160/2019

Dated the 9th day of September, 2019

Filed the 10th day of September, 2019

Table of Contents

Paragraph

I.

Introduction ................................................................................................................[1]

Positions of the Parties.................................................................................................[34]

II.

A.

B.

Alberta and Intervenors in Support of Alberta ................................................[34]

Canada and Intervenors in Support of Canada ................................................[39]

III.

Relevant Provisions of the Constitution ......................................................................[45]

A.

Constitution Act, 1867 .....................................................................................[45]

1.

2.

Federal Legislative Powers..................................................................[45]

Provincial Legislative Powers..............................................................[45]

B.

Key Provisions Added by the Constitution Act, 1982 .....................................[45]

1.

Additional Provincial Powers under Amendment to the Constitution

Act, 1867 ..............................................................................................[45]

Procedure for Amending the Constitution...........................................[45]

2.

IV.

V.

The Environment and the Division of Powers.............................................................[46]

A.

B.

The Environment is a Constitutionally Abstruse Matter .................................[46]

Environmental Impact Assessments Are Not Within Parliament’s Exclusive

Jurisdiction.......................................................................................................[49]

Joint Federal-Provincial Environmental Accords............................................[50]

C.

History of Prairie Provinces - Ownership of Natural Resources and Section 92A .....[52]

A.

B.

Prairie Provinces Secure Ownership of Their Natural Resources ...................[53]

Federal Government Interventions and Pressures for Constitutional

Reform .............................................................................................................[57]

Constitutional Compromise .............................................................................[64]

C.

1.

2.

3.

4.

Section 92A – Resource Amendment..................................................[64]

Section 38 – Opt-Out Right .................................................................[67]

Section 36 – Economic Development and Equalization......................[69]

Conclusion ...........................................................................................[72]

D.

Role of the Courts............................................................................................[73]

VI.

The Purpose and Scope of the Resource Amendment..................................................[74]

A.

B.

C.

D.

Introduction......................................................................................................[74]

Purpose of the Resource Amendment...............................................................[76]

Scope of the Resource Amendment..................................................................[77]

Significance of the Resource Amendment........................................................[81]

VII. Overview of Environmental Impact Assessment Legislation Federally......................[84]

A. Brief Historical Review of Federal Legislation...............................................[84]

1.

2.

3.

Environmental Assessment and Guidelines Order ..............................[84]

Canadian Environmental Assessment Act, 1992 .................................[86]

Canadian Environmental Assessment Act, 2012 .................................[93]

Page: 1

B.

Overview of the Act and Regulations ............................................................[100]

1.

Scope and Purposes of the Act...........................................................[101]

2.

3.

4.

5.

6.

7.

Relevant Definitions Under the Act Relating to Effects ....................[105]

Exclusivity Principle – Primary and Limited Jurisdiction.................[106]

Activities Included in the IAA............................................................[109]

Section 7 and Prohibitions .................................................................[111]

Section 8 and Prohibitions .................................................................[114]

Phases of Impact Assessment Process ...............................................[116]

VIII. Overview of Environmental Assessment Legislation Provincially ...........................[123]

A.

Alberta............................................................................................................[123]

1.

Overview of Environmental Impact Assessment Legislation in

Alberta .............................................................................................[123]

Operational Aspects of Alberta’s Environmental Impact Assessment

Regime .............................................................................................[127]

In Situ Oil Sands Projects ..................................................................[131]

Canada-Alberta Bilateral Agreement on Environmental

2.

3.

4.

Assessment.........................................................................................[135]

B.

C.

Ontario ...........................................................................................................[136]

1.

Overview of Environmental Assessment Impact Legislation in

Ontario .............................................................................................[136]

Operational Aspects of Ontario’s Environmental Impact Assessment

Regime .............................................................................................[139]

2.

Saskatchewan.................................................................................................[141]

1.

Overview of Environmental Assessment Legislation in

Saskatchewan.....................................................................................[141]

Operational Aspects of Saskatchewan’s Environmental Impact

Assessment Regime ...........................................................................[142]

2.

IX.

Foundational Constitutional Principles......................................................................[145]

A.

B.

C.

Federalism......................................................................................................[145]

Subsidiarity ....................................................................................................[149]

Conclusion .....................................................................................................[152]

X.

Indigenous Peoples and the Division of Federal/Provincial Powers .........................[153]

A.

B.

Section 91(24) of the Constitution Act, 1867.................................................[153]

Section 35 of the Constitution Act, 1982 .......................................................[158]

XI.

Division of Powers Framework .................................................................................[164]

A.

The Two Stages in a Division of Powers Analysis........................................[164]

1.

2.

Characterization of the “Matter” of the Challenged Law ..................[167]

Classification Under Head of Power..................................................[172]

B.

C.

D.

E.

Importance of Keeping the Two Stages Separate..........................................[173]

The Pith and Substance Doctrine and the Environment ................................[174]

The POGG Power ..........................................................................................[181]

Cooperative Federalism and Caution.............................................................[186]

XII. The First Stage: Characterization – What is the “Matter” of the IAA?......................[190]

A. Introduction....................................................................................................[190]

1. The IAA – Two Acts in One...............................................................[190]

B.

C.

Purpose of the Legislative Scheme................................................................[192]

1.

Intrinsic Evidence of Purpose............................................................[192]

a.

b.

c.

Title ....................................................................................[192]

Preamble ................................................................................[194]

Statutory Purposes of the Act.................................................[199]

2.

3.

Extrinsic Evidence of Purpose...........................................................[202]

Conclusions Relating to Purpose of the IAA......................................[205]

Effects of the IAA...........................................................................................[206]

1.

2.

Introduction........................................................................................[206]

Legal Effects of the IAA.....................................................................[210]

a.

Designation and Public Interest Determination vis à vis

Intra-Provincial Designated Projects Are Not Linked to

Federal Decision-Making Authority

[210]

(i)

Scope of the IAA and Designation of Designated

Projects

(ii)

Need for Federal Decision-Making Authority Linked

to Federal Head of Power [219]

b.

Regulation of Any and All Effects of Intra-Provincial

Designated Projects

[227]

[229]

(i)

Self-Defined "Effects Within Federal Jurisdiction"

Are Not All Within Federal Jurisdiction

(ii)

Federal Jurisdiction Does Not Extend to Any and

All Effects of Intra-Provincial Designated Projects [232]

(iii) Public Interest Determination Is Not Limited to

Purported Adverse Federal Effects

[251]

[256]

(iv)

Conclusions

c.

Prohibitions Under Section 7 and Federal Jurisdictional

Overreach

[265]

[272]

[282]

(i)

Prohibitions on Changes to Particular Components

of the Environment

Prohibitions on Changes on Federal Lands, Outside

the Province or Outside Canada

(ii)

(iii) Prohibitions on Matters Affecting Indigenous

Peoples of Canada

[301]

[317]

[318]

[320]

(iv)

(v)

Additional Prohibitions

Term and Effect of the Prohibitions

d.

e.

Exercise of Federal Regulatory Power

Requirement for Public Interest Determination by the

Federal Executive and Consequences if Determination

Is Not Positive

[321]

(i)

(ii)

Key Decision Under the IAA

Public Interest Determination by the Federal

Executive

[322]

f.

g.

Time Limits for Assessments and Decision Statements

Consultation with Other Jurisdictions

[348]

[353]

3.

Practical Effects of the IAA................................................................[356]

a.

b.

c.

Delay

Uncertainty

[358]

[362]

No Practical Remedy to Review Federal Action/Inaction [366]

D.

Conclusion Regarding the “Matter” of the IAA.............................................[372]

XIII. De Facto Expropriation .............................................................................................[374]

XIV. Classification of the Subject Matter of the IAA .........................................................[378]

A.

B.

Introduction....................................................................................................[378]

Federal Heads of Power.................................................................................[380]

1.

2.

Federal Triggers Do Not Determine Classification ...........................[380]

The Subject Matter of the IAA Is Not Within Federal Heads of

Power .............................................................................................[384]

a.

b.

c.

Section 91(12) – Sea Coast and Inland Fisheries...................[385]

Section 132 – Imperial Treaties .............................................[389]

Section 91(24) – Indians and Lands Reserved for the

Indians....................................................................................[393]

Section 91 – National Concern Doctrine Under POGG ........[397]

Section 91(2) – Trade and Commerce ...................................[399]

Section 91(27) – Criminal Law..............................................[402]

d.

e.

f.

C.

Provincial Heads of Power.............................................................................[409]

1.

2.

Introduction........................................................................................[409]

Intra-Provincial Designated Projects Fall Within Provincial Heads

of Power.............................................................................................[410]

a.

Section 92A – Development and Management of Natural

Resources ...............................................................................[411]

Section 109 – Proprietary Rights as Owners of Public

b.

Lands ....................................................................................[414]

Section 92(5) – Management of Public Lands.......................[416]

Section 92(10) – Local Works and Undertakings..................[417]

Section 92(13) – Property and Civil Rights...........................[418]

Section 92(16) – Local or Private Matters.............................[420]

c.

d.

e.

f.

D.

Conclusions on Classification........................................................................[421]

XV. Conclusion on Validity of the IAA and Severance.....................................................[425]

XVI. Interjurisdictional Immunity......................................................................................[428]

XVII. Conclusion ............................................................................................................[431]

_______________________________________________________

Opinion

_______________________________________________________

I. Introduction

[1]

Sustainable economic development cannot be achieved without a sustainable healthy

environment and society. Since we all want a healthy biosphere in which to live, we expect our

governments to make informed decisions about proposed larger scale projects in this country in a

careful and precautionary manner. The utility therefore of environmental impact assessments of

such projects to determine their environmental, social, economic and health impacts is undisputed.

That has been unanimously recognized by the four governments and all intervenors who

participated in this Reference. Indeed, without exception, every government in this country has, in

aid of responsible stewardship of the environment, enacted comprehensive environmental

assessment processes to evaluate the benefits and burdens of significant proposed infrastructure

and resource activities.

[2]

Times of great change often lead to pressures to centralize power. Popular thinking may

consider a central government best suited to manage whatever change dominates public discourse.

Today, that discourse most certainly includes climate change. The increasing frequency of weather

events related to climate change and their detrimental effects are evident; the need to act with

urgency on this front undeniable. But this should not be confused with the issue at stake here.

[3]

This Reference is not about the legitimate concerns all governments and citizens have today

about climate change nor how best to address them. Nor is it about the anxiety many rightly feel

about this subject. Rather, the issue before this Court is whether Parliament has overstepped the

limits of its constitutional mandate under Canada’s Constitution.

[4]

The Lieutenant Governor in Council has asked for this Court’s opinion on two questions:¹

1. Is Part 1 of An Act to enact the Impact Assessment Act and the

Canadian Energy Regulator Act, to amend the Navigation

Protection Act and to make consequential amendments to other

Acts, S.C. 2019, c. 28 unconstitutional, in whole or in part, as being

beyond the legislative authority of the Parliament of Canada under

the Constitution of Canada?

2. Is the Physical Activities Regulations, SOR/2019-285,

unconstitutional in whole or in part by virtue of purporting to apply

to certain activities listed in Schedule 2 thereof that relate to matters

1

The Order in Council was issued under s 26 of the Judicature Act, RSA 2000, c J-2.

Page: 2

entirely within the legislative authority of the Provinces under the

Constitution of Canada?

Part 1 of this legislation consists only of the Impact Assessment Act, SC 2019, c 28, s 1 [Act]. We

sometimes refer to the Act and the Physical Activities Regulations, SOR/2019-285 [Regulations]

collectively as the “IAA” or the “legislative scheme”.

[5]

[6]

For reasons explained in this Opinion, the Act and Regulations are unconstitutional.

Climate change constitutes an existential threat to Canada.²But climate change is not the

only existential threat facing this country. The IAA involves another existential threat – one also

pressing and consequential – and that is the clear and present danger this legislative scheme

presents to the division of powers guaranteed by our Constitution and thus, to Canada itself. This

Reference shines a spotlight on the crucial feature of federalism built into our constitutional

framework. History teaches that government by central command rarely works in a geographically

large country with a diverse population and divergent regional priorities. In most major democratic

countries in the world, federalism and its associated principle, subsidiarity, have been insisted upon

by the governed. That includes Canada which, by deliberate choice, is a federation not a unitary

state.

[7]

Federalism is fundamental to Canada’s existence: Reference re Secession of Quebec,

[1998] 2 SCR 217 at paras 37, 55-60 [Secession Reference].³And what is fundamental to

Canada’s model of federalism is preservation of the carefully calibrated division of powers

between the federal and provincial governments⁴set out in Part VI of the Constitution Act, 1867,

as amended.⁵

[8]

Legislative power is divided and balanced between Parliament and provincial Legislatures

mainly through an allocation of mutually exclusive heads of legislative power. Most federal

powers are those vested exclusively in Parliament under s 91 and s 92(10)(a), (b) and (c) of the

Constitution Act, 1867. Provincial powers include those legislative powers vested exclusively in

provincial Legislatures under s 92 of the Constitution Act, 1867 as well as the proprietary powers

flowing from the provinces’ ownership of their natural resources under s 109. They also include

2

References re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11 at paras 167, 171 [References re Greenhouse

Gas Pollution Pricing Act SCC].

3

See also Liquidators of the Maritime Bank of Canada v Receiver-General of New Brunswick, [1892] AC 437 at

441-43 (PC); In Re the Initiative and Referendum Act, [1919] AC 935 at 942 (PC); Re: Resolution to Amend the

Constitution, [1981] 1 SCR 753 at 905-9.

4

In this Opinion, we include territorial governments within the phrase provincial governments unless the context

otherwise requires.

5

30 & 31 Vict, c 3 (UK), reprinted in RSC 1985, Appendix II, No 5. This includes s 92A, which was added as an

amendment to the Constitution Act, 1867 as part of the Constitution Act, 1982, s 50, being Schedule B to the Canada

Act 1982 (UK), 1982, c 11.

Page: 3

those allocated to the provinces under s 92A(1) with respect to non-renewable natural resources,

forestry resources and sites and facilities for generation and production of electrical energy

(sometimes referred to as “92A natural resources”) in their province. Reserving meaningful powers

to provincial governments remains a key objective of federalism: Canadian Western Bank v

Alberta, 2007 SCC 22 at para 22, [2007] 2 SCR 3 [Canadian Western Bank].

[9]

Under the Constitution, the “environment” is not a head of power assigned to either

Parliament or provincial Legislatures: Friends of the Oldman River Society v Canada (Minister

of Transport), [1992] 1 SCR 3 at 63 [Oldman River].⁶That being so, when either government

level legislates for purposes relating to the environment, that legislation must be linked to a specific

head of power within its jurisdiction. A meritorious motive – protection of the environment – does

not by itself found constitutional jurisdiction for either level of government. Accordingly,

Parliament is not entitled, on the basis that Canadians nationally share legitimate concerns about

the environment and climate change, to legislate and regulate on the environment generally. Nor

is Parliament entitled to require federal oversight and approval of intra-provincial activities

otherwise within provincial jurisdiction on the basis of the environmental effects of those projects,

and factors, not linked, or not sufficiently linked, to a federal head of power. And yet this

legislative scheme authorizes just that.

[10] There is a long history here. The IAA is a classic example of legislative creep. The federal

government appears to have taken the Supreme Court decision in Oldman River upholding the

federal government’s Environmental Assessment and Review Process Guidelines Order, SOR/84-

467 [Guidelines Order] as a license to systematically expand federal powers under the

environmental umbrella. The IAA, with its intrusions into provincial jurisdiction, is far removed

from the federal environmental assessment legislation that the Supreme Court found constitutional

in Oldman River. The assessment process under the Guidelines Order did not include the

usurpations of provincial jurisdiction embedded in the IAA. It was also procedural only, a planning

tool and integral component of sound decision-making.⁷Its purpose was to provide the federal

decision maker with an objective basis for granting or denying permits or approvals required for a

proposed development under federal legislation. But the IAA extends well beyond this.

[11] The full scope of this legislative scheme is revealing. It is both an impact assessment and

regulatory regime. It provides for a comprehensive impact assessment process to assess the

“effects” of certain physical activities carried out in Canada. That includes any physical activity

designated as a “designated project” by the Governor in Council under the Regulations or by the

6

The concepts of the “environment” and “health” are “vague” and “general”: References re Greenhouse Gas

Pollution Pricing Act at para 53.

7

The basic concepts are “early identification and evaluation of all potential environmental consequences of a proposed

undertaking” and “decision making that both guarantees the adequacy of this process and reconciles, to the greatest

extent possible, the proponent’s development desires with environmental protection and preservation”: Oldman River

at 71, citing Roger Cotton & D. Paul Emond, “Environmental Impact Assessment” in John Swaigen, ed,

Environmental Rights in Canada (Toronto: Butterworths, 1981) 245 at 247.

Page: 4

Minister of the Environment under the Act (sometimes referred to as “designated projects” or

“designated project” and the Governor in Council and Minister of Environment sometimes referred

to collectively as the “federal executive”).⁸

[12] A number of physical activities subject to the Act are within exclusive federal jurisdiction.⁹

Some have been prescribed as designated projects (“federal designated projects”). No one

challenges this scheme as it relates to activities within exclusive federal jurisdiction, including

federal designated projects.

[13] A number of physical activities prescribed as designated projects though involve intra-

provincial activities which otherwise fall within exclusive provincial jurisdiction under several

heads of provincial power: s 92A(1) (development and management of natural resources); s 109

(proprietary rights as owners of public lands); s 92(5) (management of public lands); s 92(10)

(local works and undertakings); s 92(13) (property and civil rights); and s 92(16) (local or private

matters). The focus of this Reference has been on the constitutional validity of the IAA when

applied to those intra-provincial activities designated as “designated projects” (sometimes referred

to as “intra-provincial designated projects” or “intra-provincial designated project”). Inclusion of

an intra-provincial activity within this scheme is triggered merely by its designation as a designated

project by the federal executive.

[14] Through this legislative scheme, Parliament has also imposed a regulatory regime on all

intra-provincial designated projects on provincially-owned as well as provincially-controlled

lands. That has been accomplished through a number of means including a public interest

determination by the federal executive and related decision statement. In the result, the IAA

regulates matters within provincial competence as well as federal competence.

[15] Some intra-provincial designated projects may require a permit, license or authorization

(sometimes referred to as a “federal permit”) under other valid federal legislation allowing the

project to be carried out. But others may not. Intra-provincial designated projects include both.

The scheme is not restricted to intra-provincial activities requiring a federal permit, in other words

activities in respect of which a federal authority has some decision-making authority under valid

and applicable federal legislation independent of this scheme. Instead, the IAA regulates all intra-

provincial designated projects even where there is no such federal decision-making. And therein

lies one instance of federal jurisdictional overreach under the IAA.

8

Section 2 defines designated project as follows: “designated project means one or more physical activities that (a)

are carried out in Canada or on federal lands; and (b) are designated by regulations made under paragraph 109(b) or

designated in an order made by the Minister under subsection 9(1). It includes any physical activity that is incidental

to those physical activities, but it does not include a physical activity designated by regulations made under paragraph

112(1)(a.2).”

9

Parliament has exclusive jurisdiction to enact laws in relation to federally-owned and federally-controlled property

and territory and works and undertakings under ss 91 and 92(10)(a), (b) and (c) in addition to its “Peace, Order, and

good Government” (POGG) power.

Page: 5

[16] The impact assessment required for intra-provincial designated projects includes not only

their environmental impacts but a wide range of economic, social, cultural and heritage impacts.

The definitions under the Act sweep within its purview all aspects of the environment no matter

how untethered they may be, when applied to intra-provincial designated projects, to federal heads

of power. The Act touches land, water, air, flora, fauna and energy which pretty well covers the

entire biosphere known to mankind. It is also aimed at social, economic, cultural, humanist and

historical topics which pretty well covers all aspects of human life within the biosphere. The Act

also has within it unilaterally expandable schedules as to the types of construction, development,

business, commerce and other intra-provincial activities that the federal government may choose

to bring under its scrutiny as designated projects. Thus, it covers all those things too.

[17] Under the Act, Parliament has regulated what it has defined as “effects within federal

jurisdiction” from a designated project and what it characterizes as “adverse effects within federal

jurisdiction” from that project. It has self-defined “effects within federal jurisdiction” as various

changes or impacts to the environment, health, social or economic matters from or by a designated

project. That is the hook Canada claims anchors its jurisdiction over intra-provincial designated

projects that do not otherwise require a federal permit. However, while those changes or impacts

may be “effects within federal jurisdiction” for purposes of the Act, that does not make all of them

effects within federal jurisdiction for purposes of the division of powers.

[18] Parliament’s self-definition of “effects within federal jurisdiction” (sometimes referred to

as “purported federal effects” or “federal effects” and “adverse effects within federal jurisdiction”

sometimes referred to as “purported adverse federal effects” or “adverse federal effects”) includes

effects not within its constitutional jurisdiction when applied to intra-provincial designated

projects – namely, the incidental effects of provincial laws (authorizing intra-provincial designated

projects) on a federal head of power, effects not linked, or not sufficiently linked, to a federal head

of power and effects that do not even qualify as significant. And therein lies another instance of

federal jurisdictional overreach under this legislative scheme.

[19] Further, Parliament has layered onto its self-definition of “effects within federal

jurisdiction” mandatory factors which must be considered in the impact assessment. Again, some

are not within Canada’s jurisdiction when applied to intra-provincial designated projects. The

federal executive is then empowered to make a substantive decision, a “public interest

determination”, with respect to each intra-provincial designated project taking into account both

the impact assessment, which itself includes all effects of the project, not simply federal effects,

and prescribed mandatory factors, again not all of which are within Canada’s jurisdiction as they

relate to those projects.

[20] In particular, the federal executive is permitted to use those mandatory factors and all

effects of an intra-provincial designated project in declining to make the key substantive decision

required for the project to proceed – a positive public interest determination. A positive public

interest determination means that the federal executive has determined that the intra-provincial

Page: 6

designated project is in the public interest.¹⁰Without a positive public interest determination, all

the prohibitions under the Act continue, meaning that the proponent of an intra-provincial

designated project is effectively prohibited from proceeding with that project. And without a

positive public interest determination, the federal executive is under no obligation to identify

conditions for the project to proceed. And without a positive public interest determination, other

federal authorities are forbidden from issuing any federal permit required for the intra-provincial

designated project to proceed. And therein lies an even more fatal instance of federal overreach

under this legislative scheme.

[21] For Parliament to empower the federal executive to stop any intra-provincial designated

project over the objections of the provincial government involved unless the federal executive

finds the project to be in the public interest constitutes a breathtaking pre-emption of provincial

legislative authority. The economic life of this country lies largely in the provinces. While some

may believe the IAA’s primary target is fossil fuel projects, no province should assume that intra-

provincial highways or light rail transit systems or flood control or wind farms or solar farms or

any of the innumerable intra-provincial activities a province may decide are needed for its citizens

would be exempt from the IAA. They would not be.

[22] Neither government level has the right to define the parameters of its constitutional

jurisdiction: Desgagnés Transport Inc v Wärtsilä Canada Inc, 2019 SCC 58 at para 140, per

Wagner CJ and Brown J concurring [Desgagnés Transport]. Instead, the ultimate responsibility

for defending the dividing line between provincial and federal governments in this country rests

with the courts: Northern Telecom Canada Ltd v Communication Workers of Canada, [1983]

1 SCR 733 at 741. Courts do not determine the constitutionality of legislation under the division

of powers based on the preference of a majority of Canadians or a majority of provinces.

Majoritarianism is not superior to the Constitution. Indeed, Canada’s Constitution and the Rule of

Law are protections against majoritarianism.

[23] In discharging its duty, the courts have no mandate to erase the dividing line and draw

another: Caron v Alberta, 2015 SCC 56 at para 36, [2015] 3 SCR 511. Rather, the courts must

respect the structure of government that the Constitution has implemented: Trial Lawyers

Association of British Columbia v British Columbia (Attorney General), 2014 SCC 59 at para

26, [2014] 3 SCR 31. The golden thread running through Canada’s Constitution is federalism.

Hence the need for the courts to maintain an appropriate balance between federal and provincial

heads of power: Reference re Firearms Act (Can.), 2000 SCC 31 at para 48, [2000] 1 SCR 783

[Firearms Reference].

[24] Were the courts to uphold the validity of the IAA, all provincial industries, almost every

aspect of a province’s economy that the federal government chooses to sweep within the IAA,

along with a province’s development of its natural resources, would be subject to federal

10

We explain in detail later why the public interest determination involves assessing whether the intra-provincial

designated project overall is in the public interest having regard to federal priorities and policies.

Page: 7

regulation, including an effective federal veto. This would undermine the division of powers,

substantially overriding s 92(5) (management of public lands), s 92(10) (local works and

undertakings), s 92(13) (property and civil rights) and s 92(16) (local or private matters) of the

Constitution.

[25] In addition, it would effectively write s 109 and s 92A(1) out of the Constitution, thereby

ending the provinces’ constitutional rights to ownership and development of their natural

resources. To these fundamental rights of Canada’s constitutional makeup, the IAA expresses no

deference. Instead, this legislative scheme allows the federal government to essentially render

worthless the natural resources of individual provinces by stopping their development. If upheld,

the IAA would permanently alter the division of powers and forever place provincial governments

in an economic chokehold controlled by the federal government.

[26] Perhaps most troubling, this legislative scheme allows the federal government to pick

winners and losers, not just in terms of individual intra-provincial designated projects, and

individual categories thereof, but also in terms of individual provinces. Thus, this legislative

scheme not only has a corrosive effect on the division of powers, it has an equally corrosive effect

on the economic health and well-being of citizens of individual provinces. For those Canadians

living in parts of the country with lesser populations, and, thus, lesser political influence on the

federal government, the economic and social consequences are especially devastating. True respect

for federalism is the only defence against this kind of unrestrained federal power.

[27] This is not an academic matter for western Canada. The early history of Canada prior to

1930 singled out the prairie provinces for economic inequality compared to other provinces. It was

only when ecological and economic disaster befell the prairie provinces that they were provided

with the same ownership and control of public lands and natural resources as the founding

provinces had retained on Confederation. This was finally achieved by constitutional amendment

in 1930. But federal government initiatives started to claw back on that constitutional amendment.

This led to the provinces seeking, and securing, through the addition of s 92A further reinforcement

and expansion of provincial jurisdiction over 92A natural resources.

[28] The IAA raises an issue of fundamental fairness. Through this legislative scheme,

Parliament has taken a wrecking ball to the constitutional right of the citizens of Alberta and

Saskatchewan and other provinces to have their 92A natural resources developed for their benefit.

And in doing so, it has also taken a wrecking ball to something else – and that is the likelihood of

capital investment in projects vital to the economy of individual provinces. Capital investment

does not just happen, especially where the capital investment is measured in the billions, not

millions of dollars. And it particularly does not happen where, as under this legislative scheme,

the investing rules are uncertain, unpredictable, unquantifiable and unreliable.

[29] To deprive Alberta and Saskatchewan, which together have the vast majority of oil and gas

reserves in this country, of their constitutional right to exploit these natural resources – especially

while the federal government continues to permit the import of hundreds of millions of barrels of

Page: 8

oil into Canada from other countries – is to reintroduce the very discrimination both provinces

understood had ended, if not in 1930, then certainly by 1982. To put the extent of those imports in

perspective, in 2020, a year in which consumption was reduced because of the pandemic, Canada

imported more than 200,000,000 barrels of oil that year alone, representing 24.3% of total

consumption of oil in this country.¹¹

[30] The IAA also brings to the fore legitimate concerns about stranding oil and gas resources

in this country as the world transitions away from fossil fuels to a greener economy. This transition

will take time. That is why it is called a transition. That time may be measured in double digits, if

not three or possibly four decades, particularly if carbon capture, utilization and storage, the use

of hydrogen and small modular nuclear reactors allow those resources to be developed in, or near,

a net-zero manner.¹²While many may be delighted by the prospect of stranding these resources,

including Canada’s oil and gas competitors who would thereby enhance their own position for

markets outside Canada and potentially within Canada too, that enthusiasm may not be shared by

the provinces that own these resources nor by the citizens of those provinces.¹³

[31] Parliament has the authority to legislate to protect the environment. However, it must do

so in accordance with the Constitution. For reasons explained in detail in this Opinion, we have

concluded that the subject matter of the IAA is properly characterized as “the establishment of a

federal impact assessment and regulatory regime that subjects all activities designated by the

federal executive to an assessment of all their effects and federal oversight and approval”. When

applied to intra-provincial designated projects, this subject matter does not fall under any heads of

power assigned to Parliament but rather intrudes impermissibly into heads of power assigned to

provincial Legislatures by the Constitution Act, 1867.

[32] Accordingly, the IAA is ultra vires Parliament. Intra-provincial activities requiring a federal

permit under other valid and applicable federal laws remain subject to those laws but in accordance

with the terms of such laws, not this legislative scheme.

[33] In summary, the federal government’s invocation of concerns about the environment and

climate change that all provincial governments and Canadians share is not a basis on which to tear

apart the constitutional division of powers.

11

Canada Energy Regulator, “Market Snapshot: Crude oil imports decreased in 2020, and so did the cost”, online:

<https://www.cer-rec.gc.ca/en/data-analysis/energy-markets/market-snapshots/2021/market-snapshot-crude-oil-imp

orts-decreased-in-2020-and-so-did-the-cost.html> (accessed 7 July 2021). Since daily consumption was estimated at

2,282,479 barrels a day overall for 2020, the imports that year of 554,700 barrels of oil each day amounted to about

24.3% of total consumption. The prior year, 2019, Canada imported more than 250,000,000 barrels of oil that year;

imports that year were about 27.3% of total consumption.

12

On April 14, 2021, Alberta signed onto a Memorandum of Understanding originally made between Ontario, New

Brunswick and Saskatchewan dated December 1, 2019 for the development and deployment of small modular nuclear

reactors.

13

Nor by other democratic nations requiring market access to fossil fuels for crucial purposes during the transition.

Page: 9

II. Positions of the Parties

A.

Alberta and Intervenors in Support of Alberta

[34] Alberta argues that the IAA intrudes impermissibly into provincial jurisdiction. It contends

the IAA is a “Trojan horse”, enabling the federal government, on the pretext of claimed narrow

grounds of federal jurisdiction, to conduct far-ranging inquiries into matters assigned exclusively

to the provinces. The result is federal intrusion into areas of core provincial jurisdiction, including

development of 92A natural resources and local works and undertakings, and an effective federal

veto over intra-provincial activities and resource development.

[35] Alberta characterizes the subject matter of the IAA, its pith and substance, as “the

establishment of a comprehensive impact assessment regime that requires proposed resource

developments and infrastructure projects to undergo a broad ranging assessment of their impacts,

environmental and other, and to subject those projects to federal oversight and approval”.¹⁴

[36] Alberta contends that the IAA departs significantly from the predecessor environmental

assessment legislation and establishes a broad review process that has no jurisdictional connection

to a federal head of power. Alberta points out that the Regulations designate projects and

undertakings within exclusive provincial authority, further revealing the extent of the jurisdictional

overreach. Alberta argues that, in the event this Court concludes the IAA is intra vires, it should

apply the doctrine of inter-jurisdictional immunity and declare that the IAA does not apply to

activities and undertakings under exclusive provincial jurisdiction.

[37] Ontario and Saskatchewan, as well as the Woodland Cree First Nation, the Indian Resource

Council, the Canadian Taxpayers Federation, the Canadian Association of Petroleum Producers,

the Canadian Energy Pipeline Association, the Explorers and Producers Association of Canada,

the Independent Contractors and Businesses Association and the Alberta Enterprise Group all

intervened in support of Alberta’s position.¹⁵Broadly speaking, these intervenors submit that the

IAA allows comprehensive federal regulation of intra-provincial activities that do not fall within

Parliament’s jurisdiction. A number also assert that the IAA represents an attempt by the federal

government to regulate the management and development of 92A natural resources and undo the

negotiated compromise agreement reflected in s 92A.

14

Factum of the Attorney General of Alberta at para 44.

15

Most intervenors endorse the characterization of the pith and substance of the IAA proposed by the level of

government whose position they support. Some, however, suggested alternative characterizations. For example, the

Canadian Association of Petroleum Producers: “To establish a comprehensive impact assessment regime to determine

whether designated infrastructure or resource development projects are consistent with federal objectives and

policies”.

Page: 10

[38] The Woodland Cree and the Indian Resource Council further contend that the IAA

encroaches on the independence of First Nations groups, unduly restricting their ability to exploit

their natural resources and represent their peoples. In particular, they argue that the IAA infringes

on their Aboriginal and treaty rights as protected by s 35 of the Constitution.

B.

Canada and Intervenors in Support of Canada

[39] Canada defends the IAA on the basis it deals only with matters within federal jurisdiction.

It characterizes the IAA as being focussed merely on the “adverse effects within federal

jurisdiction” from designated projects, arguing that the Regulations focus on large projects with

the greatest potential for adverse effects within federal jurisdiction. Canada asserts the federal

government is entitled to take into account the public interest in deciding whether, and if, it will

impose conditions on the proponents of projects that will have “adverse effects within federal

jurisdiction”. And it contends that the decision provisions of the Act restrain the outcome of an

assessment to “adverse effects within federal jurisdiction”.

[40] Canada characterizes the subject matter of the IAA as follows:¹⁶

To establish a federal environmental assessment process to protect

against adverse environmental effects:

a.

b.

on matters within federal jurisdiction (as listed in s 7);

in the exercise of federal regulatory power in other existing

federal schemes (s 8); and

c.

in relation to projects carried out on federal Crown lands, or

by federal authorities outside Canada, or which engage the

provision of financial assistance (ss 81-91).

[41] Canada submits that the IAA relates to multiple heads of federal jurisdiction and, depending

on the factual context of a particular project, one or more federal heads of power may be engaged.

It asserts that the IAA does not regulate intra-provincial designated projects but merely provides

for an impact assessment to determine if there are any adverse federal effects caused by such

projects and, if so, then to prohibit or regulate the same. Canada denies that the IAA creates a

federal veto. In its view, any federal trespass into works, undertakings or activities within the

legislative jurisdiction of the province is merely incidental to protection of those aspects of the

environment within federal legislative jurisdiction.

[42] Nature Canada, Ecojustice Canada Society, MiningWatch Canada Inc., the Canadian

Environmental Law Association, Environmental Defence Inc., Athabasca Chipewyan First Nation

16

Factum of the Attorney General of Canada at para 24.

Page: 11

and Mikisew Cree First Nation intervened in support of Canada. They argue the IAA is a

precautionary tool aimed at safeguarding federal components of the environment. They contend

the IAA is well within federal constitutional limits and has ample support under s 91 of the

Constitution Act, 1867.

[43] The Athabasca Chipewyan First Nation submit that striking down the IAA would restrict

Indigenous participation in environmental assessments and preclude consideration of Indigenous

knowledge. The Mikisew Cree First Nation say that, to the extent the IAA permits the federal

government to assess and make decisions with respect to the impacts of a designated project on

Aboriginal and treaty rights, it is a valid exercise of federal jurisdiction.

[44] Several intervenors allude to the importance of evaluating the IAA in a manner respecting

cooperative federalism. Ecojustice Canada Society argues that the IAA should be upheld under the

federal criminal law power.¹⁷The Canadian Environmental Law Association, Environmental

Defence Inc. and MiningWatch Canada Inc. contend the IAA should also be upheld under the

federal trade and commerce power.

III. Relevant Provisions of the Constitution

A.

Constitution Act, 1867

[45] The key provisions of the Constitution Act, 1867 follow:

1.

Federal Legislative Powers

91. It shall be lawful for the Queen, by and with the Advice and

Consent of the Senate and House of Commons, to make Laws for

the Peace, Order, and good Government of Canada, in relation to all

Matters not coming within the Classes of Subjects by this Act

assigned exclusively to the Legislatures of the Provinces; and for

greater Certainty, but not so as to restrict the Generality of the

foregoing Terms of this Section, it is hereby declared that

(notwithstanding anything in this Act) the exclusive Legislative

Authority of the Parliament of Canada extends to all Matters coming

within the Classes of Subjects next hereinafter enumerated; that is

to say,

...

1A. The Public Debt and Property.

17

Ecojustice Canada Society proposed an alternative characterization of the “matter” of the IAA: “To establish a

federal environmental assessment process to safeguard against adverse environmental effects on certain matters within

federal jurisdiction.”

Page: 12

2. The Regulation of Trade and Commerce.

...

12. Sea Coast and Inland Fisheries.

...

24. Indians, and Lands reserved for the Indians.

...

27. The Criminal Law ...

...

29. Such Classes of Subjects as are expressly

excepted in the Enumeration of the Classes of

Subjects by this Act assigned exclusively to the

Legislatures of the Provinces.

And any Matter coming within any of the Classes of Subjects

enumerated in this Section shall not be deemed to come within the

Class of Matters of a local or private Nature comprised in the

Enumeration of the Classes of Subjects by this Act assigned

exclusively to the Legislatures of the Provinces. [Emphasis added]

132. The Parliament and Government of Canada shall have all

Powers necessary or proper for performing the Obligations of

Canada or of any Province thereof, as Part of the British Empire,

towards Foreign Countries, arising under Treaties between the

Empire and such Foreign Countries.

2.

Provincial Legislative Powers

92. In each Province the Legislature may exclusively make Laws in

relation to Matters coming within the Classes of Subjects next

hereinafter enumerated; that is to say,

...

5. The Management and Sale of the Public Lands belonging

to the Province ...

...

Page: 13

10. Local Works and Undertakings other than such as are of

the following Classes:

(a)

Lines of Steam or other Ships, Railways, Canals,

Telegraphs, and other Works and Undertakings

connecting the Province with any other or others of

the Provinces, or extending beyond the Limits of the

Province:

(b)

(c)

Lines of Steam Ships between the Province and any

British or Foreign Country:

Such Works as, although wholly situate within the

Province, are before or after their Execution declared

by the Parliament of Canada to be for the general

Advantage of Canada or for the Advantage of Two

or more of the Provinces.

...

13. Property and Civil Rights in the Province.

...

16. Generally all Matters of a merely local or private Nature

in the Province.

B.

1.

Key Provisions Added by the Constitution Act, 1982

Additional Provincial Powers under Amendment to the Constitution Act, 1867

92A. (1) In each province, the legislature may exclusively make

laws in relation to

(a)

(b)

exploration for non-renewable natural

resources in the province;

development, conservation and management

of non-renewable natural resources and

forestry resources in the province, including

laws in relation to the rate of primary

production therefrom; and

(c)

development, conservation and management

of sites and facilities in the province for the

Page: 14

generation and production of electrical

energy.

...

(6) Nothing in subsections (1) to (5) derogates from any powers or

rights that a legislature or government of a province had

immediately before the coming into force of this section.

2.

Procedure for Amending the Constitution

38. (1) An amendment to the Constitution of Canada may be made

by ...

(b) resolutions of the legislative assemblies of at least

two-thirds of the provinces that have, in the

aggregate, ... at least fifty per cent of the population

of all the provinces.

...

(3) An amendment [that derogates from the legislative powers,

proprietary rights or any other rights or privileges of the legislature

or government of a province] shall not have effect in a province the

legislative assembly of which has expressed its dissent thereto by

resolution supported by a majority of its members ...

IV. The Environment and the Division of Powers

A.

The Environment is a Constitutionally Abstruse Matter

[46] The environment has not been assigned to either Parliament or provincial Legislatures

under the Constitution Act, 1867. Nor has the environment been allocated to the federal

government under the national concern doctrine.¹⁸If it were, provincial governments would not

be constitutional equals. They could do what they were permitted by the federal government. And

nothing more.

[47] Instead, the courts have recognized that the environment is “a constitutionally abstruse

matter which does not comfortably fit within the existing division of powers without considerable

overlap and uncertainty”: Oldman River at 64. Understood generically as encompassing “the

physical, economic and social”, the “environment” necessarily touches on “several of the heads of

power assigned to the respective levels of government”: ibid. at 63. Thus, regulation of the

18

As noted in Dale Gibson, “Constitutional Jurisdiction over Environmental Management in Canada” (1973) 23:1

UTLJ 54 at 85 [Gibson]: “it is no less obvious that ‘environmental management’ could never be treated as a

constitutional unit under one order of government in any constitution that claimed to be federal, because no system in

which one government was so powerful would be federal.”

Page: 15

environment, including regulation of pollution, has some provincial aspects and some federal

aspects: ibid. at 69; Quebec (Attorney General) v Moses, 2010 SCC 17 at para 36, [2010] 1 SCR

557 [Moses SCC].

[48] Both levels of government may affect the environment (either by acting or not acting) but

only within the legislative powers specifically assigned to each: Oldman River at 65. In other

words, to be valid, a legislative provision must be “linked to the appropriate head of power”, as in

“sufficiently linked” to that head of power: ibid. at 67-68. Identifying a specific head of power is

also important because the extent to which environmental concerns may be taken into account by

the relevant government will vary based on the scope of the power: ibid. at 67; R v Hydro-Québec,

[1997] 3 SCR 213 at paras 114, 117 [Hydro-Québec].

B.

Environmental Impact Assessments Are Not Within Parliament’s Exclusive

Jurisdiction

[49] Neither level of government has exclusive jurisdiction over environmental impact

assessments. Like the environment more generally, impact assessments are not explicitly

enumerated as a head of power under ss 91 or 92 of the Constitution Act, 1867. Indeed, both

Canada and Alberta have long exercised their jurisdiction in this area. Alberta has provided for

environmental impact assessments in legislation since 1973: see The Land Surface Conservation

and Reclamation Act, SA 1973, c 34, s 8; P.S. Elder, “Environmental Impact Assessment in

Alberta” (1985) 23:2 Alta L Rev 286 at 296-298. Canada, meanwhile, first set out formal

regulations dealing with environmental impact assessments in the 1984 Guidelines Order.

C.

Joint Federal-Provincial Environmental Accords

[50] As a consequence of Oldman River, it became apparent that some form of joint approach

by federal and provincial governments to environmental impact assessments involving intra-

provincial activities was desirable. To reduce overlap and duplication of environmental

assessments, the federal government and individual provincial governments have entered into

various accords.¹⁹For example, since 1993, Canada and Alberta have had a bilateral agreement,

the Canada-Alberta Agreement for Environmental Assessment Cooperation, which contemplates

joint panel reviews.²⁰The most recent version of this non-binding bilateral agreement, the 2005

Canada-Alberta Agreement on Environmental Assessment Cooperation [Bilateral Agreement] sets

19

The Canada-Wide Accord on Environmental Harmonization was signed January 29, 1998 by the Canadian Council

of Members of the Environment with the exception of Québec. While not legally binding, it signalled an intention at

both the federal and provincial levels to eliminate overlap and duplication in environmental management matters.

Three sub-agreements were also approved, including one on Environmental Assessment.

20

While the first version of this bilateral agreement dates to 1993, Canada and Alberta had a different earlier bilateral

agreement in place, that is the Canada-Alberta Accord for the Protection and Enhancement of Environmental Quality

(8 October 1975).

Page: 16

out the mechanisms for conducting a joint panel review, including a framework for determining

the lead jurisdiction.²¹

[51] A cooperative approach between the federal government and a provincial government does

not mean that the provincial government has relinquished its jurisdiction to the federal

government. Or vice versa. Neither has a right to cede its constitutional jurisdiction to the other

whether because of concerns about the environment or climate change or otherwise. If the division

of powers is to be changed, this must be done by constitutional amendment, not constitutional

surrender.

V. History of Prairie Provinces - Ownership of Natural Resources and Section 92A

[52] To appreciate the intended scope of provincial power over natural resources, a brief review

of the constitutional history of how the prairie provinces came to acquire ownership and control

of these resources is warranted.

A.

Prairie Provinces Secure Ownership of Their Natural Resources

[53] Unlike other provinces, for decades following their entering into Confederation, the prairie

provinces were denied ownership of the natural resources in their provinces. When Alberta became

a province in 1905, the Alberta Act, 4 & 5 Edw. VII, c 3, s 21 continued to vest all Crown lands,

including mines and minerals, in the federal Crown. Saskatchewan was not granted ownership of

its resources either when it became a province that same year. Nor was Manitoba when it entered

Confederation decades earlier in 1870.

[54] This finally changed with the Natural Resources Acts passed in 1930 by Parliament and

the Legislatures in each of Alberta, Saskatchewan and Manitoba.²²These Natural Resources Acts

incorporated Memorandums of Agreement made between the Dominion of Canada and each

province dated December 14, 1929. The Agreements explicitly recognized both as a recital and in

their operative provisions that the prairie provinces had been in a position of inequality vis à vis

other provinces because they did not own their natural resources. In particular, as set out in the

preamble to each, the intent was to put each signing province “in a position of equality with the

other provinces of Confederation with respect to the administration and control of its natural

resources”. The Agreements thus provided that the Dominion of Canada would transfer all Crown

lands, mines and minerals in each province to that province so that they might be in the same

position as the original provinces of Confederation.

21

It also contemplates that the information generated will be used in the provincial and federal government’s

respective decision-making: s 6.20. This is subject however to legislation to the contrary at either level.

22

See Alberta Natural Resources Act, SC 1930, c 3; Manitoba Natural Resources Act, SC 1930, c 29 and

Saskatchewan Natural Resources Act, SC 1930, c 41.

Page: 17

[55] The British Parliament then passed the British North America Act, 1930, 20-21 Geo. V,

c 26, (now called the Constitution Act, 1930) and made all their provisions law. As a consequence,

that Imperial constitutional law entrenched the prairie provinces’ ownership of their natural

resources in the Constitution, thereby overriding any contrary federal or provincial legislation.²³

This put the prairie provinces in the same position as the provinces (Ontario, Quebec, Nova Scotia

and New Brunswick) that retained ownership of their natural resources at Confederation under

s 109 of the Constitution Act, 1867: Gerald V. La Forest, Natural Resources and Public Property

under the Canadian Constitution (Toronto: University of Toronto Press, 1969) at 34-36 [La

Forest]; Re Exported Natural Gas Tax, [1982] 1 SCR 1004 at 1055-1056 [Natural Gas Tax].

[56] Ownership brought the prairie provinces the right to exploit their natural resources and, in

turn, greater financial security: Natural Gas Tax at 1080. They also gained a number of significant

new powers, including the power to limit production for conservation purposes: Spooner Oils Ltd

v Turner Valley Gas Conservation, [1933] SCR 629. They could regulate their newly Crown-

owned natural resources under s 109 by virtue of s 92(5) of the Constitution Act, 1867. This section

confers exclusive jurisdiction on the provinces over the management of public lands, including

mines and minerals. Provincial ownership also provided revenue in the form of royalties from

Crown leases. As for freehold leases, provinces possess legislative authority to regulate non-

Crown owned resources by virtue of s 92(13) (property and civil rights) and s 92(16) (local or

private matters).

B.

Federal Government Interventions and Pressures for Constitutional Reform

[57] Resource ownership provided Alberta with a measure of security over the development of

its natural resources for over four decades between 1930 and 1973. However, provincial ownership

rights were still subject to laws enacted by Parliament under its heads of power. This could

negatively affect property owned by a province without for that reason alone being rendered

unconstitutional: La Forest at 147-148; Reference re Waters and Water-Powers, [1929] SCR 200

at 212, 219; Attorney-General for Quebec v Nipissing Central Railway Company, [1926] AC 715

at 723-724 (PC) [Nipissing Central Railway]. Accordingly, at that stage, ownership rights alone

were often considered insufficient to determine jurisdiction over a matter.²⁴After large oil reserves

were discovered at Leduc in 1947, leading to a rapid expansion of oil production in Alberta,

Canada implemented several energy policies with wide-ranging effect. That included the National

Oil Policy of 1961 that divided the country’s oil source between east (foreign) and west

(domestic).²⁵

23

The Newfoundland Act, 1949 12 & 13 Geo. V1, c 22 (UK) placed Newfoundland in the same position. But the

Terms of Union did not provide for it to retain ownership of offshore oil and gas resources which, absent Union, would

have arguably belonged to Newfoundland. Under the Atlantic Accord, February 11, 1985, Canada and Newfoundland

and Labrador finally reached an agreement on the joint management of the province’s offshore oil and gas resources

and the sharing of revenues from their exploitation.

24

See for example Gibson at 60.

25

Brendan Downey et al., “Federalism in the Patch: Canada’s Energy Industry and the Constitutional Division of

Page: 18

[58] It was not until the 1973 OPEC embargo sharply increased world oil prices that federal

government actions raised provincial concerns, resulting in escalating actions on both sides.

Beginning in 1973, the federal government enacted a series of measures which directly affected

oil and gas resources owned by the provinces. These included an oil export tax, a national market

for oil and the Petroleum Administration Act, SC 1974-75-76, c 47 [Petroleum Act]. The Petroleum

Act gave the federal government authority to set oil and gas prices unilaterally. Collectively, these

actions directly and adversely affected the western provinces: See J. Peter Meekison & Roy J.

Romanow, “Western Advocacy and Section 92A of the Constitution” in J. Peter Meekison, Roy J.

Romanow & William D. Moull, eds, Origins and Meaning of Section 92A: The 1982

Constitutional Amendment on Resources (Montreal: The Institute for Research on Public Policy,

1985) 3 [Meekison & Romanow].

[59] As early as 1975, provincial premiers concluded that discussions on the Constitution should

include a general review of the division of powers and, in particular, the control of natural

resources, which was put on the agenda at the 1976 First Ministers’ conference: Meekison &

Romanow at 10. Provincial concerns about the scope of their existing jurisdiction over natural

resources were further heightened by litigation in Saskatchewan that culminated in two Supreme

Court decisions, Canadian Industrial Gas & Oil Ltd v Government of Saskatchewan et al, [1978]

2 SCR 545 [CIGOL] and Central Canada Potash Co Ltd et al v Government of Saskatchewan,

[1979] 1 SCR 42 [Potash]: Meekison & Romanow at 3, 7-10. In Saskatchewan’s view, those

decisions undermined the jurisdiction the provinces thought they had over natural resources.

[60] CIGOL involved Saskatchewan’s attempt to capture the increased value of oil after the

OPEC embargo.²⁶Saskatchewan imposed a “mineral income tax” on oil production subject to

freehold leases and a “royalty surcharge” on Crown leases. The Supreme Court held that because

most of the oil was for export, the charges were “export taxes”. That meant the province had no

power to impose either since export taxes involve interprovincial or international trade, a subject

of federal jurisdiction under s 91(2). The Supreme Court also characterized both the income tax

and royalty surcharge as “indirect taxes” which provinces are not competent to impose under

s 92(2).

[61] In Potash, the Supreme Court struck down Saskatchewan’s rationing scheme aimed at

controlling the amount of potash produced in the province. It held that notwithstanding a

province’s general ability to control the production of its natural resources, since most of the potash

was marketed outside the province, the scheme was an impermissible intrusion on federal

jurisdiction over interprovincial and international trade under s 91(2).

Powers” (2020) 58:2 Alta L Rev 273 at 276.

26

The litigation was a battle between a province and the private sector: Robert D. Cairns et al., “Constitutional Change

and the Private Sector: The Case of the Resource Amendment” (1986) 24:2 Osgoode Hall L J 299 at 301, 308.

Page: 19

[62] Given this history, by 1978, Alberta and Saskatchewan led the negotiations on behalf of

the provinces for a constitutional amendment that would expressly confirm and strengthen the

provinces’ ability to develop, manage and control their natural resources. This was partly in

response to the federal government’s having that same year tabled a constitutional amendment bill

omitting any reference to s 109 of the Constitution Act, 1867. Provincial concerns also related to

resource taxation, the federal declaratory power, the federal emergency power and indirect

taxation: Meekison & Romanow at 10-14.

[63] In 1980, further tensions arose when the federal government introduced the National

Energy Program (NEP) and invoked those parts of the Petroleum Act enabling it to unilaterally

establish prices for oil and natural gas. It was the federal government’s view that the rest of Canada,

and not just the oil producing provinces, should benefit financially from the rapid rise in oil prices.

Alberta disagreed. So too did other western provinces. As explained in Meekison & Romanow at

24: “The NEP was seen by the three western provinces as a major assault on provincial ownership

and jurisdiction over resources”.

C.

1.

Constitutional Compromise

Section 92A – Resource Amendment

[64] Developments in September 1981 set the stage for a negotiated agreement to resolve the

constitutional impasse over resource control and management. First, the Supreme Court found the

federal government’s unilateral attempt to patriate the Constitution contrary to constitutional

convention: Re: Resolution to amend the Constitution, [1981] 1 SCR 753. Second, Alberta and

the federal government signed an oil and gas pricing and revenue sharing agreement that brought

the immediate dispute over the NEP to an end: Howard Leeson, The Patriation Minutes

(Edmonton: Centre for Constitutional Studies, Faculty of Law, University of Alberta, 2011) at 13,

23.

[65] It was against this background that the federal and provincial governments finally reached

a compromise regarding provincial powers over natural resources which allowed the Constitution

to be patriated.²⁷For Alberta and Saskatchewan, two key components of that compromise, which

were part of the patriation package signed April 17, 1982, were the inclusion of s 92A (sometimes

called the “Resource Amendment”) in Part VI of the Constitution Act, 1982 which amended the

Constitution Act, 1867, and s 38, the opt-out right, under the amending formula in Part V of the

Constitution Act, 1982.

[66] Section 92A provides for exclusive provincial jurisdiction in three areas: (i) exploration for

non-renewable natural resources; (ii) the development, conservation and management of non-

renewable natural resources and forestry resources; and (iii) the development, conservation and

management of sites and facilities for the generation and production of electrical energy

27

Québec did not agree to the terms of patriation.

Page: 20

(s 92A(1)). It also provides for concurrent or non-exclusive jurisdiction in two areas: (i) the export

of natural resources from the province (s 92A(2)); and (ii) taxing powers over natural resources

(s 92A(4)).

2.

Section 38 – Opt-Out Right

[67] Section 38, the opt-out right, which was part of the constitutional compromise, informs the

purpose and intended scope of s 92A. Alberta and Saskatchewan had insisted that provinces’

proprietary rights to their natural resources, including their development rights under s 92A, be

protected in any constitutional amending formula. Thus, the general amending formula under

s 38(1) of the Constitution Act, 1982 (requiring an agreement by at least 2/3 of the provinces with

at least 50% of the Canadian population and the federal government) is subject to a further

limitation, an opt-out right which protects the provinces’ control over their natural resources.

[68] That opt-out right, set out in s 38(3) of the Constitution Act, 1982, allows an individual

province to opt out of any future constitutional amendment that derogates from the legislative

powers, proprietary rights or any other rights or privileges of a province.²⁸This was designed to

ensure that no constitutional amendment in the future could strip any province of its proprietary

rights and its exclusive right, confirmed in s 92A, to develop its natural resources for the benefit

of its citizens. In other words, when Premiers Allan Blakeney and Peter Lougheed insisted on the

inclusion of s 92A and the opt-out right as conditions of agreeing to patriation of the Constitution,

they took the steps necessary to protect their citizens against future legislative intrusion by other

governments, including the federal government.

3.

Section 36 – Economic Development and Equalization

[69] The Constitution Act, 1982 also included s 36 which provides:

36. (1) Without altering the legislative authority of Parliament or of

the provincial legislatures, or the rights of any of them with respect

to the exercise of their legislative authority, Parliament and the

legislatures, together with the government of Canada and the

provincial governments, are committed to

(a) promoting equal opportunities for the well-being of Canadians;

(b) furthering economic development to reduce disparity in

opportunities; and

28

Under s 38(3), if an amendment under the prescribed amending formula in s 38(2) derogates from the legislative

powers, proprietary rights or any other rights or privileges of a province, then under s 38(3), that amendment shall

have no effect in a province that opts out of the amendment.

Page: 21

(c) providing essential public services of reasonable quality to all

Canadians.

(2) Parliament and the government of Canada are committed to the

principle of making equalization payments to ensure that provincial

governments have sufficient revenues to provide reasonably

comparable levels of public services at reasonably comparable

levels of taxation. [Emphasis added]

[70] This part of the constitutional bargain on patriation commits both the federal and provincial

governments and Parliament and the Legislatures to “promoting equal opportunities for the well-

being of Canadians” and “furthering economic development to reduce disparity in opportunities”:

ss 36(1)(a) and (b), emphasis added. It also commits Parliament and the government of Canada to

make “equalization payments to ensure that provincial governments have sufficient resources to

provide reasonably comparable levels of public services at reasonably comparable levels of

taxation”: s 36(2). Sections 36(1)(a) and (b) established a means whereby the federal government’s

commitment to equalization payments would be assisted by the provinces having equal

opportunities and being able to further their economic development. These sections were

important, not just as aspirational statements, but to underscore equality of opportunity for

development of a province’s natural resources.

[71] Since patriation, Alberta has contributed to the federal government hundreds of billions of

dollars more than it has received.²⁹These funds have in turn assisted the federal government in its

financial capacity to make equalization payments to other provinces. Alberta’s agreement to s 36,

including the concept of equalization payments, was based not only on the inclusion of the

Resource Amendment and the s 38 opt-out right but also on the federal government’s commitment

to further economic development.

4.

Conclusion

[72] In summary, s 92A represents a clear, deliberate negotiated amendment to the Constitution

intended to assure exclusive provincial jurisdiction over the exploration, development,

29

Alberta has not received equalization payments for decades: Trevor Tombe, “'Final and Unalterable' — But Up for

Negotiation: Federal-Provincial Transfers in Canada” (2018) 66:4 Canadian Tax Journal 871. Net federal fiscal

transfers by Alberta, which include money for equalization payments, money for the Canada Health Transfer and

money for the Canada Social Transfer totalled $240 billion for the 12 years alone from 2007 to and including 2018:

Statistics Canada, “Revenue, expenditure and budgetary balance - General governments, provincial and territorial

economic

accounts

(x

1,000,000)”,

online:

(2021)

<https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3610045001>. In 2020, because of the pandemic, Alberta,

like every other provincial government in this country, received more than it contributed to the federal government.

That, of course, is because the federal government has incurred substantial debt to support Canadians through the

pandemic.

Page: 22

management and conservation of a province’s 92A natural resources. ³⁰Nor can s 92A be

interpreted in a constitutional vacuum. It is directly linked to other provisions critical to the

provinces’ agreement to patriation, namely the amending formula, the provincial opt-out right

under s 38(3) and the provisions under s 36 of the Constitution Act, 1982. This was the

constitutional bargain made. And it is one the provinces are entitled to have honoured. To borrow

a phrase from Beetz J in Bell Canada v Quebec (Commission de la santé et de la sécurité du

travail), [1988] 1 SCR 749 at 840, the constitutional amendments agreed to on patriation could

have been different, but they are not.³¹

D.

Role of the Courts

[73] Under the Constitution Act, 1982, the power to amend the Constitution was given

exclusively to the legislative branch. Accordingly, the courts should not permit judicial decisions

to be used to sidestep the amending formula and render the opt-out right nugatory. As Lord Sankey

cautioned in In Re The Regulation and Control Of Aeronautics In Canada, [1932] AC 54 at 70,

judicial interpretation should not be allowed “to dim or to whittle down the provisions of the

original contract upon which the federation was founded”.³²Or, we would add, the constitutional

amendments agreed to on patriation. Incremental changes in favour of the federal government,

once sanctioned, may well encourage the federal government to expand its jurisdictional reach

further yet. And if that expansion should then be approved by the courts, it becomes difficult to

deny that the Constitution has been amended by judicial fiat.³³Thus, the courts must ensure that

the constitutional bargain agreed to on patriation is respected and the division of powers dividing

line maintained.

30

Section 92A(6) makes it clear that nothing in s 92A reduces the provinces’ powers under other provisions in the

Constitution. It does not limit in any way the province’s ownership rights under s 92(5) and s 109 of the Constitution

Act, 1867.

31

Beetz J stated, in reference to Parliament’s power over federal undertakings including in respect of employer-

employee relations: “If this power is exclusive, it is because the Constitution, which could have been different but is

not, expressly specifies this to be the case; and it is because this power is exclusive that it pre-empts that of the

legislatures both as to their legislation of general and specific application, in so far as such laws affect a vital part of

a federal undertaking. The exclusivity rule is absolute and does not allow for any distinction between these two types

of statute.”

32

In warning about judicial interpretations moving away from the original meaning of the text “from what has been

enacted to what has been judicially said about the enactment”, Lord Sankey added this at 70: “To borrow an analogy;

there may be a range of sixty colours, each of which is so little different from its neighbour that it is difficult to make

any distinction between the two, and yet at the one end of the range the colour may be white, and at the other end of

the range black. Great care must therefore be taken to consider each decision in the light of the circumstances of the

case in view of which it was pronounced, especially in the interpretation of an Act such as the British North America

Act, which was a great constitutional charter, and not to allow general phrases to obscure the underlying object of the

Act, which was to establish a system of government upon essentially federal principles. Useful as decided cases are,

it is always advisable to get back to the words of the Act itself and to remember the object with which it was passed.”

33

Hogg has made this point in the context of amending the Constitution through judicial law-making and the

“discovery (meaning invention) by the courts of ‘unwritten constitutional principles’ ....”: Peter Hogg & Wade Wright,

Constitutional Law of Canada, 5th ed (Toronto: Carswell, 2007) (loose-leaf updated 2021) at §15:28 [Hogg].

Page: 23

VI. The Purpose and Scope of the Resource Amendment

Introduction

A.

[74] Some seem to think, or prefer to think, that s 92A is a constitutional nothing. And that it

merely affirmed the powers provinces already had as owners of their natural resources. But the

historical record with respect to the negotiations leading up to its inclusion in the Constitution and

the actual wording of the constitutional text indicate otherwise. The addition of s 92A to Canada’s

Constitution was not a gift from the federal government to the provinces; it was a negotiated

compromise. There is no doubt that the provinces understood that s 92A added to their jurisdiction.

To secure the federal government’s agreement to the addition of s 92A took more than two years

of hard-fought negotiations. In exchange for the agreement of Alberta and Saskatchewan, and other

provinces as well, to patriate the Constitution, the federal government agreed to include s 92A in

the Constitution.

[75] Neither Parliament nor Legislatures enact for no reason: Alberta (Education) v Canadian

Copyright Licensing Agency (Access Copyright), 2012 SCC 37 at para 47, [2012] 2 SCR 345, per

Rothstein J (in dissent but not on this point). Nor do either intend words used in legislation to be

redundant: Medovarski v Canada (Minister of Citizenship and Immigration); Esteban v Canada

(Minister of Citizenship and Immigration), 2005 SCC 51 at para 31, [2005] 2 SCR 539.

Therefore, no legislative provision should be interpreted so as to render it mere surplusage: R v

Proulx, 2000 SCC 5 at para 28, [2000] 1 SCR 61. That interpretive approach applies with even

more force to constitutional amendments. Changes are not made to a constitution for no purpose.

B.

Purpose of the Resource Amendment

[76] Prior to the Resource Amendment, the provincial governments were well aware how their

proprietary rights as owners of their natural resources had been curtailed. To eliminate ambiguity

and ensure that a full array of both legislative and proprietary powers were available to the

provinces as owners of their 92A natural resources, the provinces sought, and secured, a

constitutional amendment that defined with precision exactly what provincial governments had the

exclusive jurisdiction to do as owners of those resources.

C.

Scope of the Resource Amendment

[77] The significance of the Resource Amendment was noted by William D. Moull in “Natural

Resources and Canadian Federalism: Reflections on a Turbulent Decade” (1987) 25:2 Osgoode

Hall LJ 411 at 413 [Moull]:

[The Resource Amendment] was the only component of the 1982

constitutional patriation package that purported to alter the division

of federal-provincial legislative powers, and it represents the first

Page: 24

amendment to the Constitution since Confederation that has had the

effect of enhancing the legislative authority of the provinces.

[78] What then is the scope of provincial jurisdiction under s 92A? Rather than merely add to

the catalogue of heads of power under s 92, s 92A(1) sets out in detail the provinces’ exclusive

powers vis à vis their 92A natural resources. In particular, s 92A(1) expressly provides that “[i]n

each province, the legislature may exclusively make laws in relation to (a) exploration for non-

renewable natural resources in the province; (b) development, conservation and management of

non-renewable natural resources and forestry resources in the province ...; and (c) development,

conservation and management of sites and facilities in the province for the generation and

production of electrical energy” (emphasis added).

[79] Provincial powers under s 92A are very broad, extending from one end of the exploitation

of 92A natural resources, exploration, to the other end, export – and everything in between,

covering as they do exploration, development, management and conservation. The wording under

s 92A was not simply prudent drafting about the scope of provincial jurisdiction. It was designed

to assure provincial governments that the powers listed therein, all of which are also consistent

with proprietary rights, were within their exclusive control. Section 92A(6) reinforces the

exclusivity of provincial powers under s 92A(1). It provides that nothing in subsections (1) to (5)

derogates from any rights or powers that a legislature or government of a province had immediately

before the coming into force of s 92A.³⁴

[80] Hence, the extent to which the IAA interferes with provincial jurisdiction must be assessed

in light of the provinces’ powers under s 92A(1). This section is not constitutionally inferior to ss

91 or 92. To the extent ambiguity existed with respect to a province’s exclusive right to exploit the

92A natural resources it owned, s 92A put this beyond doubt. No principled reason exists to

diminish the full import of the exclusive jurisdiction conferred on the provinces under s 92A(1).

D.

Significance of the Resource Amendment

[81] Section 92A does not override Parliament’s “Peace, Order, and good Government”

(POGG) power nor its powers under both s 92(10)(a) vis à vis interprovincial undertakings and s

92(10)(c) to declare a work or undertaking for the benefit of Canada or two or more provinces:

Ontario Hydro v Ontario (Labour Relations Board), [1993] 3 SCR 327 [Ontario Hydro];

Westcoast Energy Inc. v Canada (National Energy Board), [1998] 1 SCR 322 at paras 80-84.³⁵

But short of the proper invocation of these powers, the purpose of s 92A, when passed, was to

ensure that the approval of projects for the exploration, development, conservation and

management of 92A natural resources was vested exclusively in the province that owned them.

34

Section 92A does not contain a reciprocal provision in favour of Parliament or the federal government. While

Parliament’s jurisdiction is addressed in s 92A(3), that is only with respect to Parliament’s authority to enact laws in

relation to the matters referred to in s 92A(2), that is relating to the export of natural resources from a province.

35

Or Parliament’s powers under s 92(10)(b).

Page: 25

[82] Provincial jurisdiction over natural resources is “one of the mainstays of provincial power”:

Ontario Hydro at 376. Deciding the terms and conditions under which a project to exploit these

natural resources will be constructed and operated goes directly to a province’s power to decide

how best to manage, and the conditions under which it will permit the development of, its 92A

natural resources. That is inextricably linked in turn to a crucial concern of any provincial

government, namely its economy.

[83] Provincial governments should not be faulted for focussing their attention on matters

important to their citizens. That includes not only the environment but also the economy. It is a

false dichotomy to suggest that the two are mutually exclusive. Without a strong economy, a

province’s ability to respond to the needs of its citizens, including meeting the challenges of

climate change, is diminished. Moreover, if a provincial government is not responsible and

accountable for managing its economy and natural resources for the benefit of its citizens, then

who is?

VII. Overview of Environmental Impact Assessment Legislation Federally

A.

1.

Brief Historical Review of Federal Legislation

Environmental Assessment and Guidelines Order

[84] The first mandatory federal environmental assessment process was the Guidelines Order

issued in 1984 under the Department of the Environment Act, RSC 1985, c E-10, s 6.³⁶The

Guidelines Order required all federal departments and agencies with “decision making

responsibility” for any “proposal” involving an “initiative, undertaking or activity” that might have

an environmental effect on an area of federal responsibility to initially screen the proposal to

determine whether it may cause any adverse environmental effects.

[85] The Supreme Court upheld the Guidelines Order as constitutional in Oldman River, and

affirmed its mandatory nature. However, La Forest J linked federal environmental review of

projects otherwise within exclusive provincial jurisdiction to the existence of a specific

“affirmative regulatory duty” on the part of the federal government, in that case under the

Navigable Waters Protection Act, RSC 1985, c N-22 [Navigable Waters Protection Act].³⁷He also

determined that the federal assessment could only “affect matters that are ‘truly in relation to an

institution or activity that is otherwise within [federal] legislative jurisdiction’”: Oldman River at

72, citing Devine v Quebec (Attorney General), [1988] 2 SCR 790 at 808.³⁸

36

Originally the Government Organization Act, 1979, SC 1978-79, c 13, s 14.

37

The term “responsibility” meant the federal government “must have an affirmative regulatory duty pursuant to an

Act of Parliament which relates to the proposed initiative, undertaking or activity”: Oldman River at 47.

38

The Guidelines Order was said to be “supported by the particular head of federal power invoked in each instance”

Page: 26

2.

Canadian Environmental Assessment Act, 1992

[86] In 1992, Parliament enacted the Canadian Environmental Assessment Act, SC 1992, c 37

[CEAA 1992]. It was not proclaimed in force until 1995 when the Law List Regulations, SOR/94-

636 [Law List Regulations] issued under s 59(f) of CEAA 1992 came into force.³⁹

[87] CEAA 1992 was also “decision-based”, setting out four main categories of federal decisions

under which a project would be subjected to an environmental assessment.⁴⁰Three related to the

federal government’s exclusive jurisdiction.⁴¹The fourth category was where a federal authority

under a provision prescribed by the Law List Regulations issued a permit or licence, granted an

approval or took any other action for the purpose of enabling the project to be carried out in whole

or in part: s 5(1)(d).⁴²Only those intra-provincial projects in this category, in other words those

requiring a federal permit, were compelled to undergo an environmental assessment under CEAA

1992.

[88] The extent of the assessment varied by project.⁴³CEAA 1992 contemplated four levels of

assessment, each with increasing requirements: screenings, comprehensive studies, mediations and

panel reviews. Screenings were the default unless the project was listed in the Comprehensive

Study List Regulations, SOR/94-638 [Comprehensive Study List Regulations] or excluded.⁴⁴

[89] Until the Supreme Court’s decision in MiningWatch Canada v Canada (Fisheries and

Oceans), 2010 SCC 2, [2010] 1 SCR 6 [Red Chris], a federal Minister or “responsible authority”

under CEAA 1992 was considered to have the discretion to limit the “scope” of the assessment of

a proposed project to the component thought to fall within federal jurisdiction as opposed to

assessing the entire project as proposed by the proponent (e.g., assessing a dam close to a mine

because it included “the necessary element of proximity that must exist between the impact assessment process and

the subject matter of federal jurisdiction involved”: Oldman River at 72.

39

It was given royal assent June 1992 and proclaimed in force January 1995.

40

Section 5(1), subject to certain exclusions in s 7.

41

Where a “federal authority” (1) proposed the project; (2) provided financial assistance to a project; or (3) sold,

leased or disposed of federal land: s 5(1)(a)-(c).

42

The Law List Regulations listed various federal statutory provisions whose application to a project, including intra-

provincial projects, “triggered” the federal assessment.

43

CEAA 1992, ss 14, 18, 21, 40.

44

Screenings and comprehensive studies are examples of “self-assessment” under which the relevant authority that

proposed to exercise a duty or function assessed the project themselves. Panel reviews were undertaken by independent

expert bodies, often jointly with another jurisdiction.

Page: 27

rather than the entire mine).⁴⁵This was called “scoping to trigger”.⁴⁶Scoping to trigger had

implications for which “track” a project would fall under. While a proposed project might be listed

in the Comprehensive Study List Regulations and thereby require a “comprehensive study”,

scoping the project to include only the portion purportedly falling within federal jurisdiction could

take it out of that category such that only a “screening” would be required.

[90] This “scoping to trigger” approach had been approved in Federal Court of Canada

decisions: Manitoba’s Future Forest Alliance v Canada (Minister of Environment), [1999] FCJ

No 903 (QL) (TD); Friends of the West Country Assn. v Canada (Minister of Fisheries and

Oceans), [2000] 2 FC 263 (CA).⁴⁷These decisions preceded amendments made to CEAA 1992 in

2003 which changed the requirements for projects in the “comprehensive study list” by explicitly

providing for “public consultation” with respect to the proposed scope of the project.

[91] Later, in Red Chris, despite Canada’s submission that nothing in the 2003 amendments to

CEAA 1992 was intended to change the practice of scoping to trigger, the Supreme Court

determined otherwise. It found that the public consultation must take place prior to the actual

scoping decision and that the environmental assessment track was determined by the proposed

project, not by the scoping decision of the federal authority: Red Chris at para 34.⁴⁸In other words,

“scoping to trigger” could not be used to assess only part of a project.⁴⁹

[92] In 2010, following Red Chris, the federal government amended CEAA 1992 as part of an

omnibus budget bill called the Jobs and Economic Growth Act, SC 2010, c 12 (Bill C-9) [Jobs and

Economic Growth Act]. These amendments effectively overruled Red Chris.⁵⁰Bill C-9 restored

“scoping to trigger” by giving the Minister of the Environment the power to scope projects down

to their components. It also reduced public participation in the comprehensive study process.⁵¹

45

As explained by Marie-Ann Bowden & Martin Z. P. Olszynski in “Old Puzzle, New Pieces: Red Chris and

Vanadium and the Future of Federal Environmental Assessment” (2010) Can Bar Rev 445 at 452 [Bowden &

Olszynski]: “This practice involved separating a development proposal into a list of components and then only

‘scoping-in’ those which required federal regulatory approval ....”

46

Bowden & Olszynski trace this history from CEAA 1992 to the Supreme Court’s decisions in Red Chris and Moses

SCC.

47

It was also approved in Prairie Acid Rain Coalition v Canada (Minister of Fisheries and Oceans), 2006 FCA 31,

[2006] 3 FCR 610.

48

The Supreme Court reasoned that while s 15 of CEAA 1992 granted the Minister discretion in terms of scope of the

project, the presumed scope was as proposed and the Minister’s discretion was limited to increasing its scope.

49

The constitutionality of CEAA 1992 was not challenged on this point.

50

These 2010 amendments in Bill C-9 involving CEAA 1992 (see ss 2152-2161) included adding s 15.1 to CEAA

1992 (see s 2155 of Jobs and Economic Growth Act), which stated as follows: “Despite section 15, the Minister may,

if the conditions that the Minister establishes are met, determine that the scope of the project in relation to which an

environmental assessment is to be conducted is limited to one or more components of that project” (emphasis added).

51

Specifically, s 2156 of Bill C-9 amended s 21 of CEAA 1992 to remove the “requirement for public consultation on

Page: 28

the proposed scoping of comprehensive studies”: see Robert B Gibson, “Three analyses of the amendments to the

Canadian Environmental Assessment Act made through the Budget Implementation Act 2010” (2010) 51 CELR 184.

Page: 29

3.

Canadian Environmental Assessment Act, 2012

[93] In 2012, Parliament replaced CEAA 1992 with the Canadian Environmental Assessment

Act, 2012, SC 2012, c 19, s 52 [CEAA 2012] which addressed a number of provincial concerns.⁵²

CEAA 2012 was never the subject of a constitutional challenge by any of the provinces.

[94] First, Parliament attempted to minimize the identified problems arising from duplicate

environmental impact assessments where an intra-provincial activity was involved, namely

jurisdictional uncertainty, intergovernmental conflicts and duplication of resources. To address

these concerns, Parliament provided in CEAA 2012 for a process of substitution and equivalency.

Substitution allowed the federal government to delegate the environmental assessment to a

province and base its decision on the findings of that provincial review. And equivalency allowed

the federal government to treat the provincial assessment as “equivalent” to the federal process for

purposes of determining whether the proposed intra-provincial activity would likely cause a

significant adverse impact on matters within federal jurisdiction.

[95] Second, as with the 2010 amendments to CEAA 1992, CEAA 2012 was designed to step

past the need for environmental assessment of every proposed project in Canada over which the

federal government had decision-making jurisdiction. CEAA 2012 substantially reduced the

number of federal environmental assessments from those under CEAA 1992 by providing that only

those projects designated by regulation or by the Minister of Environment were subject to federal

environmental assessment: CEAA 2012, ss 2, 14, 84(a). It accordingly moved to a “project-based”

regime from the prior “decision-based” regime under which assessments had been triggered by

various kinds of federal decision-making.⁵³This explains why the numbers of projects assessed

federally dropped dramatically from the number “reviewed” under CEAA 1992. Most projects

under CEAA 1992 had proceeded by way of screening without a full comprehensive review. The

CEAA 2012 reforms eliminated screenings. Further, projects designated by regulation under CEAA

2012 did not lead to a federal environmental assessment where the federal government agreed that

a project could be assessed provincially under the substitution and equivalency process.

[96] Third, CEAA 2012 reduced the levels of assessment from four under CEAA 1992

(screenings, comprehensive studies, mediation and panel reviews) to two (assessment by the

“responsible authority” or a panel review). CEAA 2012 did not retain the “scoping to trigger”

provisions from Bill C-9. Scoping had been a significant issue under CEAA 1992 because it

affected whether a project would fall under the “comprehensive study” track or the “screening”

track. But CEAA 2012 eliminated this distinction. Under CEAA 2012, “designated projects” listed

52

For an excellent summary of the differences between CEAA 1992 and CEAA 2012, see Brenda Heelan Powell,

“Environmental Assessment & the Canadian Constitution: Substitution and Equivalency” (28 November 2014), online

(pdf): Environmental Law Centre <https://elc.ab.ca/media/94543/EAConstitutionBriefFinal.pdf>.

53

Rod Northey, Guide to the Canadian Environmental Assessment Act, 2018 Edition (Toronto: LexisNexis Canada,

2017) at 12 [Northey].

Page: 30

in the Regulations Designating Physical Activities, SOR/2012-147 [Regulations Designating

Physical Activities] largely mirrored those projects which had previously fallen under the CEAA

1992 Comprehensive Study List Regulations. Since those projects were subject to a comprehensive

review under CEAA 2012 regardless, that ended the advantage of “scoping to trigger”.

[97] Fourth, the scope and content of the environmental assessment of a designated project

under CEAA 2012 was narrower than under CEAA 1992. The definition of “environmental effects”

in CEAA 2012 was limited to effects on fish and fish habitat, aquatic species at risk, migratory

birds, federal lands, extra-provincial effects and Aboriginal peoples.

[98] Fifth, to minimize delay, CEAA 2012 prescribed legislated time limits for completion of

federal environmental assessments.

[99] Sixth, CEAA 2012 restricted public participation to “interested parties” only.⁵⁴CEAA 1992

had required that a review panel hold hearings in a manner that offered “the public an opportunity

to participate in the assessment”: s 34(b). CEAA 2012 required that a review panel hold hearings

in a manner that offered “any interested party an opportunity to participate in the environmental

assessment”: s 43(1)(c). The term “interested party” was defined in turn as a person who is

“directly affected by the carrying out of the designated project” or “has relevant information or

expertise”. This thereby reduced the extent of involvement by the general public in the assessment

process: s 2(2).

B.

Overview of the Act and Regulations

[100] The environmental impact assessment process federally has morphed from the procedural

planning tool under the Guidelines Order upheld in Oldman River into a substantive regulatory

regime under the IAA.

1.

Scope and Purposes of the Act

[101] The Act applies to and compels (subject to a screening decision that no assessment is

required) a comprehensive assessment and review of any activity anywhere in Canada designated

in the Regulations (sometimes referred to as the “project list”) or by Ministerial order: Act, s 2.⁵⁵

The Governor in Council has broad discretion to decide which activities fall under the Regulations:

Act, s 109(b). The Minister may also designate a physical activity not already prescribed by the

Regulations if the Minister believes that the physical activity may cause adverse federal effects or

if public concerns related to the effects warrant the designation: Act, s 9.

54

The 2010 amendments to CEAA 1992 under Bill C-9 had also limited public participation in the comprehensive

study process.

55

The Governor in Council is authorized to make regulations “for the purpose of the definition designated project in

section 2, designating a physical activity or class of physical activities and specifying which physical activity or class

of physical activities may be designated by the Minister under paragraph 112(1)(a.2)”: Act, s 109(b).

Page: 31

[102] The Act is designed to assess proposed designated projects in their entirety rather than

allowing for “scoping to trigger”. Unlike CEAA 2012, it has been expanded to assess the

socioeconomic effects of proposed projects in addition to their biophysical effects.⁵⁶

[103] The breadth of the impact assessment mandated is illustrated not only by the scope of

purported federal effects but also by at least 20 different factors that must be considered. These

range from changes to environmental, health, social, or economic conditions, to “the extent to

which the designated project contributes to sustainability”, to “the extent to which the effects of

the designated project hinder or contribute to the Government of Canada’s ability to meet its

environmental obligations and its commitments in respect of climate change”, to “the intersection

of sex and gender with other identity factors” to “any other matter relevant to the impact

assessment” that the Impact Assessment Agency of Canada (Agency) “requires to be taken into

account”: Act, s 22(1).

[104] The stated purposes of the Act include fostering sustainability, protecting components of

the environment within federal jurisdiction, assessing the positive and adverse effects of a

designated project, encouraging innovation, promoting cooperation with other jurisdictions,

respecting the rights of Indigenous peoples and providing opportunity for public participation: Act,

s 6(1).

2.

[105] These include the following:

effects means, unless the context requires otherwise, changes to the

Relevant Definitions Under the Act Relating to Effects

environment or to health, social or economic conditions and the

positive and negative consequences of these changes.

effects within federal jurisdiction means, with respect to a physical

activity or a designated project,

(a)

a change to the following components of the environment

that are within the legislative authority of Parliament:

i) fish and fish habitat, as defined in subsection 2(1)

of the Fisheries Act,

(ii) aquatic species, as defined in subsection 2(1) of

the Species at Risk Act,

56

Rod Northey, Liane Langstaff & Anna Côté, A Guide to Canada’s Impact Assessment Act, 2020 Edition (Toronto:

LexisNexis Canada, 2020) at 8 [Northey 2020].

Page: 32

(iii) migratory birds, as defined in subsection 2(1) of

the Migratory Birds Convention Act, 1994, and

(iv) any other component of the environment that is

set out in Schedule 3;

(b)

(c)

a change to the environment that would occur

(i) on federal lands,

(ii) in a province other than the one where the

physical activity or the designated project is being

carried out, or

(iii) outside Canada;

with respect to the Indigenous peoples of Canada, an impact

— occurring in Canada and resulting from any change to the

environment — on

(i) physical and cultural heritage,

(ii) the current use of lands and resources for

traditional purposes, or

(iii) any structure, site or thing that is of historical,

archaeological, paleontological or architectural

significance;

(d)

(e)

any change occurring in Canada to the health, social or

economic conditions of the Indigenous peoples of Canada;

and

any change to a health, social or economic matter that is

within the legislative authority of Parliament that is set out

in Schedule 3.⁵⁷

direct or incidental effects means effects that are directly linked or

necessarily incidental to a federal authority’s exercise of a power or

performance of a duty or function that would permit the carrying

out, in whole or in part, of a physical activity or designated project,

or to a federal authority’s provision of financial assistance to a

person for the purpose of enabling that activity or project to be

carried out, in whole or in part.

57

Schedule 3 of the Act lists “Components of the Environment” and “Health, Social, or Economic Matters.” Under

s 7(2), the Governor in Council may, by order, add or remove a component or matter from Schedule 3. No components

under s 7(1)(a)(iv) or matters under s 7(1)(e) are presently listed.

Page: 33

3.

Exclusivity Principle – Primary and Limited Jurisdiction

[106] The types of activities in the project list relate to a variety of sectors. They include ones

within the exclusive jurisdiction of either the federal or provincial governments. We recognize the

limitations inherent in identifying an activity as being within the exclusive jurisdiction of one

government level.⁵⁸As noted in Oldman River, the other government level may also have

jurisdiction over some aspects of that activity. In particular, intra-provincial designated projects

otherwise subject to exclusive provincial jurisdiction may have aspects subject to federal

jurisdiction. For example, a project may require a permit under the Fisheries Act, RSC 1985, c F-

14 [Fisheries Act].

[107] Nevertheless, identifying which government level has the exclusive jurisdiction for the

subject activity is not a trap but rather a necessary part of a division of powers analysis. The

reference to “exclusive” jurisdiction is, after all, the written text of the Constitution itself. That text

is the foundational basis for constitutional interpretation. ⁵⁹The exclusivity principle means

something in constitutional law.⁶⁰It helps the court identify, and focus on, which government

level has the “primary” jurisdiction for the subject activity as a whole and which has a “limited”

jurisdiction vis à vis some aspects only of that activity or none at all.⁶¹That necessarily includes

zeroing in on the limitations inherent in the scope of the head of power of each government level.⁶²

[108] Put in the context of this case, provincial Legislatures have the exclusive jurisdiction over

intra-provincial designated projects under several provincial heads of power. In other words, they

have the primary jurisdiction over intra-provincial designated projects. Parliament’s jurisdiction is

58

As La Forest J explained in Oldman River at 68: “What is not particularly helpful in sorting out the respective

levels of constitutional authority over a work such as the Oldman River dam, however, is the characterization of it as

a ‘provincial project’ or an undertaking ‘primarily subject to provincial regulation’ as the appellant Alberta sought to

do.”

59

“[C]onstitutional interpretation ... must first and foremost have reference to, and be constrained by, that text”:

Quebec (Attorney General) v 9147-0732 Québec inc., 2020 SCC 32 at para 9. “The primacy of our written

Constitution remains one of the fundamental tenets of our constitutional framework”: Quebec (Attorney General) v

Canada (Attorney General), 2015 SCC 14 at para 18, [2015] 1 SCR 693.

60

For an excellent history of the various pre-Confederation resolutions leading up to the final draft of the British

North America Act, 1867 (renamed the Constitution Act, 1867 on patriation in 1982) and the evolution and significance

of the exclusivity principle, see Asher Honickman, “Watertight Compartments: Getting Back to the Constitutional

Division of Powers” (2017) 55:1 Alta L Rev 225 at 227-231 [Honickman].

61

One author has characterized the two as “comprehensive” jurisdiction as opposed to “restricted” jurisdiction: Steven

A. Kennett, “Federal Environmental Jurisdiction After Oldman” (1993) 38 McGill LJ 180 at 187-191 [Kennett].

62

As La Forest J explained in Oldman River at 67, “the exercise of legislative power, as it affects concerns relating

to the environment, must, as with other concerns, be linked to the appropriate head of power, and since the nature of

the various heads of power under the Constitution Act, 1867 differ, the extent to which environmental concerns may

be taken into account in the exercise of a power may vary from one power to another.”

Page: 34

limited to the consequences of those projects on federal heads of power. And so too is Parliament’s

regulatory authority over those projects.⁶³

4.

Activities Included in the IAA

[109] The following activities designated in the Regulations Schedule⁶⁴are matters primarily

within exclusive federal jurisdiction:

• certain types of projects or activities located within a National Park or federally

protected wildlife area, bird sanctuary or protected marine area (ss 1-11);

• specified matters involving the military or defence (ss 12-17);

• uranium mines or mills (ss 20-23);

• nuclear facilities (ss 26-29);

• offshore oil or gas facilities (ss 34-36);

• new international electrical transmission lines or inter-provincial power lines

designated under the Canadian Energy Regulator Act (s 39);

• offshore oil and gas pipelines (s 40);

• interprovincial oil and gas pipelines (s 41);

• offshore wind power generating facilities (ss 44-45);

• aerodromes or runways (ss 46-47);

• international or interprovincial bridges or tunnels (s 48);

• canals or causeways in navigable waters (ss 49-50); and

• marine terminals (ss 52-53).

63

The Supreme Court recognized this distinction in Moses SCC at para 36: “There is no doubt that a vanadium mining

project, considered in isolation, falls within provincial jurisdiction under s. 92A of the Constitution Act, 1867 over

natural resources. There is also no doubt that ordinarily a mining project anywhere in Canada that puts at risk fish

habitat could not proceed without a permit from the federal Fisheries Minister, which he or she could not issue except

after compliance with the CEAA. The mining of non-renewable mineral resources aspect falls within provincial

jurisdiction, but the fisheries aspect is federal” (emphasis added).

64

The Regulations include one Schedule.

Page: 35

[110] Importantly, however, designated projects also include intra-provincial activities otherwise

within provincial jurisdiction such as mining, renewable energy, transportation and oil and gas.

The following activities designated in the Regulations Schedule are matters primarily within

exclusive provincial jurisdiction:

• certain activities with respect to new or existing coal, diamond, metal (other than

uranium), rare earth element mines or stone quarry sand or gravel pits exceeding a

specified daily production capacity (ss 18-19);

• certain activities with respect to existing or new oil sands mines with a bitumen

production capacity of 10,000 m³/day or more (ss 24-25);

• the construction, operation, decommissioning, abandonment or expansion of a fossil

fuel-fired power generating facility with a production capacity of 200 MW or more (ss

30-31);

• the construction, operation, decommissioning, abandonment or expansion of an in situ

oil sand extraction facility with a bitumen production capacity of 2,000 m³/day or more

in a province that does not have provincial legislation limiting the amount of

greenhouse gas emissions produced by oil sands sites in the province or where such

limits have been reached (ss 32-33);

• the construction, operation, decommissioning and abandonment of new, or expansion

of existing, oil refineries, facilities to liquify petroleum products from coal or natural

gas, sour gas processing facilities, petroleum storage facilities, natural gas liquids

storage facilities above specified production or storage capacities (ss 37-38);

• the construction, operation, decommissioning and abandonment of a new, and

expansion of an existing, hydroelectric generating facility over a certain production

capacity (ss 42-43);

• the construction, operation, decommissioning and abandonment of a new all-season

public highway that requires a total of 75 km or more of new right of way (s 51);

• the construction, operation, decommissioning and abandonment of a new facility, or

the expansion of an existing facility, for the treatment of hazardous waste that is within

500 m from a natural water body (ss 56-57); and

• the construction, operation, decommissioning and abandonment of a new, or expansion

of an existing, dam or dyke or water diversion structure that exceed certain limits (ss

58-61).

Page: 36

5.

Section 7 and Prohibitions

[111] Section 7 of the Act prohibits the proponent of a designated project, and that would include

all intra-provincial designated projects, from doing “any act or thing in connection with the

carrying out of the designated project, in whole or in part, if that act or thing may cause” any of

the listed effects. The listed effects track almost word for word the definition of “effects within

federal jurisdiction”, that is the purported federal effects. Under s 7(3), a proponent of a designated

project cannot do anything that may cause any of the effects listed in s 7(1) unless and until: (a)

the Agency decides under s 16(1) that the project does not require an impact assessment; (b) the

proponent complies with the conditions in the decision statement issued for the project following

an impact assessment; or (c) the Agency permits the proponent to do something in aid of the impact

assessment.

[112] In particular, s 7 provides as follows:

7 (1) Subject to subsection (3), the proponent of a designated project

must not do any act or thing in connection with the carrying out of

the designated project, in whole or in part, if that act or thing may

cause any of the following effects:

(a)

a change to the following components of the environment

that are within the legislative authority of Parliament:

(i) fish and fish habitat, as defined in subsection 2(1)

of the Fisheries Act,

(ii) aquatic species, as defined in subsection 2(1) of

the Species at Risk Act,

(iii) migratory birds, as defined in subsection 2(1) of

the Migratory Birds Convention Act, 1994, and

(iv) any other component of the environment that is

set out in Schedule 3;

(b)

(c)

a change to the environment that would occur

(i) on federal lands,

(ii) in a province other than the one in which the act

or thing is done, or

(iii) outside Canada;

with respect to the Indigenous peoples of Canada, an impact

— occurring in Canada and resulting from any change to the

environment — on

Page: 37

(i) physical and cultural heritage,

(ii) the current use of lands and resources for

traditional purposes, or

(iii) any structure, site or thing that is of historical,

archaeological, paleontological or architectural

significance;

(d)

(e)

any change occurring in Canada to the health, social or

economic conditions of the Indigenous peoples of Canada;

or

any change to a health, social or economic matter within the

legislative authority of Parliament that is set out in

Schedule 3.

(2) The Governor in Council may, by order, amend Schedule 3 to

add or remove a component of the environment or a health, social

or economic matter.

(3) The proponent of a designated project may do an act or thing in

connection with the carrying out of the designated project, in whole

or in part, that may cause any of the effects described in subsection

(1) if

(a)

the Agency makes a decision under subsection 16(1) that no

impact assessment of the designated project is required and

posts that decision on the Internet site;

(b)

the proponent complies with the conditions included in the

decision statement that is issued to the proponent under

section 65 with respect to that designated project and is not

expired or revoked; or

(c)

the Agency permits the proponent to do that act or thing,

subject to any conditions that it establishes, for the purpose

of providing to the Agency the information or details that it

requires in order to prepare for a possible impact assessment

of that designated project or for the purpose of providing to

the Agency or a review panel the information or studies that

it considers necessary for it to conduct the impact assessment

of that designated project.

Page: 38

(4) Despite paragraph (1)(d), the proponent of a designated project

may do an act or thing in connection with the carrying out of the

designated project, in whole or in part, that may cause a change

described in that paragraph in relation to an Indigenous group,

community or people that holds rights recognized and affirmed by

section 35 of the Constitution Act, 1982 if the change is not adverse

and the council, government or other entity that is authorized to act

on behalf of the Indigenous group, community or people and the

proponent have agreed that the act or thing may be done.

[113] Contravening s 7 is an offence under the Act, punishable by substantial fines under s 144.

6. Section 8 and Prohibitions

[114] Under the Act, Parliament has also regulated what it has defined as “direct or incidental

effects” and what it characterizes as “adverse direct or incidental effects”. Direct or incidental

effects include effects that are directly linked or necessarily incidental to a federal authority’s grant

of a federal permit or approval that a designated project requires under other valid federal

legislation to proceed: Act, s 2. Simply, this definition captures those designated projects requiring

a federal permit to proceed. Various sections of the Act refer to “adverse direct or incidental

effects” and “adverse effects within federal jurisdiction” together.⁶⁵

[115] Section 8 of the Act prohibits a federal authority from issuing a federal permit for a

designated project unless a positive public interest determination has been made by the federal

executive or unless no impact assessment is required:

A federal authority must not exercise any power or perform any duty

or function conferred on it under any Act of Parliament other than

this Act that could permit a designated project to be carried out in

whole or in part and must not provide financial assistance to any

person for the purpose of enabling that designated project to be

carried out, in whole or in part, unless

(a) the Agency makes a decision under subsection

16(1) that no impact assessment of the designated

project is required and posts that decision on the

Internet site; or

65

Examples: “the effects within federal jurisdiction or the direct or incidental effects” or “the adverse effects within

federal jurisdiction and the adverse direct or incidental effects” or “the adverse effects within federal jurisdiction or

the adverse direct or incidental effects” or “those that are adverse effects within federal jurisdiction and those that are

direct or incidental effects” or “which ... are adverse effects within federal jurisdiction and which are direct or

incidental effects”: Act, ss 6(d), 9(1), 16(2)(b), 28(3), 33(2), 36(2)(a), 51(1)(d)(ii), 59(2), 60(1)(a), 61(1), 62, 63(b)

and 106(2)(c)).

Page: 39

(b) the decision statement with respect to the

designated project that is issued to the proponent of

the designated project under section 65 sets out that

the effects that are indicated in the report with respect

to the impact assessment of that project are in the

public interest.

7.

Phases of Impact Assessment Process

[116] There are three main phases to the impact assessment process.

[117] First, there is the planning phase: Act, ss 10-18. A proponent of a designated project

provides the Agency with a description of the project that must include information prescribed by

regulation. An initial project description is provided based on Schedule 1 of the Information and

Management of Time Limits Regulations, SOR/2019-283 [Information Regulations]: Act, s 10(1).

The Agency then consults with a number of parties, on the basis of which it provides the proponent

with a summary of issues: Act, s 14(1). The proponent must then provide the Agency with a notice

setting out a response to this summary of issues and a detailed project description based on

Schedule 2 of the Information Regulations: Act, s 15(1). If the Agency decides a designated project

requires an impact assessment, it issues a notice of commencement outlining the information and

studies needed to conduct the assessment and documents set out in s 5 of the Information

Regulations: Act, s 16; s 18(1).

[118] Second, there is the impact assessment phase. This begins with the proponent collecting

the requested information and completing the required studies which it provides to the Agency in

a document called an “impact statement”: Act, s 19(1).⁶⁶An assessment of the designated project

is then carried out, either by the Agency or, in cases where the Minister is of the view it is in the

public interest, a review panel. The potential effects of a designated project are assessed, after

which a report (Report) is prepared by the Agency or review panel detailing the effects of the

project: Act, ss 25, 51(1)(d)(i)-(ii). The Report must set out the likely effects of the designated

project, indicate the adverse federal effects and specify the extent to which those effects are

significant.⁶⁷

[119] Notably, the Report must take into account the factors set out in s 22(1) (sometimes referred

to as the “s 22 mandatory factors”), namely:

66

Government of Canada, Impact Assessment Agency of Canada, “Phase 2: Impact Statement”, online:

<https://www.canada.ca/en/impact-assessment-agency/services/policy-guidance/impact-assessment-process-overvie

w/phase2.html>.

67

The Report must also explain how any provided Indigenous knowledge was considered, summarize any public

comments and recommend mitigation measures and follow-up programs: Act, ss 28(3)-(3.2), 51(1)(d)(ii.1)-(iv).

Page: 40

(a) the changes to the environment or to health, social or economic

conditions and the positive and negative consequences of these

changes that are likely to be caused by the carrying out of the

designated project, including

(i) the effects of malfunctions or accidents that may occur in

connection with the designated project,

(ii) any cumulative effects that are likely to result from the

designated project in combination with other physical

activities that have been or will be carried out, and

(iii) the result of any interaction between those effects;

(b) mitigation measures that are technically and economically

feasible and that would mitigate any adverse effects of the

designated project;

(c) the impact that the designated project may have on any

Indigenous group and any adverse impact that the designated project

may have on the rights of the Indigenous peoples of Canada

recognized and affirmed by section 35 of the Constitution Act, 1982;

(d) the purpose of and need for the designated project;

(e) alternative means of carrying out the designated project that are

technically and economically feasible, including through the use of

best available technologies, and the effects of those means;

(f) any alternatives to the designated project that are technically and

economically feasible and are directly related to the designated

project;

(g) Indigenous knowledge provided with respect to the designated

project;

(h) the extent to which the designated project contributes to

sustainability;

(i) the extent to which the effects of the designated project hinder or

contribute to the Government of Canada’s ability to meet its

environmental obligations and its commitments in respect of climate

change;

Page: 41

(j) any change to the designated project that may be caused by the

environment;

(k) the requirements of the follow-up program in respect of the

designated project;

(l) considerations related to Indigenous cultures raised with respect

to the designated project;

(m) community knowledge provided with respect to the designated

project;

(n) comments received from the public;

(o) comments from a jurisdiction that are received in the course of

consultations conducted under section 21;

(p) any relevant assessment referred to in section 92, 93 or 95;

(q) any assessment of the effects of the designated project that is

conducted by or on behalf of an Indigenous governing body and that

is provided with respect to the designated project;

(r) any study or plan that is conducted or prepared by a jurisdiction

— or an Indigenous governing body not referred to in paragraph (f)

or (g) of the definition jurisdiction in section 2 — that is in respect

of a region related to the designated project and that has been

provided with respect to the project;

(s) the intersection of sex and gender with other identity factors; and

(t) any other matter relevant to the impact assessment that the

Agency requires to be taken into account. [Emphasis added]

[120] Third, there is the decision phase: Act, ss 60-66. The Minister or Governor in Council is

required to make a public interest determination with respect to the designated project which must

be based on both the Report (which must take into account the s 22 mandatory factors) and the

factors set out in s 63 (sometimes referred to as the “s 63 mandatory factors”; the “s 22 mandatory

factors” and “s 63 mandatory factors” being sometimes collectively referred to as the “mandatory

factors”). If the public interest determination is positive, the Minister or Governor in Council must

also determine what conditions will be imposed: Act, ss 64(1)-(2). The Minister must then issue a

“decision statement” to the proponent informing the proponent of the public interest determination

Page: 42

made by either the Minister or Governor in Council and the reasons for it and, if applicable, any

conditions that must be complied with by the proponent: Act, s 65(1).

[121] If the public interest determination is not positive, that is negative, the proponent continues

to be prohibited from proceeding with the designated project if it may cause any of the purported

federal effects: Act, s 7(3). This effectively prohibits the proponent from proceeding since the

negative public interest determination constitutes a finding by the federal executive that the

designated project may cause such purported federal effects. Further, without a positive public

interest determination, the federal executive has no obligation to set out any conditions to allow

the proponent to proceed regardless: Act, s 64(1), s 64(2). In addition, as noted, if the proponent

requires a federal permit to proceed, no federal authority is permitted to issue that federal permit

without a positive public interest determination: Act, s 8(b). Other enforcement measures are also

available to prevent the proponent from proceeding: Act, ss 120-140.

[122] In the real world, these provisions reduce to this: unless and until the federal executive

determines that an intra-provincial designated project is in the public interest, the proponent of

that project cannot proceed with it, full stop.

VIII. Overview of Environmental Assessment Legislation Provincially

A.

1.

Alberta

Overview of Environmental Impact Assessment Legislation in Alberta

[123] For decades, Alberta has played an international leadership role in developing oil and gas

resources in an environmentally responsible manner. Alberta was one of the first jurisdictions in

Canada to implement an environmental impact assessment process. It first enacted legislation for

this purpose in 1973, more than a decade before federal environmental assessment legislation.

[124] The Environmental Protection and Enhancement Act, RSA 2000, c E-12 [EPEA] currently

governs provincial environmental assessments in Alberta. The process is administered by Alberta

Environment and Parks or, in cases of upstream oil and gas or coal development, the Alberta

Energy Regulator.⁶⁸

[125] The Environmental Assessment (Mandatory and Exempted Activities) Regulation, Alta Reg

111/1993 [Mandatory and Exempted Activities Regulation] passed under the EPEA classifies

projects as mandatory or exempted for purposes of conducting a provincial environmental

assessment. Schedule 1 of the Mandatory and Exempted Activities Regulation lists mandatory

68

The Alberta Energy Regulator was created by s 3 of the Responsible Energy Development Act, SA 2012, c R-17.3,

which also dissolved the predecessor Energy Resources Conservation Board (s 81).

Page: 43

projects.⁶⁹The full list, which is extensive and runs from (a) to (aa), includes projects such as the

construction, operation, or reclamation of:

• a pulp, paper, newsprint or recycled fibre mill with a capacity of more than 100

tonnes per day;

• a quarry producing more than 45,000 tonnes per year;

• a dam greater than 15 metres in height;

• a surface coal mine producing more than 45,000 tonnes per year;

• an oil sands mine;

• a commercial oil sands, heavy oil extraction, upgrading or processing plant

producing more than 2000 cubic metres of crude bitumen or its derivatives per

day;

• a thermal electrical power generating plant that uses non-gaseous fuel and has

a capacity of 100 megawatts or greater;

• a hydroelectric power generating plant with a capacity of 100 megawatts or

greater;

• an oil refinery;

• a sour gas processing plant that emits more than 2.8 tonnes of sulphur per day;

• a pesticide manufacturing plant.

[126] In addition, the Director may also require an environmental assessment for any project the

Director decides warrants further consideration: EPEA, s 43.⁷⁰In deciding whether to subject a

project to an environmental assessment, the Director must consider factors such as the size,

location, nature and complexity of the project as well as public concerns: EPEA, s 44(3).⁷¹

2.

Operational Aspects of Alberta’s Environmental Impact Assessment Regime

[127] The purposes of the EPEA focus on environmental protection and sustainable development,

integrating environmental and economic decision-making in the earliest planning stages,

predicting the environmental, social, economic and cultural consequences of a proposed activity

and engaging key stakeholders and the general public: EPEA, s 40.

[128] The environmental assessment process results in the production of an environmental

impact assessment report (EIA Report). Under s 49 of the EPEA, the EIA Report must include

information such as:

69

Schedule 2 sets out exempted projects.

70

The term “Director” is defined in s 43 of the EPEA, as well as ss 44-56, as being “the Director who is designated

for the purposes of those sections”.

71

Alberta provided examples of two projects that have been reviewed in accordance with the Director’s exercise of

discretion: Alberta Sulphur Terminals Ltd.’s sulphur forming and shipping facility near Bruderheim, Alberta and the

expansion of the Castle Mountain Resort near Pincher Creek, Alberta (Affidavit of Corinne Kristensen at paras 25-

26: Alberta Record at A6-7).

Page: 44

• a description of the activity;

• an analysis of the need for the activity;

• a site selection analysis;

• a description of potential positive and negative environmental, social, economic

and cultural impacts of the proposed activity, including cumulative, regional,

temporal and spatial considerations and the significance of these effects;

• plans to mitigate any negative impacts;

• alternatives to the proposed activity;

• plans to monitor environmental impacts;

• a program of public consultation; and

• any other necessary information.

[129] Federal stakeholders can also contribute to provincial impact assessments under the EPEA.

Federal agencies, including the Agency, Environment and Climate Change Canada and Fisheries

and Oceans Canada, can be invited to participate in the review of an EIA Report.⁷²

[130] Once an EIA Report is complete, it is referred to the appropriate regulatory decision-maker

to determine if the activity is in the public interest and whether regulatory approvals should be

granted.

3.

In Situ Oil Sands Projects

[131] Alberta has a highly developed and comprehensive legislative regime to address all aspects

of development of its oil and gas resources, including environmental consequences. In situ

recovery is used where the oil sands from which bitumen is to be extracted are buried too deep to

mine, that is more than 75 metres below the ground. Wells are drilled to extract the bitumen.⁷³

[132] In situ operations are subject to a number of specific Directives from the Alberta Energy

Regulator.⁷⁴It currently regulates 85 active thermal/enhanced in situ projects and over 215 active

72

Affidavit of Corinne Kristensen at para 38: Alberta Record, A11.

73

This process is explained in some detail in Alberta Energy Regulator, “In Situ Recovery”, online:

<www.aer.ca/providing-information/by-topic/oil-sands/in-situ-recovery>. Where the bitumen is too viscous to flow

to the well on its own, heat must be added or fluids injected to reduce its viscosity. Most in situ bitumen recovery uses

steam to heat the bitumen in the reservoir. This is known as thermal in situ recovery. There are two main thermal in

situ oil sands technologies: steam-assisted gravity drainage and cyclic steam stimulation. While they are the most

widely used, other options exist: Toe-to-Heel Air Injection, Vapour Extraction Process and an Electro-Thermal

Dynamic

Stripping

Process:

see

Energy

Education,

online:

<https://energyeducation.ca/encyclopedia/In_situ_oil_sands_mining>.

74

In situ operations are required to recycle as much water as possible. Typically 90% of the water is recycled: Alberta

Regulator, “In Situ Recovery”, online:

<www.aer.ca/providing-information/by-topic/oil-sands/in-situ-recovery>.

Energy

Page: 45

primary recovery in situ projects. ⁷⁵A proponent must secure the necessary environmental

approvals before proceeding. Assessments are “mandatory” under the Mandatory and Exempted

Activities Regulation if the in situ project “will produce more than 12,600 barrels (2000 m³) of

bitumen per day”.⁷⁶A proponent seeking to develop an in situ project in the oil sands must also

obtain a “scheme approval” under the Oil Sands Conservation Act, RSA 2000, c O-7. Other

approvals might include approvals under the Oil and Gas Conservation Act, RSA 2000, c O-6 (for

well licences), Pipeline Act, RSA 2000, c P-15 (for pipeline licences), Water Act, RSA 2000, c W-

3 (to divert water and/or cause impacts to water bodies) and the Public Lands Act, RSA 2000, c P-

40 (for access to and use of public lands).⁷⁷

[133] In situ oil recovery is akin to extracting oil through individual oil wells drilled into the

ground.⁷⁸Thus, under prior federal environmental legislation, in situ oil sands projects typically

did not require a federal environmental impact assessment.⁷⁹The exception was if the project

proponent required a federal permit under federal legislation such as the Fisheries Act.⁸⁰

[134] To place the addition of in situ projects to the project list in context, mining versus in situ

methods of recovery today in Alberta are currently roughly equal. Mining accounts for 47% of

current production and in situ, 53%. However, in situ is expected to outpace mining in the future

to the point where mining will make up 19% of production and in situ 81%.⁸¹

4.

Canada-Alberta Bilateral Agreement on Environmental Assessment

75

76

Affidavit of Camille Almeida at para 12: Alberta Record, B4.

Affidavit of Camille Almeida at paras 27, 31: Alberta Record, B7-8. Exhibit “D” (Alberta Record, A39-47) of the

Affidavit of Corinne Kristensen (Alberta Record, A1-23) lists completed environmental assessments in Alberta. Of

the 67 in situ projects on the list, 66 were subject to a “mandatory” assessment and one to a “discretionary” assessment

which took place.

77

Affidavit of Camille Almeida at paras 18-26: Alberta Record, B5-7.

78

As explained in the Affidavit of Paul Tsounis at para 11: “In-situ oil sands production requires infrastructure and

surface footprints that are similar to conventional oil and gas production and does not involve or require surface

mining” (Alberta Record, C4).

79

Affidavit of Corinne Kristensen at para 88: Alberta Record, A22.

80

Affidavit of Camille Almeida at para 29: Alberta Record, B7.

81

Affidavit of Paul Tsounis at para 11, which notes that it is “estimated that approximately 81% of Alberta’s oil sands

resource will be developed using in situ methods rather than mining methods” (Alberta Record at C4). This figure is

derived from Natural Resources Canada data attached as Exhibit “B” to his Affidavit (Alberta Record, C14-15).

Page: 46

[135] The optional process outlined in the Bilateral Agreement has previously been used for

projects subject to an assessment under the EPEA and in respect of which federal jurisdiction has

been triggered.⁸²

B.

1.

Ontario

Overview of Environmental Assessment Impact Legislation in Ontario

[136] The Environmental Assessment Act, RSO 1990, c E.18 [ONEAA] sets out the processes to

evaluate the environmental impact of intra-provincial enterprises, activities, plans, programs or

proposals. The purpose of the ONEAA is “the betterment of the people of the whole or any part of

Ontario by providing for the protection, conservation and wise management in Ontario of the

environment”: ONEAA, s 2. “Environment” is defined broadly to include the natural, social,

economic, cultural and built environments: ONEAA, s 1(1).

[137] The ONEAA applies to: (a) enterprises, activities, plans, programs, or proposals of the

public sector, such as provincial ministries, municipalities, or public bodies; and (b) enterprises,

activities, plans, programs, or proposals of the private sector designated by regulations or voluntary

agreement: ONEAA, ss 3, 3.0.1.

[138] With the approval of the Lieutenant Governor in Council, the Minister may exempt an

undertaking from the ONEAA or amend, impose or revoke conditions imposed on an undertaking

under the ONEAA if the Minister considers it in the public interest to do so: ONEAA, s 3.2(1). The

Minister may also vary or dispense with requirements under the ONEAA if another jurisdiction

already imposes restrictions on the undertaking, and the Minister considers those requirements to

be equivalent to what is required in Ontario under a harmonization agreement: ONEAA, s 3.1. For

example, Ontario and Canada may coordinate their respective environmental assessments under a

harmonization agreement.

2.

Operational Aspects of Ontario’s Environmental Impact Assessment Regime

[139] An undertaking subject to the ONEAA will undergo either the streamlined environmental

assessment process or the individual environmental assessment process. The streamlined process

usually applies to undertakings carried out routinely with predictable environmental effects that

can be readily managed. These are set out in Class Environmental Assessment approvals,

exempting regulations and Minister’s declaration orders: ONEAA, s 16, 39(f), 3.2. Some

undertakings within a routine class may warrant additional study and consideration in which case

the ONEAA authorizes the Minister to impose additional conditions or require the undertaking to

go through the individual process instead: ONEAA, s 16(3).

82

Affidavit of Corinne Kristensen at para 89: Alberta Record, A22.

Page: 47

[140] The individual assessment process usually applies to large-scale complex undertakings

where there is the potential for significant environmental impacts. This process is intended to

assess reasonable alternatives or means of implementing the undertaking, taking into account the

environmental advantages and disadvantages. The individual process involves:

• Preparation of Terms of Reference: Terms of reference setting out the

framework for the planning and decision-making process must be prepared and

reviewed. At this stage, the proponent also gives public notice of the proposed

terms of reference: ONEAA, ss 6(1)-(3.6).

• Approval of Terms of Reference: The Minister decides whether to approve the

terms of reference or ask for amendments: ONEAA, ss 6(4)-(6).

• Environmental Assessment: If approved, the environmental assessment will be

prepared and submitted in accordance with the approved terms of reference.

The assessment will contain a description of the purpose and rationale for the

undertaking, a description of the environmental impacts, a description of the

actions that may be reasonably necessary to mitigate or prevent environmental

impacts, an evaluation of any alternative methods of carrying out the

undertaking and a description of any consultation that has taken place: ONEAA,

ss 6.1-6.2.

• Review of Environmental Assessment: The environmental assessment will be

reviewed by the Director appointed under the ONEAA. There will be an

opportunity for public comment on the undertaking, the environmental

assessment and the Director’s review: ONEAA, ss 7, 7.2. The Director will give

the proponent an opportunity to remedy any deficiencies and may reject the

environmental assessment if not satisfied that the deficiencies have been

remedied: ONEAA, s 7(6). The Minister may also decide whether to refer all or

part of the decision to the Environmental Review Tribunal: ONEAA, ss 9.1-9.3.

The Minister (or Tribunal) then decides whether to approve the undertaking

(subject to the approval of the Lieutenant Governor in Council), and must take

into account a list of factors set out in the ONEAA including the purpose of the

ONEAA and any public comments: ONEAA, ss 9(1)-(2), 9.1(2)-(3).

C.

1.

Saskatchewan

Overview of Environmental Assessment Legislation in Saskatchewan

[141] The Environmental Assessment Act, SS 1979-80, c E-10.1 [SKEAA] sets out the assessment

processes for intra-provincial developments that impact the environment to obtain approval from

the Saskatchewan Ministry of Environment. “Environment” is defined broadly to include the

natural, social, economic and cultural environments: SKEAA, s 2(e).

Page: 48

2.

Operational Aspects of Saskatchewan’s Environmental Impact Assessment Regime

[142] The assessment process first involves a screening step to determine whether the project

meets the definition of a “development”. The proponent must apply for a determination whether

its project is a “development” and provide the Minister with all information reasonably required

to make that determination: SKEAA, s 7.2. Under s 2(d), “development” is defined as:

any project, operation or activity or any alteration or expansion of

any project, operation or activity which is likely to:

(i) have an effect on any unique, rare or endangered feature of the

environment;

(ii) substantially utilize any provincial resource and in so doing

pre-empt the use, or potential use, of that resource for any other

purpose;

(iii) cause the emission of any pollutants or create by-products,

residual or waste products which require handling and disposal in a

manner that is not regulated by any other Act or regulation;

(iv) cause widespread public concern because of potential

environmental changes;

(v) involve a new technology that is concerned with resource

utilization and that may induce significant environmental change; or

(vi) have a significant impact on the environment or necessitate a

further development which is likely to have a significant impact on

the environment.

[143] If the project does not fall within the definition of “development”, the proponent will

receive a Ministerial determination that an environmental impact assessment is not necessary:

SKEAA, s 7.6. If the project does meet the definition of “development”, the proponent must then

obtain Ministerial approval in order to proceed with the development: SKEAA, s 8(1).

[144] To obtain Ministerial approval, the proponent must submit an environmental impact

assessment of the development and an impact statement relating to the development: SKEAA,

s 9(1). The Minister will review the statement and impose any conditions considered appropriate

and the statement will be made available for public inspection: SKEAA, ss 11(1)-(2). The Minister

may appoint persons to conduct additional inquiries at any point prior to making their decision:

Page: 49

SKEAA, s 14. The Minister will then either give approval to proceed with or without terms and

conditions or refuse to approve the development: SKEAA, s 15(1).

IX. Foundational Constitutional Principles

A.

Federalism

[145] Federalism is a foundational principle of Canada’s constitutional architecture and defining

characteristic of Canada as a nation.⁸³It finds its “primary textual expression” in the division of

powers set out mainly in ss 91 and 92 of the Constitution Act, 1867: Secession Reference at para

47; Reference re Genetic Non-Discrimination Act, 2020 SCC 17 at para 20 [Genetic Non-

Discrimination]. Under this division, “broad powers were conferred on the provinces to ensure

diversity, while at the same time reserving to the federal government powers better exercised in

relation to the country as a whole to provide for Canada’s unity”: References re Greenhouse Gas

Pollution Pricing Act, 2021 SCC 11 at para 49 [References re Greenhouse Gas Pollution Pricing

Act SCC].

[146] This reflects the balance the Fathers of Confederation chose between diversity and unity;

reconciling the two was achieved by granting significant powers to provincial governments:

Secession Reference at para 43. Thus, federalism recognizes the “autonomy of provincial

governments to develop their societies within their respective spheres of jurisdiction”: Secession

Reference at para 58, cited in R v Comeau, 2018 SCC 15 at para 78, [2018] 1 SCR 342.

[147] Federalism has distinct advantages. It enhances efficiency by decentralizing power. And in

doing so, it enhances accountability to the people that governments serve. Moreover, since neither

level of government has unlimited power, each serves as a check on the other. In addition,

federalism encourages opportunities for innovation and new ways of dealing with old problems

especially where provinces or regions face unique challenges. This permits new solutions to be

tested locally or regionally first, thereby avoiding the problems invariably inherent in a one size

fits all solution for challenges faced by all provinces.⁸⁴Additionally, by its nature, our federal

structure creates competitive incentives in the marketplace.⁸⁵

[148] The Constitution Act, 1867 grants Parliament the authority to enact laws for the “Peace,

Order, and good Government of Canada” and in relation to roughly 30 classes of laws described

in ss 91, 92(10), 92A(3), 93(4), 94, 94A, 95, 101, 132 and other parts of the Constitution Act, 1867.

It grants the provincial Legislatures the authority to enact laws as described in ss 92, 92A, 93, 94A

83

Secession Reference at para 32; References re Greenhouse Gas Pollution Pricing Act at para 48. The objectives

of federalism are to “reconcile unity with diversity, promote democratic participation by reserving meaningful powers

to the local or regional level and to foster co-operation among governments and legislatures for the common good”:

Canadian Western Bank at para 22.

84

Hogg at §5:8.

85

The Constitution specifically contemplates people seeking opportunities: see s 6 of the Charter.

Page: 50

and 95. A law enacted by Parliament or a provincial Legislature is valid only if the maker had the

power to pass it. Neither has unlimited legislative authority.

B.

Subsidiarity

[149] Subsidiarity has been recognized as an underlying principle of federalism: see Dwight

Newman, “Changing Division of Powers Doctrine and the Emergent Principle of Subsidiarity”

(2011) 74:1 Sask L Rev 21 at 26-28. Subsidiarity is the principle that “law-making and

implementation are often best achieved at a level of government that is not only effective, but also

closest to the citizens affected and thus most responsive to their needs, to local distinctiveness, and

to population diversity”: 114957 Canada Ltée (Spraytech, Société d’arrosage) v Hudson (Town),

2001 SCC 40 at para 3, [2001] 2 SCR 241. The division of powers generally adheres to this

principle: Peter Hogg & Wade Wright, Constitutional Law of Canada, 5th ed (Toronto: Carswell,

2007) (loose-leaf updated 2021) at §5:7 [Hogg].⁸⁶It accomplishes this by “distributing power to

the government thought to be most suited to achieving the particular societal objective”: Secession

Reference at para 58.⁸⁷

[150] The principle of subsidiarity also reflects the political realities of our geographically large

country whose population is concentrated in certain provinces. Subsidiarity is a counterbalance to

centralism and majoritarianism.⁸⁸Those provinces with the largest populations and most Members

of Parliament will often have the most substantial influence on the policies of the federal

government when, as typically happens, they are responsible for the election of that government.

As a result, policies chosen by the federal government are often dictated by the wishes of the

majority, especially the majority in those areas responsible for their election. Therefore, what is

important to an individual province and its citizens may not be as important to the federal

government.

[151] The protection for individual provinces, all of whom may find themselves on the outside

looking in at one time or another, lies in the division of powers. This helps ensure that a province,

no matter how small or large, is able to defend itself against those asserting that the national good

trumps that province’s interests.⁸⁹In recognizing the benefit of the proximity of government to

86

In Reference re Assisted Human Reproduction Act, 2010 SCC 61 at para 273, [2010] 3 SCR 457 [AHRA

Reference], LeBel and Deschamps JJ suggested the principle of subsidiarity could act as an “interpretive principle

that derives, as this Court has held, from the structure of Canadian federalism and that serves as a basis for connecting

provisions with an exclusive legislative power”.

87

See also Hugo Cyr, “Autonomy, Subsidiarity, Solidarity: Foundations of Cooperative Federalism” (2014) 23:4

Const F 20 at 26.

88

As stated at para 66 of the Secession Reference, “[n]o one majority is more or less ‘legitimate’ than the others as

an expression of democratic opinion, although, of course, the consequences will vary with the subject matter. A federal

system of government enables different provinces to pursue policies responsive to the particular concerns and interests

of people in that province.”

89

Former Alberta Premier Peter Lougheed captured these concerns well: “The only way that there can be a fair deal

Page: 51

the people that government serves, subsidiarity invigorates confidence in the electors that their

voice is heard and valued. As an interpretive principle, therefore, subsidiarity militates strongly

against erosion of provincial powers.

C.

Conclusion

[152] Thus, in determining whether the IAA is unconstitutional, federalism, including

subsidiarity, weighs heavily in the analysis. Where a doubt arises about classification of a

challenged law, the subsidiarity principle, an essential aspect of federalism, favours provincial

jurisdiction.⁹⁰

X. Indigenous Peoples and the Division of Federal/Provincial Powers

A.

Section 91(24) of the Constitution Act, 1867

[153] Canada has exclusive jurisdiction to legislate in relation to “Indians, and Lands reserved

for the Indians” under s 91(24) of the Constitution Act, 1867. The main statutory form in which

Parliament has exercised its s 91(24) jurisdiction is the Indian Act, RSC 1985, c I-5 [Indian Act].⁹¹

[154] Canadian courts have long rejected the idea that Indigenous peoples and “Lands reserved

for the Indians” are federal “enclaves” from which provincial laws are excluded. “First Nations

are not enclaves of federal power in a sea of provincial jurisdiction”: Kitkatla Band v British

Columbia (Minister of Small Business, Tourism and Culture), 2002 SCC 31 at para 66, [2002]

2 SCR 146 [Kitkatla]; see also Paul v British Columbia (Forest Appeals Commission), 2003 SCC

55 at para 36, [2003] 2 SCR 585 [Paul]; Cardinal v Attorney General of Alberta, [1974] SCR 695

at 702-703 [Cardinal]. Therefore, while only Parliament can validly enact legislation in relation

to “Indians, and Lands reserved for the Indians”, provincial legislation can affect and thus apply

to these subjects “so long as the law is in relation to a matter coming within a provincial head of

power”: Hogg at §28:7.

[155] Accordingly, provincial laws of general application usually apply to the Indigenous

peoples of Canada of their own force, that is proprio vigore: Cardinal at 702-703; NIL/TU,O

Child and Family Services Society v B.C. Government and Service Employees’ Union, 2010

for the citizens of the outlying parts of Canada is for the elected provincial governments of these parts to be sufficiently

strong to offset the political power in the House of Commons of the populated centres. That strength can only flow

from the provinces’ jurisdiction over the management of their own economic destinies and the development of the

natural resources owned by the provinces”: Meekison & Romanow at 11.

90

That was the view of LeBel and Deschamps JJ in AHRA Reference in concluding at para 273 that subsidiarity

“would favour connecting the rules in question with the provinces’ jurisdiction over local matters, not with the criminal

law power”.

91

“Indians” include the Inuit, Métis, and non-status Indians (Daniels v Canada (Indian Affairs and Northern

Development), 2016 SCC 12, [2016] 1 SCR 99 [Daniels]), though Parliament has not included these groups in the

Indian Act.

Page: 52

SCC 45 at para 71, [2010] 2 SCR 696 [NIL/TU,O]. Those laws are constitutionally valid even if

they have incidental effects on “Indians, and Lands reserved for the Indians”: Rempel Bros.

Concrete Ltd. v Chilliwack (District of), 1994 CanLII 1728 at para 24, 5 WWR 122 (BCCA).⁹²

[156] The one exception involves the doctrine of interjurisdictional immunity. Under this

doctrine, a valid provincial law of general application which impairs the “core” of s 91(24) cannot

apply of its own force.⁹³The “core” of s 91(24) refers to matters going to “Indianness”: Hogg at

§28:9.⁹⁴Such matters have been found to include, for example, Indian status (Natural Parents v

Superintendent of Child Welfare, [1976] 2 SCR 751); “possession of lands on an Indian reserve”

(Derrickson v Derrickson, [1986] 1 SCR 285 at 296); and occupancy of a family residence on a

reserve (Paul v Paul, [1986] 1 SCR 306). These involve “relationships within Indian families and

reserve communities, matters that could be considered absolutely indispensable and essential to

their cultural survival”: Canadian Western Bank at para 61. It has similarly been suggested that

“Indianness” would include “rights so closely connected with Indian status that they should be

regarded as necessary incidents of status such for instance as registrability, membership in a band,

the right to participate in the election of Chiefs and Band Councils, reserve privileges, etc.”: Four

B Manufacturing v United Garmet Workers, [1980] 1 SCR 1031 at 1048.

[157] In the result, provincial laws of general application will apply to “Indians, and Lands

reserved for the Indians” providing they do not impair the core of Parliament’s power under

s 91(24). While legislation that singles out Indigenous people for special treatment is ultra vires

the province, legislation that merely regulates Indigenous peoples and their property as members

of the broader community is not, even if the provincial legislation has a disproportionate effect on

them: Kitkatla at paras 66-69. Indigenous peoples are citizens of the provinces in which they live

and are therefore, in their day-to-day activities, subject to provincial laws of general application.

That would include, for example, provincial laws under which a provincial authority has approved

an intra-provincial project for the development of natural resources or a roadway or electrical

power plant.

B.

Section 35 of the Constitution Act, 1982

[158] Section 35 of the Constitution Act, 1982 is not a source of jurisdiction. It does not amend

or displace the distribution of legislative powers between federal and provincial governments

under the Constitution Act, 1867. Therefore, the Crown’s duties to Indigenous peoples do not

inform a vires analysis under the division of powers.

92

A municipal bylaw regulating and imposing a fee for the removal of gravel was found within provincial jurisdiction

since it did not regulate the use of land on a reserve even though gravel was being removed from reserve lands.

93

Section 88 of the Indian Act extends the effects of valid provincial laws of general application in certain

circumstances notwithstanding that they would otherwise be inapplicable to “Indians” under the interjurisdictional

immunity doctrine.

94

The core has also been described as going to the “status and rights of Indians”: NIL/TU,O at paras 66, 70: Guy

Régimbald & Dwight Newman, The Law of the Canadian Constitution, 2nd ed (Toronto: LexisNexis, 2017) at 828.

Page: 53

[159] Section 35 recognizes and affirms “[t]he existing aboriginal and treaty rights of the

aboriginal peoples of Canada”. Its purpose is to “facilitate the ultimate reconciliation of prior

Aboriginal occupation with de facto Crown sovereignty”: Taku River Tlingit First Nation v

British Columbia (Project Assessment Director), 2004 SCC 74 at para 42, [2004] 3 SCR 550. The

assertion of Crown sovereignty gives rise to the concept of “the honour of the Crown”, and it too

has reconciliation as its purpose: Mikisew Cree First Nation v Canada (Governor General in

Council), 2018 SCC 40 at paras 21-22, [2018] 2 SCR 765 [Mikisew 2018]; Manitoba Metis

Federation Inc. v Canada (Attorney General), 2013 SCC 14 at para 66, [2013] 1 SCR 623

[Manitoba Metis Federation]. The honour of the Crown is engaged by s 35 and considered a

“constitutional principle”: Manitoba Metis Federation at para 69.⁹⁵

[160] The honour of the Crown imposes a number of obligations, one of which is the “duty to

consult and accommodate”: Haida Nation v British Columbia (Minister of Forests), 2004 SCC

73 at paras 16-38, [2004] 3 SCR 511 [Haida Nation]. This duty is not restricted to the federal

Crown; it is owed by both levels of government: Grassy Narrows First Nation v Ontario (Natural

Resources), 2014 SCC 48 at para 33, [2014] 2 SCR 447 [Grassy Narrows]; Haida Nation at paras

57-59. Where a province has the power to “take up” lands under a treaty, its right to do so is subject

to the province’s duty to consult and, if appropriate, accommodate Aboriginal interests: Grassy

Narrows at para 51.⁹⁶Taking up lands under a treaty may include, for example, settlement,

mining, lumbering, extraction of natural resources or other purposes.

[161] The constitutional guarantee of Aboriginal rights in s 35 operates as a limitation on both

federal and provincial legislative powers: Tsilhqot’in Nation v British Columbia, 2014 SCC 44

at para 142, [2014] 2 SCR 256 [Tsilhqot’in Nation]. The scope of their respective obligations is

defined by the jurisdictional limits of each level of government under the division of powers.

[162] It has long been accepted that Canada has the jurisdiction under s 91(24) to regulate and

infringe s 35 Aboriginal and treaty rights: R v Sparrow, [1990] 1 SCR 1075 at 1109 [Sparrow]. In

Tsilhqot’in Nation, the Supreme Court confirmed that the doctrine of interjurisdictional immunity

should be applied with restraint and should not be used to preclude a province from regulating and

infringing s 35 Aboriginal rights: paras 131-152. It specifically concluded that Aboriginal rights

under s 35 are not part of the “core” of s 91(24): paras 133-135, 140.⁹⁷Thus, “provincial regulation

of general application will apply to exercises of Aboriginal rights, including Aboriginal title land,

subject to the s. 35 infringement and justification framework” set out in Sparrow: para 150.

95

See also Mikisew 2018 at para 24; Southwind v Canada, 2021 SCC 28 at para 55, citing Brian Slattery, “The

Aboriginal Constitution” (2014) 67 SCLR (2d) 319 at 320.

96

“When a government — be it the federal or a provincial government — exercises Crown power, the exercise of that

power is burdened by the Crown obligations toward the Aboriginal people in question”: Grassy Narrows at para 50,

emphasis in original.

97

As the Supreme Court explained, while s 35 operates as a limit on both federal and provincial powers, it has “nothing

to do with whether something lies at the core of the federal government’s powers”: para 142.

Page: 54

[163] The same is true with respect to treaty rights. Interjurisdictional immunity does not

preclude a province which “takes up” land from justifying any infringement of a treaty right:

Grassy Narrows at para 53. While Tsilhqot’in Nation and Grassy Narrows did not abolish the

idea that s 91(24) has a “core” which protects against provincial intrusion, they did remove

Aboriginal and treaty rights from that “core”.⁹⁸The result is that interjurisdictional immunity no

longer applies to s 35 rights. As a consequence, provincial authority has been enlarged with respect

to Aboriginal and treaty rights.⁹⁹

XI. Division of Powers Framework

A.

The Two Stages in a Division of Powers Analysis

[164] Reviewing legislation for validity on federalism grounds involves a two-stage analytical

approach: (1) characterization; and (2) classification. First, the subject matter (or “pith and

substance”) of the challenged legislation must be characterized. Second, that subject matter must

be classified by reference to federal and provincial heads of power: References re Greenhouse

Gas Pollution Pricing Act SCC at para 47; Genetic Non-Discrimination at para 26; Desgagnés

Transport at para 30; Reference re Pan-Canadian Securities Regulation, 2018 SCC 48 at

para 86, [2018] 3 SCR 189 [Second Securities Reference].

[165] A statute and related regulations will be considered together for purposes of constitutional

characterization where the regulations give “concrete meaning and content to the statute and [are]

indispensable to its classification”: R v Morgentaler, [1993] 3 SCR 463 at 481 [Morgentaler],

discussing Texada Mines Ltd. v Attorney-General of British Columbia, [1960] SCR 713. As

explained in Red Chris at para 31, citing Ruth Sullivan, Sullivan on the Construction of Statutes,

5th ed (Markham, Ont.: LexisNexis, 2008) at 370, “‘[w]hen regulations are made to complete the

statutory scheme, they are clearly intended to operate together and to be mutually informing’”.¹⁰⁰

[166] The Regulations constitute an integral part of this legislative scheme. The Act provides a

statutory framework; the Regulations make that framework operative. It is the Regulations which

101

list the designated projects subject to the federal environmental impact assessment.

98

Daniels at para 51. See also HW Roger Townshend, “What Changes Did Grassy Narrows First Nation Make to

Federalism and Other Doctrines?” (2017) 95:2 Can Bar Rev 459 at 478-479.

99

According to Bruce McIvor & Kate Gunn, “Stepping into Canada’s Shoes: Tsilhqot’in, Grassy Narrows and the

Division of Powers” (2016) 67 UNBLJ 146, the result has been a “significant expansion of provincial authority to

legislate in ways that could infringe the rights of Indigenous Peoples” (160) while “narrowing federal exclusivity in

relation to Aboriginal and treaty rights” (165).

100

See also R v Campbell, [1999] 1 SCR 565 at para 26; Monsanto Canada Inc. v Ontario (Superintendent of

Financial Services), 2004 SCC 54 at para 35, [2004] 3 SCR 152.

101

The definition of “effects within federal jurisdiction” and the scope of the 7 prohibitions can also be expanded by

order of the Governor in Council: Act, s 7(1)(a)(iv), s 7(1)(e), s 7(2).

Page: 55

Accordingly, the Act and Regulations should be considered together to properly characterize and

classify the legislative scheme as a whole.

1.

Characterization of the “Matter” of the Challenged Law

[167] The first stage requires characterizing the “matter” of the challenged law by identifying its

“dominant purpose” or “dominant or most important characteristic”: Genetic Non-Discrimination

at para 29; Desgagnés Transport at para 31. It is this “pith and substance” or “true subject matter”

or “caractère véritable” that must be identified because ss 91 and 92 of the Constitution Act, 1867

provide that both levels of government are authorized to “make Laws in relation” to certain

“Matters”: Genetic Non-Discrimination at para 28; References re Greenhouse Gas Pollution

Pricing Act SCC at para 51; Second Securities Reference at para 86. The first stage has also been

colloquially described by asking the question “What’s it all about?”¹⁰²or “What in fact does the

law do and why?”¹⁰³

[168] Characterization requires looking at both the purpose of the law and its effects. In

determining the purpose, a court is entitled to consider intrinsic evidence such as the legislation’s

preamble or purposes clause and extrinsic evidence such as Hansard or minutes of parliamentary

committees: Kitkatla at para 53; Canadian Western Bank at para 27. Although Parliament’s

choice of means is not determinative of the legislation’s true subject matter, it may be relevant to

consider the legislative choice of means in defining a statute’s purpose: References re Greenhouse

Gas Pollution Pricing Act SCC at paras 53-54. Looking beyond the overarching purpose to the

means selected to achieve that purpose may give a more accurate definition of the true matter of

the legislation.

[169] The effects of the law refer to both legal effects and practical effects: Reference re

Securities Act, 2011 SCC 66 at para 64, [2011] 3 SCR 837 [First Securities Reference]; Kitkatla

at para 54. Legal effects are those which flow directly from the provisions of the statute itself,

whereas practical effects are “side” effects that flow from the application of the statute: References

re Greenhouse Gas Pollution Pricing Act SCC at para 51; Kitkatla at para 54. In particular, the

legal effects refer to “how the legislation as a whole affects the rights and liabilities of those subject

to its terms, and is determined from the terms of the legislation itself”: Morgentaler at 482.

Practical effects are “the actual or predicted results of the legislation’s operation and

administration”: Morgentaler at 486. The legal effects flow directly from the provisions of the

statute and the practical effects flow from its application. Effects must therefore include the law’s

“practical operation in the every-day world.”¹⁰⁴

102

Desgagnés Transport at para 35, citing A. S. Abel, “The Neglected Logic of 91 and 92” (1969) 19:4 UTLJ 487 at

490.

103

D.W. Mundell, “Tests for Validity of Legislation under the British North America Act: A Reply to Professor

Laskin” (1955) 33:8 Can Bar Rev 915 at 928 [Mundell], cited in Hogg at §15:5.

104

Mundell at 928.

Page: 56

[170] The pith and substance should be described as definitively as possible, capturing the law’s

essential character in terms that are “as precise as the law will allow”: References re Greenhouse

Gas Pollution Pricing Act SCC at para 52; Genetic Non-Discrimination at para 32.¹⁰⁵A precise

statement “more accurately reflects the true nature of what Parliament did and what it intended to

do”: References re Greenhouse Gas Pollution Pricing Act SCC at para 69. Precision also means

that characterization is less likely to be influenced by classification: Genetic Non-Discrimination

at para 31.

[171] The corollary of characterizing legislation according to its “pith and substance” is that

“incidental effects” outside the jurisdiction of the legislature that enacted it are irrelevant to the

law’s validity: Canadian Western Bank at para 28. As stated in Rogers Communications Inc. v

Châteauguay (City), 2016 SCC 23 at para 37, [2016] 1 SCR 467 [Rogers Communications],

“[t]he fact that a measure has what are merely incidental effects on an exclusive head of power of

the other level of government does not suffice to justify declaring that measure to be ultra vires”.

Effects are merely “incidental” when they are “collateral and secondary to the mandate of the

enacting legislature” even if of “significant practical importance”: Canadian Western Bank at

para 28.

2.

Classification Under Head of Power

[172] The second stage requires the court to assign the “matter” to one of the heads of legislative

power: Hogg at §15:4. This is also sometimes referred to as determining the “class(es) of subjects”

into which the matter falls: Desgagnés Transport at para 38; Quebec (Attorney General) v

Canada (Attorney General), 2015 SCC 14 at para 29, [2015] 1 SCR 693 [Quebec (Attorney

General)]. But since not all powers are limited to a class of subjects, the court’s task is more

accurately described as determining “whether the subject matter of the challenged legislation falls

within the head of power being relied on to support the legislation’s validity”: Second Securities

Reference at para 86. In the present case, the impugned legislation will be valid if, as Canada

argues, its subject matter falls within federal heads of power under s 91 and s 132 of the

Constitution Act, 1867. Conversely, it will be ultra vires Parliament and thus invalid if, as Alberta

argues, the subject matter improperly intrudes into provincial heads of power set out in s 92 and

s 92A(1) of the Constitution Act, 1867.

B.

Importance of Keeping the Two Stages Separate

[173] Characterization of the law and its classification are distinct steps, meaning that “the pith

and substance of a statute or a provision must be identified without regard to the heads of

legislative competence”: References re Greenhouse Gas Pollution Pricing Act SCC at para 56.

105

A vague or general description can result in the law being superficially assigned to both federal and provincial

heads of powers or exaggerate the extent to which the law extends into the other level of government’s sphere of

jurisdiction: References re Greenhouse Gas Pollution Pricing Act SCC at para 52; Genetic Non-Discrimination at

para 32; Desgagnés Transport at para 35.

Page: 57

Otherwise there is “a danger that the whole exercise will become blurred and overly oriented

towards results”: Chatterjee v Ontario (Attorney General), 2009 SCC 19 at para 16, [2009] 1 SCR

624.¹⁰⁶Classification sometimes requires interpreting the scope of the claimed head of power as,

for example, in the case of “Trade and Commerce” under s 91(2) or “Criminal Law” under

s 91(27): Desgagnés Transport at paras 39-41; First Securities Reference at para 65; Quebec

(Attorney General) at para 32.

C.

The Pith and Substance Doctrine and the Environment

[174] The pith and substance doctrine remains the primary analytical tool for resolving division

of powers disputes: Canadian Western Bank at paras 25-26; Firearms Reference at para 16;

Kitkatla at para 52; Desgagnés Transport at para 121, per Wagner CJ and Brown J concurring.

That is so even where the environment is involved.

[175] The environment covers everything in life, from what we do, to how we live, to the values

we hold dear, to ensuring the safety of the planet, to mitigating the effects of climate change for

which humans are responsible, to concerns about future generations, to how we organize our

economies, to sustainable development, to the ethical treatment of animals and more. But as vital

as the environment is to all forms of life on this planet, it is not, for constitutional purposes, a

superordinate subject matter that transcends or trumps the division of powers.

[176] As explained, some “aspects” of the environmental effects of an intra-provincial designated

project may be within provincial jurisdiction, others federal. In this context, “aspect” means legal

aspect, as in the legal aspect of facts, the facts being the environmental effects of the intra-

provincial designated project. However, simply because both government levels have legislative

authority over different legal aspects of those effects does not mean that regulation of the intra-

provincial designated project overall is a true matter of double aspect and thus subject to the double

aspect doctrine.

[177] The double aspect doctrine recognizes that “the same fact situations can be regulated from

different perspectives, one of which may relate to a provincial power and the other to a federal

power”: Desgagnés Transport at para 84. Under this doctrine, both levels of government are able

to legislate with respect to the same fact situation using different heads of power. Hogg notes at

§15:7 that the double aspect doctrine may more properly be described as the “double matter”

doctrine.

[178] But Parliament has no head of power entitling it to regulate intra-provincial designated

projects, or their environmental effects, generally. And since the environment is not a head of

power, such regulation cannot be based on the environment alone. Neither the environment, nor

environmental regulation, is an independent subject matter of jurisdiction for either government

106

A “matter” may be described using “the very language of a class of subject”. Where that occurs, the identification

of the “matter” will effectively settle the issue of the law’s validity, classification being a formality: Hogg at §15:5.

Page: 58

level.¹⁰⁷As a diffuse subject, the environment cuts across several different areas of constitutional

responsibility, some provincial, some federal. For both government levels, legislation relating to

the environment or environmental protection must be tied to a specific head of power under the

Constitution. In other words, the legislation must actually fall within the specific characteristics of

the head of power under which it is claimed to be justified: Hydro-Québec at paras 112, 114.

[179] Therefore, where an activity, such as an intra-provincial designated project, is otherwise

within exclusive provincial jurisdiction, Parliament’s jurisdiction is limited to the environmental

effects of that activity on a federal head of power.¹⁰⁸Accordingly, the fact one aspect of the

environmental effects of an intra-provincial designated project, the fisheries aspect for example,

falls within federal jurisdiction does not give Parliament the jurisdiction to regulate the intra-

provincial designated project itself from beginning to end.¹⁰⁹If it did, that would be a back door

route to the federal government’s securing what amounts to exclusive jurisdiction over the

environment and all intra-provincial activities. That is because where a conflict arises between

federal laws and provincial laws, under the doctrine of paramountcy, the federal law would prevail.

[180] Were that to happen, the only way for the courts to preserve any vestige of provincial

jurisdiction would be through the doctrine of interjurisdictional immunity. That would invariably

turn division of powers disputes between the federal and provincial governments from an analysis

of the pith and substance of challenged laws into a dispute about interjurisdictional immunity and

its boundaries for every head of provincial power.¹¹⁰The preferable approach is for the courts to

reaffirm the validity and utility of the pith and substance doctrine which has been the constitutional

foundation for resolution of division of powers disputes for more than 120 years: Union Colliery

Co. of British Columbia v Bryden, [1899] AC 580 (PC).¹¹¹That includes recognizing when the

double aspect doctrine properly applies – and to what – and when it does not.

D.

The POGG Power

107

“Environmental regulation is not an ‘independent’ matter of jurisdiction but rather is a function of the exercise of

particular heads of power”: Kennett at 186.

108

Within a head of power means that the government has the power to enact laws coming within that head of power.

109

As noted in Moses SCC at para 36: “The mining of non-renewable mineral resources aspect falls within provincial

jurisdiction but the fisheries aspect is federal”.

110

We recognize that the doctrine of interjurisdictional immunity, which protects the exclusivity principle under the

division of powers, may be viewed as subsumed in the pith and substance doctrine itself rather than independent of it.

As noted in Desgagnés Transport at para 161, per Wagner CJ and Brown J (concurring), “the idea underlying the

doctrine of interjurisdictional immunity is better understood not as an independent doctrine, but as a function of the

pith and substance test, properly understood and applied”.

111

As the Supreme Court explained in Canada (Attorney General) v PHS Community Services Society, 2011 SCC

44 at para 65, [2011] 3 SCR 134 [Insite] in seeking to narrow the reach of interjurisdictional immunity: “... in areas

of overlapping jurisdiction, the modern trend is to strike a balance between the federal and provincial governments,

through the application of pith and substance analysis and a restrained application of federal paramountcy.”

Page: 59

[181] Section 91 of the Constitution Act, 1867 confers on the federal Parliament the power “to

make Laws for the Peace, Order, and good Government of Canada, in relation to all Matters not

coming within the Classes of Subjects by this Act assigned exclusively to the Legislatures of the

Provinces....” Parliament’s POGG power is residuary as it is expressly confined to matters not

coming within the classes of subjects assigned exclusively to the provinces. The POGG power

includes different branches. One is the “national concern” branch.

[182] That branch was recently restated by the majority of the Supreme Court in References re

Greenhouse Gas Pollution Pricing Act SCC in assessing the constitutionality of the Greenhouse

Gas Pollution Pricing Act, SC 2018, c 12, s 186 [GGPPA]. The federal statute established both a

fuel charge on various types of carbon-based fuel and a pricing mechanism for greenhouse gas

(GHG) emissions of certain industrial facilities in provinces determined to lack sufficiently

stringent standards. A number of provinces challenged Parliament’s authority to pass the

legislation which Canada sought to justify solely on the basis of the “national concern” doctrine.

[183] The majority of the Supreme Court characterized the “pith and substance” of the GGPPA

as “establishing minimum national standards of GHG price stringency to reduce GHG emissions”:

References re Greenhouse Gas Pollution Pricing Act SCC at paras 57, 80. It then applied this

same characterization of the matter of the statute to its analysis of the proposed “matter” of

“national concern” (paras 114, 119). The majority ultimately held that the GGPPA was intra vires

Parliament on the basis of the “national concern” doctrine, concluding that establishing minimum

national standards of GHG price stringency to reduce GHG emissions was a matter of national

concern (para 207).

[184] Prior to that decision, the leading articulation of the national concern doctrine was a four-

part test set out by Le Dain J in R v Crown Zellerbach Canada Ltd., [1988] 1 SCR 401 at 431-32

[Crown Zellerbach].¹¹²The majority in References re Greenhouse Gas Pollution Pricing Act

SCC emphasized that “the test for finding that a matter is of national concern is an exacting one”

(para 208) and that courts “must approach a finding that the federal government has jurisdiction

on the basis of the national concern doctrine with great caution” (para 142). The majority restated

the four-part test from Crown Zellerbach as a three-part test at paras 163-166:

112

“1. The national concern doctrine is separate and distinct from the national emergency doctrine of the peace, order

and good government power, which is chiefly distinguishable by the fact that it provides a constitutional basis for

what is necessarily legislation of a temporary nature; 2. The national concern doctrine applies to both new matters

which did not exist at Confederation and to matters which, although originally matters of a local or private nature in

a province, have since, in the absence of national emergency, become matters of national concern; 3. For a matter to

qualify as a matter of national concern in either sense it must have a singleness, distinctiveness and indivisibility that

clearly distinguishes it from matters of provincial concern and a scale of impact on provincial jurisdiction that is

reconcilable with the fundamental distribution of legislative power under the Constitution; 4. In determining whether

a matter has attained the required degree of singleness, distinctiveness and indivisibility that clearly distinguishes it

from matters of provincial concern it is relevant to consider what would be the effect on extra-provincial interests of

a provincial failure to deal effectively with the control or regulation of the intra-provincial aspects of the matter.”

Page: 60

First, Canada must establish that the matter is of sufficient concern

to the country as a whole to warrant consideration as a possible

matter of national concern. This question arises in every case,

regardless of whether the matter can be characterized as historically

new. If Canada discharges its burden at the step of this threshold

inquiry, the analysis will proceed.

Second, the court must undertake the analysis explained in Crown

Zellerbach through the language of “singleness, distinctiveness and

indivisibility”. More important than this terminology, however, are

the principles underpinning the inquiry. The first of these principles

is that, to prevent federal overreach, jurisdiction based on the

national concern doctrine should be found to exist only over a

specific and identifiable matter that is qualitatively different from

matters of provincial concern. The second principle to be considered

at this stage of the inquiry is that federal jurisdiction should be found

to exist only where the evidence establishes provincial inability to

deal with the matter.

If these two principles are satisfied, the court will proceed to the

third and final step and determine whether the scale of impact of the

proposed matter of national concern is reconcilable with the division

of powers.

The onus is on Canada throughout this analysis, and evidence is

required. Where a proposed federal matter satisfies the requirements

of all three steps of the framework, there is a principled basis to

conclude that the matter is one that, by its nature, transcends the

provinces and should be recognized as a matter of national concern.

[185] Importantly, the majority in References re Greenhouse Gas Pollution Pricing Act SCC

did not expand the breadth of “national concern” any further than carbon pricing. In particular, it

did not broaden Parliament’s authority to include the regulation of GHG emissions generally.

Accordingly, Parliament’s jurisdiction under the “national concern” doctrine in relation to GHG

emissions extends only to establishing minimum national standards of GHG price stringency to

reduce GHG emissions, a point to which we return later.

E.

Cooperative Federalism and Caution

[186] The courts adopted cooperative federalism as a means of accommodating overlapping

jurisdiction and encouraging intergovernmental cooperation: References re Greenhouse Gas

Pollution Pricing Act SCC at para 50; Genetic Non-Discrimination at para 22; First Securities

Reference at para 57. It has been described as the “dominant tide” of modern federalism, which

Page: 61

“finds its principled underpinning in the concern that a court should favour, where possible, the

ordinary operation of statutes enacted by both levels of government”: Canadian Western Bank at

para 37, emphasis in original; see also Rogers Communications at para 38; Second Securities

Reference at para 17.¹¹³

[187] However, cooperative federalism has its limits. It supports, but does not supplant, or

modify, the division of powers: Second Securities Reference at para 18; References re

Greenhouse Gas Pollution Pricing Act SCC at para 50. “The ‘dominant tide’ of flexible

federalism, however strong its pull may be, cannot sweep designated powers out to sea, nor erode

the constitutional balance inherent in the Canadian federal state”: First Securities Reference at

para 62. Cooperative federalism cannot be used to make an otherwise unconstitutional law a valid

one: Rogers Communications at para 39; Second Securities Reference at para 18. Nor to impose

limits on the otherwise valid exercise of legislative competence: Quebec (Attorney General) at

para 19; Rogers Communications at para 39; Second Securities Reference at para 18. Nor to

mandate cooperation where the division of powers authorizes one level of government to act

unilaterally: Quebec (Attorney General) at para 20; Genetic Non-Discrimination at para 25.

[188] Further, where the two orders of government are at odds, reliance on cooperative

federalism risks eroding the boundaries of provincial jurisdiction by favouring the federal

government and centralization of authority: Eugenie Brouillet, “The Supreme Court of Canada:

The Concept of Cooperative Federalism and Its Effect on the Balance of Power” in Nicholas

Aroney & John Kincaid eds, Courts in Federal Countries: Federalists or Unitarists? (Toronto:

University of Toronto Press, 2017) 135 at 156-159, 163; see also Asher Honickman, “Watertight

Compartments: Getting Back to the Constitutional Division of Powers” (2017) 55:1 Alta L Rev

225 at 250-251 [Honickman].¹¹⁴

[189] To be effective, cooperative federalism must be grounded in mutual respect for the

constitutional dividing lines and the recognition, and acceptance, by each government level of its

own jurisdictional limitations. The concept is cooperative, not coercive, federalism.

XII. The First Stage: Characterization – What is the “Matter” of the IAA?

A.

1.

Introduction

The IAA – Two Acts in One

113

Courts will not generally interfere with cooperative regulatory schemes so long as they are compatible with the

bounds of the Constitution: Second Securities Reference at para 18.

114

To put it the way that Honickman has at 246, 250-251: “The concept of flexible federalism is more than simply

extra-textual; it is contra-textual. It does not sit uncomfortably or even awkwardly with the text; it sits entirely apart....

[I]t is at least arguable that unfettered discretion serves as a disincentive for cooperation and is much more likely to

produce federal domination by way of the paramountcy doctrine” (emphasis in original).

Page: 62

[190] The IAA is essentially two acts in one. One act, as reflected in ss 81 to 91 of the Act, covers

activities within exclusive federal jurisdiction on federal lands or outside Canada that have not

been designated as “designated projects” by the federal executive.¹¹⁵These activities are subject

to an entirely different impact assessment and regulatory regime than that which applies to

“designated projects”. No one has challenged ss 81 to 91. The second act, as reflected in the

balance of this legislative scheme, covers all activities designated as “designated projects” by the

federal executive.

[191] Including in this legislative scheme two distinct regimes, one of which is constitutionally

intra vires, does not enhance the constitutionality of the other. Further, with respect to the second

act, the environmental assessment of federal designated projects versus intra-provincial designated

projects is manifestly distinct in ordinary legal and factual terms, let alone constitutional terms.

B.

1.

Purpose of the Legislative Scheme

Intrinsic Evidence of Purpose

a.

Title

[192] A law’s title, especially its long title, is an important form of intrinsic evidence since both

titles are an integral part of the law: Ruth Sullivan, Sullivan on the Construction of Statutes, 6th ed

(Markham, Ont.: LexisNexis Canada, 2014) at §14.13-§14.15. However, while a statute’s title can

be a useful tool for the purposes of characterizing its true subject matter, it is not determinative:

References re Greenhouse Gas Pollution Pricing Act SCC at para 58.

[193] The full name of the Act is “An Act respecting a federal process for impact assessment and

the prevention of significant adverse environmental effects”. This reflects one of the focusses of

the Act, namely the establishment of a federal impact assessment process.¹¹⁶The other key one,

as evidenced by the substantive decision-making elements under the Act, is the establishment of a

federal regulatory regime for all designated projects. Further, although the title refers to the

115

Federal lands is defined in s 2 as “(a) lands that belong to Her Majesty in right of Canada, or that Her Majesty in

right of Canada has the power to dispose of, and all waters on and airspace above those lands, other than lands under

the administration and control of the Commissioner of Yukon, the Northwest Territories or Nunavut; (b) the following

lands and areas: (i) the internal waters of Canada, in any area of the sea not within a province, (ii) the territorial sea of

Canada, in any area of the sea not within a province, (iii) the exclusive economic zone of Canada, and (iv) the

continental shelf of Canada; and (c) reserves, surrendered lands and any other lands that are set apart for the use and

benefit of a band and that are subject to the Indian Act, and all waters on and airspace above those reserves or lands.

(territoire domanial)”

116

Canada describes the review process as a “federal environmental assessment process to protect against adverse

environmental effects”. Alberta describes it as a “comprehensive impact assessment regime” requiring “a broad

ranging assessment of ... impacts, environmental and other”. Given the breadth of the assessment of the “effects” and

“factors” contemplated under this legislative scheme, it is more accurate to describe the review as an “impact

assessment” rather than the more restrictive “environmental assessment”. That is also how it is described in the Act

itself.

Page: 63

“prevention of significant adverse environmental effects”, as we explain later, the Act is not limited

to preventing significant adverse environmental effects. Nor is it limited, when applied to intra-

provincial designated projects, to preventing adverse effects within Parliament’s jurisdiction.

b.

Preamble

[194] Legislative bodies cannot through statutory recitals settle the classification of their own

statutes for purposes of the division of powers: W. R. Lederman, Continuing Canadian

Constitutional Dilemma: Essays on the Constitutional History, Public Law and Federal System of

Canada (Toronto: Butterworths, 1981) at 282. However, while the preamble of a statute is not

conclusive, it can nevertheless be useful “to illustrate the ‘mischief’ the legislation is designed to

cure and the goals Parliament sought to achieve”: References re Greenhouse Gas Pollution

Pricing Act SCC at para 59. Similarly, the preamble of the Bill enacting the challenged statute can

also be helpful.

[195] The Act was enacted as part of Bill C-69. The preamble to Bill C-69 states:

Whereas the Government of Canada is committed to implementing

an impact assessment and regulatory system that Canadians trust

and that provides safeguards to protect the environment and the

health and safety of Canadians;

Whereas the Government of Canada is committed to enhancing

Canada’s global competitiveness by building a system that enables

decisions to be made in a predictable and timely manner, providing

certainty to investors and stakeholders, driving innovation and

enabling the carrying out of sound projects that create jobs for

Canadians;

Whereas the Government of Canada is committed to achieving

reconciliation with First Nations, the Métis and the Inuit through

renewed nation-to-nation, government-to-government and Inuit-

Crown relationships based on recognition of rights, respect, co-

operation and partnership;

Whereas the Government of Canada is committed to using

transparent processes that are built on early engagement and

inclusive participation and under which the best available scientific

information and data and the Indigenous knowledge of the

Indigenous peoples of Canada are taken into account in decision-

making;

Page: 64

And whereas the Government of Canada is committed to assessing

how groups of women, men and gender-diverse people may

experience policies, programs and projects and to taking actions that

contribute to an inclusive and democratic society and allow all

Canadians to participate fully in all spheres of their lives;

[196] The first item in the preamble to Bill C-69 refers to implementing “an impact assessment

and regulatory system” and protecting “the environment and health and safety of Canadians”. The

remaining items recite Canada’s commitment to a wide range of other federal priorities, such as

“enhancing global competitiveness”, “driving innovation”, creating “jobs”, “achieving

reconciliation” and contributing to an “inclusive” society for women, men and gender-diverse

people.

[197] The preamble of the Act itself also confirms that designated projects are to be assessed

based on a similarly wide range of federal priorities.¹¹⁷It affirms Canada’s commitment to

“fostering sustainability”, “ensuring respect for the rights of Indigenous peoples”, “fostering

reconciliation”, and “implementing the United Nations Declaration on the Rights of Indigenous

Peoples”. It also affirms that “impact assessment contributes to Canada’s ability to meet its

environmental obligations and its commitments in respect of climate change” and it speaks of

encouraging innovation to reduce adverse changes “to the environment and to health, social or

economic conditions”.

[198] Not only do such broad-ranging objectives in the preambles to both Bill-69 and the Act

extend well beyond preventing significant adverse environmental effects, but, when applied to

intra-provincial designated projects, many are not even linked to a federal head of power. Further,

the preamble to the Act also recognizes that the Act extends beyond impact assessment and includes

“decision-making processes related to designated projects”.

c.

Statutory Purposes of the Act

117

The Act’s preamble includes the following: “Whereas the Government of Canada is committed to fostering

sustainability; Whereas the Government of Canada recognizes that impact assessments provide an effective means of

integrating scientific information and Indigenous knowledge into decision-making processes related to designated

projects; ... Whereas the Government of Canada is committed, in the course of exercising its powers and performing

its duties and functions in relation to impact, regional and strategic assessments, to ensuring respect for the rights of

the Indigenous peoples of Canada recognized and affirmed by section 35 of the Constitution Act, 1982, and to fostering

reconciliation and working in partnership with them; Whereas the Government of Canada is committed to

implementing the United Nations Declaration on the Rights of Indigenous Peoples; ... Whereas the Government of

Canada recognizes that impact assessment contributes to Canada’s ability to meet its environmental obligations and

its commitments in respect of climate change; Whereas the Government of Canada recognizes the importance of

encouraging innovative approaches and technologies to reduce adverse changes to the environment and to health,

social or economic conditions.”

Page: 65

[199] While a statement of legislative intent is often a useful tool, courts “must nevertheless seek

to ascertain the true purpose of the legislation, as opposed to its mere stated or apparent purpose”:

Canadian Western Bank at para 27, emphasis in original.

[200] The stated purposes of the Act set out in s 6(1) include “to ensure that impact assessments

of designated projects take into account all effects — both positive and adverse — that may be

caused by the carrying out of designated projects”: Act, s 6(1)(c). This expressly contemplates that

the impact assessment will consider all effects, which includes “changes to the environment or to

health, social or economic conditions and the positive and negative consequences of these

changes”, that may be caused by a designated project: Act, s 2. The rest of the purpose clause in

s 6(1) focuses on other expansive federal considerations. The drift away from preventing

significant adverse environmental effects when applied to intra-provincial designed projects is

both manifest and extensive: enhancing “Canada’s competitiveness”, encouraging “innovation in

the carrying out of designated projects”, creating “opportunities for sustainable economic

development”, and encouraging “the assessment of the cumulative effects of physical activities in

a region”.

[201] The stated purpose to consider all effects that may be caused by a designated project is

echoed in the s 22 mandatory factors. These include “the changes to the environment or to health,

social or economic conditions and the positive and negative consequences of these changes...”:

Act, s 22(1)(a). The balance of the s 22 mandatory factors focus on federal objectives and priorities,

a number of which extend well beyond significant adverse environmental effects, and again, which

are not, when applied to intra-provincial designated projects, all linked to federal heads of power.

2.

Extrinsic Evidence of Purpose

[202] While statements made during parliamentary debate are to be viewed with caution, a

statute’s legislative history, including legislative debates, can nonetheless be helpful in discerning

Parliament’s purpose: References re Greenhouse Gas Pollution Pricing Act SCC at paras 62-68.

[203] The legislative debates on Bill C-69 confirm the intended breadth of the IAA. Before the

Standing Committee on Environment and Sustainable Development, the Minister of Environment

stated that “assessments will consider not just environmental impacts of projects, but also the

social, health and economic impacts they may cause”.¹¹⁸This theme was repeated throughout the

debate on Bill C-69 including the Minister’s introductory remarks on third reading where she said

the Bill provided for “project reviews that consider a wide range of positive and negative impacts

on the economy, health, indigenous rights, and communities, in addition to the environment ....”¹¹⁹

118

House of Commons, Standing Committee on Environment and Sustainable Development, Evidence, 42-1, No 099

(22 March 2018) at 2 (Hon Catherine McKenna).

119

“Bill C-69 An Act to enact the Impact Assessment Act and the Canadian Energy Regulatory Act, to amend the

Navigation Protection Act and to make consequential amendments to other Acts”, 3^rdreading, House of Commons

Debates, 42-1, No 313 (12 June 2018) at 20775 (Hon Catherine McKenna).

Page: 66

[204] The legislative debates also reveal that one of the objectives of the legislative scheme is to

give the federal executive regulatory control over GHG emissions from whatever intra-provincial

projects it chooses to include in the project list. Speaking before the Standing Committee on

Environment and Sustainable Development, the Minister of the Environment confirmed that the

criteria for creating the project list should include “an environmental threshold, including

greenhouse gas emissions”. ¹²⁰At second reading in the House of Commons, the Minister

confirmed the importance of this federal government priority: “Under Bill C-69, it is clear that we

will consider the impact projects will have on the climate. We also said that we wanted to conduct

a strategic environmental assessment to ensure that the projects fit with the climate change action

plan.”¹²¹Later, when the Minister was asked about the addition of in situ projects to the project

list, she acknowledged that the federal government’s proposed approach to in situ oil sand projects

was based on “a cap on emissions”.¹²²

3.

Conclusions Relating to Purpose of the IAA

[205] Together, the intrinsic and extrinsic evidence demonstrate that the purpose of the IAA is to

establish a federal impact assessment and regulatory regime to review and regulate all effects of

both federal designated projects and intra-provincial designated projects even though intra-

provincial designated projects otherwise fall within exclusive provincial jurisdiction and even

though all effects of intra-provincial designated projects, including GHG emissions therefrom, are

not within federal heads of power.

C.

1.

Effects of the IAA

Introduction

[206] Attentively considered, the effects of the IAA, and here we are speaking of a legal term of

art, reinforce its dominant purpose.¹²³“The effects of a law are perhaps a more reliable guide to

its constitutional validity than its apparent or stated intention. These effects may be legal ones such

as effects on the rights or obligations of citizens; or practical ones, especially where there is reason

to believe the enacting government may be attempting to do indirectly what it cannot do directly”:

120

House of Commons, Standing Committee on Environment and Sustainable Development, Evidence, 42-1, No 099

(22 March 2018) at 16 (Hon Catherine McKenna).

121

“Bill C-69 An Act to enact the Impact Assessment Act and the Canadian Energy Regulatory Act, to amend the

Navigation Protection Act and to make consequential amendments to other Acts”, 2^ndreading, House of Commons

Debates, 42-1, No 264 (14 February 2018) at 17204 (Hon Catherine McKenna).

122

The Senate, Standing Senate Committee on Energy, the Environment and Natural Resources, Evidence, 42-1, No

68 (2 May 2019) (Hon Catherine McKenna).

123

Legal and practical “effects” of the IAA at law are different than the defined “effects” of a designated project under

the IAA.

Page: 67

Reference re Environmental Management Act (British Columbia), 2019 BCCA 181 at para 14,

emphasis in original [Environmental Management Act BCCA], aff’d 2020 SCC 1.

[207] For an intra-provincial activity or class of activities to be designated as a “designated

project” has serious negative consequences that flow immediately upon designation. The IAA

triggers federal review of the “effects” of intra-provincial designated projects even where the

federal government has no decision-making authority with respect to an intra-provincial

designated project under other valid federal legislation. Further, Parliament has not limited the

regulation of intra-provincial designated projects to effects actually within federal jurisdiction.

And even where there are such effects, the regulation is not limited, as required under the division

of powers, to the consequences, that is effects, of the subject project on a federal head of power.

[208] Instead, this regulatory regime mandates federal review of all effects of intra-provincial

designated projects with no requirement that there be any established nexus with a federal head of

power. Put simply, Parliament has authorized the federal executive to regulate all intra-provincial

designated projects from inception to completion.

[209] That this is so may be seen from an analysis of the legal and practical effects of the IAA.¹²⁴

2.

Legal Effects of the IAA

a.

Designation and Public Interest Determination vis à vis Intra-Provincial

Designated Projects Are Not Linked to Federal Decision-Making Authority

(i)

Scope of the IAA and Designation of Designated Projects

[210] The intra-provincial activities swept into this assessment and regulatory regime are not

limited to those likely to have adverse environmental effects on a matter within federal

competence.

[211] The designated projects approach is a fundamental change from the Guidelines Order

upheld as constitutional in Oldman River. There the federal environmental review process was

triggered by the existence of a federal regulatory duty with respect to a project.¹²⁵CEAA 1992

retained a similar trigger, though one broader in scope. An intra-provincial project was required to

undergo an environmental assessment only where the federal government issued a listed permit or

124

While characterization and classification are distinct stages of a division of powers analysis, in assessing the IAA’s

legal effects, it may be necessary, given the self-defined “effects within federal jurisdiction”, to refer to the scope of

certain federal heads of power in placing those legal effects in their proper context.

125

The Guidelines Order required “all federal departments and agencies that have a decision-making authority for

any proposal, i.e., any initiative, undertaking or activity that may have an environmental effect on an area of federal

responsibility, to initially screen such proposal to determine whether it may give rise to any potentially adverse

environmental effects”: Oldman River at 17. A review by an environmental assessment panel was required if the

proposal could have significant adverse effects.

Page: 68

authorization for that project: CEAA 1992, s 5(1).¹²⁶In other words, overall, the trigger under

CEAA 1992 can be understood as projects requiring a federal decision: Meinhard Doelle & Chris

Tollefson, Environmental Law: Cases and Materials, 3rd ed (Toronto: Thomson Reuters, 2019)

at 598-99.

[212] CEAA 2012 changed the trigger for an environmental assessment by introducing the

concept of a “project list”.¹²⁷But not all listed projects required an assessment under CEAA

2012.¹²⁸If a provincial assessment was considered equivalent, that process was followed. The Act

is similarly “project-based” in that it uses a project list approach, rather than the existence of a

federal decision-making responsibility, to trigger federal assessments.¹²⁹However, as explained,

from a division of powers perspective, the IAA is fundamentally different in scope than CEAA

2012. Nor was the constitutionality of that legislation ever challenged by a province.¹³⁰

[213] The project list under the Regulations includes activities based on size, whether physical

size or production output size. For example, a new all-season public highway that requires more

than 75 km of new right of way (s 51) is included even though wholly within one province and

within provincial jurisdiction as a local work or undertaking: Constitution Act, 1867, s 92(10).

While the highway would, if it crossed a provincial boundary, be within federal jurisdiction as an

interprovincial undertaking under s 92(10)(a), the Regulations make no distinction between

highways in these two constitutionally distinct categories.

[214] In addition, the federal government has added to the project list new project types otherwise

within exclusive provincial jurisdiction and not previously subject to, or claimed to be subject to,

a federal environmental assessment. That includes in situ oil sands extraction facilities with a

bitumen production over a certain capacity which do not otherwise require a federal permit.

126

An environmental assessment was also required when the project was within exclusive federal jurisdiction, that is

where the federal government proposed a project, provided financial assistance to a project, or where the project

involved federal lands.

127

Only projects listed by regulation or Ministerial order required an environmental assessment: see CEAA 2012, ss 2,

14(2), 84(a); Regulations Designating Physical Activities.

128

The Agency made a separate “screening decision” to decide if an environmental assessment of the project was

required: CEAA 2012, s 10.

129

See Northey 2020 at 19. Like CEAA 2012, the Act also includes a “screening decision” in s 16 to “decide whether

an impact assessment of the designated project is required”. But this screening is lengthier since designated projects

must also now undergo a newly added “planning phase” before the screening decision is undertaken: ibid at 20.

130

One author noted the constitutional issues this raised. According to Northey at 245, “[S]ubsection 5(1) [of CEAA

2012] raises constitutional issues because it triggers some federal review of environmental effects, even where there

is no federal regulatory decision-making. This approach appears to be inconsistent with Oldman. Oldman made it a

principle of federal EA that its triggers needed to be tied to federal regulatory decision-making” (underline in original).

Page: 69

[215] The Act even gives the federal government the right to designate a project after the physical

activity has commenced, unless the project “has substantially begun”: Act, s 9(7)(a).¹³¹As a result,

an intra-provincial designated project can be required to undergo the assessment and review

process under the IAA after the project has completed a full environmental review, and been

approved, by applicable provincial authorities, and after work on it has commenced, so long as the

project has not substantially begun.

[216] Canada contends that the purposes of the Act constrain the Governor in Council’s

“regulation-making power to list designated projects to those likely to have adverse federal

effects”: Factum of the Attorney General of Canada at para 80.¹³²However, the only limitations

in the Act governing the exercise of the federal executive’s regulation-making power to designate

projects are contained in ss 6(2) and 6(3):

6(2) The Government of Canada, the Minister, the Agency and

federal authorities, in the administration of this Act, must exercise

their powers in a manner that fosters sustainability, respects the

Government’s commitments with respect to the rights of the

Indigenous peoples of Canada and applies the precautionary

principle.

6(3) The Government of Canada, the Minister, the Agency and

federal authorities must, in the administration of this Act, exercise

their powers in a manner that adheres to the principles of scientific

integrity, honesty, objectivity, thoroughness and accuracy.

[217] These sections provide no direction and prescribe no criteria as to the nature of the intra-

provincial activities that the federal executive can include as designated projects. Notably, the IAA

contains no enforceable restriction limiting designation to those “likely to have significant adverse

federal effects” or even “likely to have adverse federal effects”. Regulations made under a statute

must be consistent with the enabling statute and its overriding purpose and within the scope of,

and subject to, the conditions prescribed by that statute: References re Greenhouse Gas Pollution

Pricing Act SCC at para 87. However, that limitation does not meaningfully limit the federal

executive’s actions under this legislative scheme since its power to designate intra-provincial

activities is essentially unconstrained given the Act’s stated purposes.

131

CEAA 2012 precluded the Minister from making the designation after the “activity has begun and, as a result, the

environment has been altered”: s 14(5)(a).

132

Canada also points to the RIAS which states that the objective of the project list is to “capture those major projects

with the greatest potential for adverse effects in areas of federal jurisdiction related to the environment, so that they

can enter into the impact assessment process”: Regulatory Impact Analysis Statement, (2019) C Gaz II, Vol 153, No

17, (Physical Activities Regulations, SOR/2019-285), online: <http://www.gazette.gc.ca/rp-pr/p2/2019/2019-08-

21/html/sor-dors285-eng.html>[RIAS].

Page: 70

[218] In any event, the current project list speaks for itself. It confirms that the federal executive

has been empowered to designate – and has – whatever intra-provincial activities it unilaterally

decides to include in the project list. However, the federal government does not have a free-

standing right to require an environmental assessment of every intra-provincial activity in this

country that it wishes. It must have some valid decision-making authority over the activity itself

apart from the environmental assessment.¹³³

(ii)

Need for Federal Decision-Making Authority Linked to Federal Head of

Power

[219] In Oldman River at 47, La Forest J recognized the significance of, and rationale for, the

existence of an affirmative regulatory duty to trigger the federal environmental review process:¹³⁴

That is not to say that the Guidelines Order is engaged every time a

project may have an environmental effect on an area of federal

jurisdiction. There must first be a “proposal” which requires an

“initiative, undertaking or activity for which the Government of

Canada has a decision making responsibility”.... In my view the

proper construction to be placed on the term “responsibility” is that

the federal government, having entered the field in a subject matter

assigned to it under s 91 of the Constitution Act, 1867, must have an

affirmative regulatory duty pursuant to an Act of Parliament which

relates to the proposed initiative, undertaking or activity. It cannot

have been intended that the Guidelines Order would be invoked

every time there is some potential environmental effect on a matter

of federal jurisdiction.¹³⁵[Underline in original; italics added]

[220] Thus, Oldman River has been described as making it “a principle of federal [environmental

assessment] that its triggers needed to be tied to federal regulatory decision-making” and that while

federal assessment is “constitutionally justified in a stand-alone way as an information gathering

133

Even then, the environmental effects to be studied may be limited to those which may have an impact on the areas

of federal responsibility affected, a point to which we return later.

134

The project in Oldman River, a dam, was said to trigger the Guidelines Order because the Navigable Waters

Protection Act placed an affirmative regulatory duty on the Minister of Transport whose approval was required for

any work substantially interfering with navigation. The Minister of Transport had granted the approval, subject to

conditions, without subjecting the application to an assessment under the Guidelines Order.

135

La Forest J added at 48: “In my view the Navigable Waters Protection Act does place an affirmative regulatory

duty on the Minister of Transport. Under that Act there is a legislatively entrenched regulatory scheme in place in

which the approval of the Minister is required before any work that substantially interferes with navigation may be

placed in, upon, over or under, through or across any navigable water” (emphasis added).

Page: 71

process”, it otherwise needed to relate to “specific headings of federal constitutional authority that

had existing legislative and regulatory controls”.¹³⁶

[221] In Moses c Canada (Procureur général), 2008 QCCA 741 [Moses CA] (varied on other

grounds in Moses SCC), the Quebec Court of Appeal addressed what could appropriately trigger

a federal environmental assessment, in that case under CEAA 1992. Quebec had argued that no

environmental review was required for a fish permit under CEAA 1992; Canada contended that

CEAA 1992 had modified the environmental review process. The Quebec Court of Appeal

concluded that CEAA 1992 was broader in scope than the Guidelines Order in that it provided for

an environmental review whenever a federal permit, license or approval was required for the

purpose of enabling the project to be carried out. It stressed though at para 63:

Even more fundamentally, it should be recalled that environmental

statutes (shared jurisdiction) are constitutionally valid as long as

they remain accessory to the exercise of a (federal or [provincial])

legislative jurisdiction and that, generally speaking, such statutes

must be closely related to the jurisdiction to be exercised. In

contrast, such statutes may not in themselves serve as a pretext to

invade the jurisdictional field of another level of government.

[222] We do not agree that Moses CA eliminated the need for a federal decision-making authority

as the trigger for a federal environmental assessment. What Moses CA said was that given the

broader wording of CEAA 1992, which required an environmental assessment whenever there was

a need for a federal permit, license or approval, that was sufficient to trigger the federal review

process whereas under the Guidelines Order, that review was only required where there was a

“positive obligation under federal legislation to regulate in relation to a proposed undertaking or

activity”: Moses CA at para 102.¹³⁷This distinction flows from the different wording of the

enabling legislation. What the Quebec Court of Appeal did not do is approve the validity of a

federal environmental review of an intra-provincial activity absent a federal decision-making

authority with respect to that activity under a federal head of power.

[223] Recently, in Attorney General of Quebec v IMTT-Québec inc., 2019 QCCA 1598, leave

to appeal to SCC refused, 38929 (16 April 2020), the Quebec Court of Appeal again underscored

the need for the existence of a decision-making authority under otherwise valid legislation as a

trigger for environmental review by either level of government. It specifically endorsed at para

225 La Forest J’s remarks in Oldman River about the need for an affirmative regulatory duty as

136

Northey at 245-246.

137

It was this change in the scope of when an environmental review would be required that led to a different result

from Oldman River vis à vis the Fisheries Act. La Forest J found at 49 that: “Whereas the Minister of Transport is

responsible under the terms of the Navigable Waters Protection Act in his capacity as regulator, the Minister of

Fisheries and Oceans under s. 37 of the Fisheries Act has been given a limited ad hoc legislative power which does

not constitute an affirmative regulatory duty.”

Page: 72

being “just as applicable to provincial environmental impact assessment and review schemes,

which will validly be applied only if the province has an affirmative constitutional regulatory duty

with respect to the undertaking or activity in question”. It then added at paras 226-227:

[A]n environmental assessment is not an end in and of itself. It is a

decision-making tool. If a level of government has no decision-

making jurisdiction with respect to a project or an activity, an

environmental assessment carried out by that level of government

would be futile. It would also be unconstitutional. Thus, it is not the

responsibility of the Government of Quebec to assess a project or

activity under exclusive federal jurisdiction unless it must exercise

decision-making authority over the project or activity under a

constitutionally valid, applicable and operative provincial statute.

The same principle applies to the federal government with respect

to a project or activity under exclusive provincial jurisdiction. The

equilibrium of Canada’s constitutional order depends on it.

Consequently, one level of government cannot engage in an

environmental assessment of a project unless the project requires

the authorization of that government based on a constitutional

power or unless the other level of government consents. [Emphasis

added]

[224] Thus, a federal environmental assessment of an intra-provincial activity otherwise within

exclusive provincial jurisdiction must be tied to a constitutional decision-making authority over

that activity independent of the environmental assessment itself. Under the Guidelines Order, that

authority was the existence of an affirmative regulatory duty. Under CEAA 1992, that authority

was the requirement for a federal permit. These semantical distinctions are irrelevant. What is

relevant is whether some federal decision-making authority exists with respect to the intra-

provincial designated project, regardless of what it is labelled. The requirement for a decision-

making authority under a valid and applicable federal statute independent of the environmental

assessment evinces and establishes federal jurisdiction. The absence of such a decision-making

authority demonstrates the opposite.

[225] Under this legislative scheme, the designation of an intra-provincial activity is not

contingent on the existence of a federal decision-making authority over that activity.¹³⁸Nor is the

138

We recognize that, in the absence of a pre-existing decision-making authority, legislation authorizing an

environmental impact assessment of an intra-provincial activity could itself prescribe the scope of a decision-making

authority under specific federal heads of power. Such legislation would need to specify the parameters of federal

regulation of aspects of that intra-provincial activity on terms that would survive constitutional challenge. But the IAA

contains no legislative regulations relating to fisheries, species at risk, migratory birds or “Indians, and Lands reserved

for the Indians” with respect to intra-provincial designated projects. Parliament already has legislation on these subject

matters.

Page: 73

public interest determination. However, since there is no public interest determination head of

power, that public interest determination, along with the imposition of conditions and decision

statement relating thereto, must be linked to the exercise of a decision-making authority under a

constitutionally valid and applicable federal statute. It is not.

[226] Parliament’s failure to limit the IAA to intra-provincial designated projects that require a

federal permit or some other decision-making authority under a federal head of power constitutes

federal jurisdictional overreach.

b.

Regulation of Any and All Effects of Intra-Provincial Designated Projects

[227] Instead of grounding review of impact assessments of intra-provincial designated projects

in federal decision-making under federal heads of power, Parliament has imposed a review and

regulatory regime based on all the effects of such projects. As a result, the IAA is not limited to the

environmental effects of an intra-provincial designated project on a matter actually within federal

competence.

[228] There are three aspects to this facet of federal overreach vis à vis intra-provincial

designated projects. First, Parliament’s self-defined “effects within federal jurisdiction” under the

Act, as with the related “adverse effects within federal jurisdiction”, are not all within federal

jurisdiction. Second, the effects are not all validly linked to a federal head of power. In this regard,

the legislative scheme regulates all effects of an intra-provincial designated project even though

all are not sufficiently linked to any federal decision-making authority or are merely incidental to

the exercise of a provincial head of power or are not even significant. Third, on top of this, the

public interest determination by the federal executive is not even limited to the “effects” of

designated projects but also includes mandatory factors that themselves are not all validly linked

to a federal head of power.

(i)

Self-Defined “Effects Within Federal Jurisdiction” Are Not All Within

Federal Jurisdiction

[229] When applied to intra-provincial designated projects, not all the self-defined “effects

within federal jurisdiction” are within federal competence. It must be borne in mind that the

starting point is that provincial Legislatures have primary jurisdiction over intra-provincial

designated projects. Parliament’s jurisdiction is limited to the effects of those projects on federal

heads of power. Thus, Parliament has no constitutional right to regulate those projects from

beginning to end. Federal regulation is restricted to the effects of those projects on actual federal

heads of power.

[230] Take for example “a change to the environment that would occur in a province other than

the one” where the intra-provincial designated project is being carried out: Act, s 7(1)(b)(ii). Given

the broad sweep of this legislative scheme, that includes a change to the environment from GHG

emissions from intra-provincial designated projects. Indeed, Canada asserts its right to control

Page: 74

GHG emissions from those projects based on the national concern doctrine. But as we explain

later, GHG emissions generally, and from intra-provincial designated projects in particular, do not

fall within Parliament’s jurisdiction.

[231] Another example – “any change occurring in Canada to the health, social or economic

conditions of the Indigenous peoples of Canada”: Act, s 7(1)(d). Again, as explained later,

Parliament’s jurisdiction under s 91(24), when applied to intra-provincial designated projects, does

not include all changes caused by such projects to, for example, the economic conditions of an

Indigenous group. Nor does it entitle Parliament to exercise wholesale regulatory control over

intra-provincial designated projects on the basis of an impact resulting from “any change to the

environment” from such projects on “the current use of lands and resources for traditional

purposes”: Act, s 7(1)(c)(ii).

(ii)

Federal Jurisdiction Does Not Extend to Any and All Effects of Intra-

Provincial Designated Projects

[232] Parliament has empowered the federal executive to use any and all effects, environmental

and otherwise, from an intra-provincial designated project in deciding whether to make a positive

public interest determination, that is whether the project is in the public interest. However,

Parliament’s attempt to use all effects of an intra-provincial designated project in regulating and

prohibiting that project from proceeding cannot succeed. It runs counter to long-standing precedent

and has far-reaching negative implications for federalism and the division of powers. Simply put,

Parliament does not have the constitutional jurisdiction to regulate intra-provincial designated

projects from inception to completion merely because they may, or will, have some effects on a

matter otherwise within federal jurisdiction.

[233] First, the pith and substance of the federal legislation must be sufficiently connected to a

federal head of power. Using the fisheries as an example, if the pith and substance of federal

legislation is not sufficiently connected to protection of fisheries, it will not be valid: Fowler v The

Queen, [1980] 2 SCR 213 at 226 [Fowler].¹³⁹In Fowler, the Supreme Court characterized the

impugned section of the Fisheries Act, RSC 1970, c F-14 as seeking to control certain kinds of

operations not strictly on the basis they have deleterious effects on fish but, rather, on the basis

that they might have such effects. It concluded at 226 that the broad prohibition, which was not

linked to actual or potential harm to fisheries, was not necessarily incidental to the federal power

to legislate in respect of sea coast and inland fisheries and was ultra vires.

139

In Fowler, the Supreme Court found a provision enjoining the deposit of slash, stumps or other debris into water

frequented by fish ultra vires Parliament since it was not validly linked to any actual or potential harm to fisheries.

But in Northwest Falling Contractors Ltd. v The Queen, [1980] 2 SCR 292, the Supreme Court found a provision

prohibiting the deposit of deleterious substances in any place where they might enter waters frequented by fish intra

vires under s 91(12) of the Constitution Act, 1867. La Forest J pointed out the distinction between these two cases in

Oldman River at 68.

Page: 75

[234] Under the IAA however, there is no requirement that the effects of an intra-provincial

designated project must be linked to actual or likely harm to the fisheries (or another matter within

a federal head of power) such that a federal permit would be required for the project to proceed.

As noted, there is no requirement that an intra-provincial designated project even need a federal

permit as an entry point into this assessment and regulatory regime. Thus, the “effects” from intra-

provincial designated projects are not limited to “direct or incidental effects” that would, in turn,

give rise to the need for a federal permit for the project. That is obvious from the Act which

explicitly distinguishes between “direct or incidental effects” linked to a federal permit, which are

within Parliament’s jurisdiction and are addressed under s 8, and self-defined “effects within

federal jurisdiction”, which are not all within Parliament’s jurisdiction and are addressed under

s 7.

[235] In the result, this legislative scheme is not limited to protecting against adverse effects on

matters within federal competence that would meet the constitutional test for federal regulation of

aspects of intra-provincial designated projects.

[236] Second, even if the effects of an intra-provincial designated project are linked to a federal

head of power, there is no requirement under this legislative scheme that the effects even be

significant before the federal executive can deny a positive public interest determination and

effectively end the project. Neither the impact assessment nor public interest determination and

related decision-making elements are limited to protecting against significant adverse

environmental effects as claimed in the long title of the Act.

[237] Prior to the Act, every version of federal environmental assessment legislation required that

adverse effects on matters within federal jurisdiction be significant to warrant federal regulation

of some aspect of the project. For example, the stated purposes of CEAA 1992 included preventing

significant adverse environmental effects: CEAA 1992, s 4(1)(a).¹⁴⁰And the first stated purpose in

CEAA 2012 was “to protect the components of the environment that are within the legislative

authority of Parliament from significant adverse environmental effects caused by a designated

project”: CEAA 2012, s 4(1)(a), emphasis added.

[238] That purpose in CEAA 2012 was reflected in its relevant substantive provisions. Under

CEAA 2012, the federal government’s decision whether to issue a positive decision statement and

set out any conditions a proponent must meet was directly related to whether the proposed project

was likely to cause significant adverse environmental effects and even if it did, whether those could

nevertheless be “justified in the circumstances”: CEAA 2012, ss 52-54. In other words, CEAA 2012

essentially contemplated that a positive decision statement would be forthcoming if the project

was not likely to cause significant adverse effects on a matter actually related to a federal head of

power and even if it was likely to cause significant adverse effects, if it could nevertheless be

140

The Guidelines Order did not contain a purpose provision. The stated purposes of CEAA 1992 included considering

projects in a precautionary manner and promoting sustainable development: CEAA 1992, s 4(1)(a)-(b).

Page: 76

justified in the circumstances. Accordingly, CEAA 2012 had a materiality threshold (significant)

for adverse federal effects built into it.¹⁴¹

[239] However, the Act includes no materiality threshold in the federal executive’s public interest

determination or decision statement relating thereto. Instead, under the Act, the requirement for a

materiality threshold, significant adverse effects, is gone. It is now a stated purpose “to protect the

components of the environment, and the health, social and economic conditions that are within the

legislative authority of Parliament from adverse effects caused by a designated project”: Act,

s 6(1)(b), emphasis added.¹⁴²

[240] It is true that under s 28(3) of the Act, the Agency must set out in its Report the effects that

are “likely to be caused by the carrying out of the designated project” and “the extent to which

those effects are significant”. And a review panel must do likewise under s 51(1)(d)(i)-(ii) of the

Act. But the parameters for the public interest determination by the Minister or Governor in

Council do not include a materiality threshold. While ss 60(1)(a) and 62 both require the Minister

or Governor in Council to take into account the Report and the adverse federal effects indicated

therein and to consider the extent to which any adverse federal effects are significant in making a

public interest determination, there is no requirement that any purported adverse federal effects

actually be significant. To the contrary. The explicit reference to considering the “extent” to which

adverse federal effects are “significant” makes it clear that they need not be significant. In other

words, if the adverse federal effects are not significant, there is no requirement that the Minister

or Governor in Council must make a positive public interest determination.¹⁴³

[241] In the result, the Act allows the federal executive to stop any intra-provincial designated

project whenever there are any adverse federal effects of that project on the components of the

environment even where no federal permit is required and even where such effects are not even

141

So too did CEAA 1992. It provided that the Minister “shall” issue an environmental assessment decision statement

setting out the Minister’s opinion whether the “project is or is not likely to cause significant adverse environmental

effects”: CEAA 1992, s 23(1)(a). It too contemplated that the responsible authority would permit the project to be

carried out where it was not likely to cause significant adverse environmental effects or, even if it was likely to cause

significant adverse environmental effects, where those effects could be justified in the circumstances: s 37(1)(a).

142

Nor is there any requirement that there even be likely adverse effects before the Agency directs that an impact

assessment proceed. The “possibility that the carrying out of the designated project may cause adverse effects within

federal jurisdiction or adverse direct or incidental effects” is but one of the seven factors to be considered, and even

this low standard is not a prerequisite: Act, s 16(2)(b), emphasis added.

143

The IAA appears to assume there will inevitably be effects which qualify as adverse federal effects. It fails to

address what would occur if the Agency, review panel, Minister or Governor in Council after an assessment concluded

there were no adverse federal effects from a designated project. The Agency (s 28(3)) and review panel (s 51(1)(d))

are directed to indicate the adverse federal effects in their respective Reports and appear to be required to submit those

Reports even if no such effects are identified. The decision statement (s 65) does not contemplate a decision that there

are no adverse federal effects. While it might be suggested it is “implied” that a decision statement would be issued

with no conditions, it is telling that this prospect is not even contemplated.

Page: 77

significant. This would include any adverse federal effects not prohibited under any existing

federal law.

[242] Third, if the federal executive could prohibit an intra-provincial designated project from

proceeding simply because its effects may have some impact on a matter within a federal head of

power, this would negate a key element of the pith and substance doctrine. Under the pith and

substance doctrine, one level of government may validly legislate on matters within its jurisdiction

in a manner that causes incidental effects on matters within the jurisdiction of the other level of

government: Canadian Western Bank at paras 28-29; Hogg at §15:5. Therefore, if the pith and

substance of a law is within a head of power assigned exclusively to the provinces, the fact the law

may have incidental effects – which could involve a “substantial impact” – on a head of power

within exclusive federal jurisdiction is irrelevant for constitutional purposes: ibid.; General

Motors of Canada Ltd. v City National Leasing, [1989] 1 SCR 641 at 670 [General Motors];

Quebec (Attorney General) at para 32; Rogers Communications at para 37; Paul at para 14.

[243] It is equally irrelevant where a provincial law, authorizing, for example, a local work and

undertaking on terms and conditions set by the provincial government, has incidental effects on

something over which the federal government does not have exclusive jurisdiction, namely the

environment. Almost every activity in life affects the environment in some way. “[E]nvironmental

pollution alone is itself all-pervasive. It is a by-product of everything we do. In man’s relationship

with his environment, waste is unavoidable.” ¹⁴⁴It would be ironic indeed if the federal

government could use the “environment” to shove aside the power of provincial governments to

authorize and regulate intra-provincial activities where the federal government could not use

incidental effects of a provincial law on an actual head of exclusive federal power to do so. Thus,

the fact a provincial law under which intra-provincial activities are authorized may have some

incidental effects on the environment, which is not a federal head of power, but merely related to

a federal head of power, is also constitutionally irrelevant.

[244] Were Parliament permitted to prohibit “all effects” on its heads of power flowing from an

activity authorized by a provincial Legislature under valid provincial laws, that would effectively

prohibit that authorized activity.¹⁴⁵For example, if a federal law prohibiting “any effects” on

banks were constitutionally valid, banking being within exclusive federal jurisdiction under s

91(15) of the Constitution, that could insulate banks from provincial taxation (upheld in Bank of

Toronto v Lambe (1887), 12 App Cas 575 (PC)) and provincial rules for selling insurance (upheld

in Canadian Western Bank). This would defeat the principle that valid provincial legislation can

authorize an activity which has incidental effects on matters within federal jurisdiction.

[245] To be clear, in regulating “all effects” of an intra-provincial designated project, Parliament

is regulating the project itself. The effects of an intra-provincial designated project do not arise,

nor exist, in a vacuum. They are tied to one thing and one thing only – the project itself.

144

Crown Zellerbach at 455, per La Forest J.

145

And vice versa.

Page: 78

Substantively, this legislative scheme regulates not only effects, but the physical activity giving

rise to the effects, that is the intra-provincial designated project. Of course, under the IAA,

Parliament has not regulated every aspect of the project. But federal regulatory authority

necessarily extends to the project itself since Parliament has given the federal executive the

ultimate regulatory club – an effective veto over every intra-provincial designated project. That

veto is the apex of regulation. It is evidenced by the necessity for a positive public interest

determination by the federal executive before a proponent can effectively proceed with an intra-

provincial designated project. No positive public interest determination equals no project.

[246] What Parliament has done under the IAA is to use what may well be no more than incidental

effects of provincial legislation (under which such intra-provincial designated projects are

authorized) on federal heads of power, or more problematic yet, incidental effects of provincial

legislation on the environment, which is not a federal head of power, to justify legislation that

directly invades provincial jurisdiction. This turns the incidental effects doctrine upside down.¹⁴⁶

[247] Canada’s submission that “any” potential effects on a matter within its jurisdiction justifies

a full impact assessment and regulation of matters otherwise within provincial jurisdiction is also

inconsistent with its position in Environmental Management Act BCCA.¹⁴⁷In that case, Canada

challenged amendments to British Columbia’s Environmental Management Act, SBC 2003, c 53.

The purpose of that legislation was described at para 38 as “the protection of the environment, the

health and well-being of British Columbians and their communities from the adverse effects of

hazardous substances, and the implementation of the ‘polluter pays’ principle”.

[248] Canada successfully argued the legislation was ultra vires to the extent it “would

effectively lead to a situation of concurrent jurisdiction, contrary to the exclusive authority

contemplated by the Constitution Act”, with respect to an interprovincial undertaking subject to

federal jurisdiction: para 3, emphasis in original. Canada contended the National Energy Board

Act, RSC 1985, c N-7 and related statutes “constitute a comprehensive and integrated scheme for

the regulation of interprovincial pipelines, and environmental protection is a key part of that

scheme”: ibid. While Canada sought to distinguish Environmental Management Act BCCA as

legislation targeting the TMX pipeline, that was not the basis of the judgment of the British

Columbia Court of Appeal. Indeed, that Court specifically indicated at para 97 that the impugned

legislation was not colourable.

[249] Alberta, Saskatchewan and Ontario have each passed a “comprehensive and integrated

scheme” for the regulation of local works and undertakings and the development of their natural

resources. Environmental protection is a key part of each of their schemes. The IAA leads to

concurrent jurisdiction with respect to intra-provincial designated projects otherwise subject to

provincial jurisdiction under provincial heads of power.

146

We recognize that an authorized intra-provincial activity may well have effects on a federal head of power such

that it requires a federal permit. But not all intra-provincial designated projects are in this category.

147

This was unanimously upheld by the Supreme Court: 2020 SCC 1.

Page: 79

[250] We would add this. If Parliament could validly exercise jurisdiction over matters otherwise

within provincial jurisdiction because of “any effects” on federal matters, a provincial Legislature

could presumably validly exercise jurisdiction over matters within federal jurisdiction because of

“any effects” on provincial matters. The converse of the IAA would be provincial legislation

authorizing the province to designate projects (including those which fall within federal

jurisdiction such as an airport or inter-provincial pipeline) and subjecting them to a multi-year

environmental review process to determine if there might be any adverse effects on matters within

provincial jurisdiction and, in the meantime, prohibiting any effects unless the project is found to

be in the public interest based on provincial priorities and policies. On this theory, a provincial

government would be able to hold up construction of, for example, a new airport or inter-provincial

pipeline for years pending completion of the review process to determine if the construction might

have “any effects” on matters within provincial jurisdiction (such as wildlife or property and civil

rights) and then, if it decided that the project was not in the public interest based on provincial

policies and priorities, ultimately stop it from proceeding.

(iii) Public Interest Determination Is Not Limited to Purported Adverse Federal

Effects

[251] In addition, in any event, the jurisdiction Canada claims is not even limited only to the

purported adverse federal effects of intra-provincial designated projects. The Act requires that the

mandatory factors must be taken into account in both the impact assessment and public interest

determination phases of this legislative scheme. Section 63 of the Act provides that both the Report

(which must consider the s 22 mandatory factors) and the s 63 mandatory factors must be taken

into account in making a public interest determination.¹⁴⁸

[252] However, several of the mandatory factors, when applied to intra-provincial designated

projects, are not linked to a federal head of power. Take for example, the “need for the designated

project”: Act, s 22(1)(d). Whether an intra-provincial designated project is needed is for the

provincial government to decide, not the federal government. Parliament has no head of power

authorizing it to determine whether an intra-provincial designated project is “needed”.

[253] Or take for example one of the s 63 mandatory factors, “the extent to which the designated

project contributes to sustainability”: Act, s 63(a). Sustainability is defined as “the ability to protect

the environment, contribute to the social and economic well-being of the people of Canada and

preserve their health in a manner that benefits present and future generations”: Act, s 2. While this

is within Parliament’s jurisdiction for federal designated projects, that is not so for intra-provincial

designated projects. Parliament has no head of power giving it the right to authorize the federal

executive to decide whether an intra-provincial designated project is in the public interest based

148

The Report must also take into account “any other matter relevant to the impact assessment that the Agency

requires to be taken into account”: Act, s 22(1)(t). This potentially expands the scope of a Report to an unlimited

extent.

Page: 80

on whether that project contributes to the social and economic well-being of the people of

Canada.¹⁴⁹And to effectively put an end to it if the federal executive decides it is not. Indeed, the

very fact the federal executive is entitled to put on the public interest determination scale whether

the intra-provincial designated project contributes to the well-being of the people of Canada refutes

the assertion that the public interest determination for intra-provincial designated projects is not

based on federal priorities and policies. It most assuredly is.

[254] Another example is s 63(e), “the extent to which the effects of the designated project hinder

or contribute to the Government of Canada’s ability to meet its environmental obligations and its

commitments in respect of climate change”. Again, this does not fall within Parliament’s

jurisdiction when applied to intra-provincial designated projects.

[255] As a result, the scope of both the impact assessment and the public interest determination

permit the federal executive to use not only “any effects” of an intra-provincial designated project

but also the defined mandatory factors to regulate and ultimately stop an intra-provincial

designated project from proceeding. This too constitutes federal jurisdictional overreach and is, by

itself, fatal to this legislative scheme.

(iv)

Conclusions

[256] Parliament’s attempt to use “any effects” and an equally wide range of mandatory factors

in its oversight and regulation of intra-provincial designated projects raises the very concern

recognized by La Forest J in Oldman River at 71-72:

I am not unmindful of what was said by counsel for the Attorney

General for Saskatchewan who sought to characterize the

Guidelines Order as a constitutional Trojan horse enabling the

federal government, on the pretext of some narrow ground of federal

jurisdiction, to conduct a far ranging inquiry into matters that are

exclusively within provincial jurisdiction....

Because of its auxiliary nature, environmental impact assessment

can only affect matters that are “truly in relation to an institution or

activity that is otherwise within [federal] legislative jurisdiction”....

Moreover, where the Guidelines Order has application to a proposal

because it affects an area of federal jurisdiction ... the environmental

effects to be studied can only be those which may have an impact on

the areas of federal responsibility affected. [Emphasis added]

149

It is for the relevant provincial government or provincial authority to determine whether an intra-provincial

designated project is in the best interests of the people of the province involved.

Page: 81

[257] It is noteworthy that the Supreme Court’s response to, and dismissal of, the Trojan horse

concern was based on its conclusions that the environmental impact assessment could only affect

matters truly in relation to an activity otherwise within federal legislative jurisdiction and that the

environmental effects to be studied can only be those which may have an impact on the areas of

federal responsibility affected. Oldman River was not therefore an endorsement of comprehensive

federal environmental impact assessments of intra-provincial activities otherwise within provincial

jurisdiction. To the contrary.

[258] Nor has the Supreme Court in any subsequent decision modified those conclusions from a

constitutional perspective. We recognize that in Red Chris, the Supreme Court determined that a

federal authority was required to undertake a comprehensive study of a proposed project, rather

than simply screening the project. But Rothstein J made it clear at para 27 that the issue before the

Court was one of statutory interpretation: “The duty of this Court is to interpret the Act based on

its text and context.” The constitutionality of the legislation in question was not before the Supreme

Court. Red Chris neither purported to, nor did it, overrule Oldman River regarding the scope of

federal environmental impact assessments for intra-provincial activities.

[259] Duplication of comprehensive environmental impact assessments arguably creates a

jurisdictional nightmare for proponents of intra-provincial designated projects. While their

perspective is not relevant to the division of powers, what is relevant are the consequences

potentially flowing therefrom for the provincial governments that would otherwise have exclusive

jurisdiction over those projects, namely constitutional gridlock and improper intrusion into

provincial jurisdiction. We appreciate the arguments in favour of comprehensive environmental

impact assessments. However, while every activity in this country is subject to federal or

provincial jurisdiction or sometimes both, there being no gap in constitutional powers, one

government level typically has primary jurisdiction over an activity. For intra-provincial

designated projects, that would be the provincial government. And since all provincial

governments have comprehensive environmental impact assessment legislation in place, as a

practical matter, the relevant provincial government can be counted on to conduct a comprehensive

environmental impact assessment. Thus, as a further practical matter, that comprehensive

assessment would be available to both government levels to use for its respective purposes.

[260] That said, given our view of the degree of federal jurisdictional overreach under this

legislative scheme, we see no need to explore the issues relating to duplication of comprehensive

environmental impact assessments. In particular, we do not find it necessary to consider whether

the federal government has the jurisdiction to compel, as does this legislative scheme, a

comprehensive impact assessment of every intra-provincial designated project even where the

effects studied extend beyond the areas of federal responsibility affected by that project.

[261] One point is clear regardless. Parliament does not have the jurisdiction to take over the

wholesale regulation of intra-provincial designated projects, especially in the absence of any actual

decision-making authority with respect to those projects. Accordingly, it does not have the

jurisdiction to authorize the federal executive to use all effects of an intra-provincial designated

Page: 82

project, whether by themselves or in combination with the mandatory factors, to stop the project

from proceeding if the federal executive decides the project is not in the public interest.

[262] It follows that we reject the contention that under this legislative scheme, Parliament has

only regulated what it calls “adverse effects within federal jurisdiction”. We have already

explained why self-defined “effects within federal jurisdiction” do not all fall within federal

jurisdiction regardless. Nor does adding the adjective “adverse” to the mix, as in “adverse effects

within federal jurisdiction”, change this conclusion. Since “adverse” is not even defined in the Act,

this adjective includes any “adverse” environmental change no matter how insignificant it may

be.¹⁵⁰But “adverse” effects cannot be equated with the provable “harm” that would be required

for those effects to actually fall within a federal head of power, for example fisheries. Moreover,

the prohibitions under the IAA are not even tied to “adverse” effects. Those prohibitions apply

irrespective of whether the effects of an intra-provincial designated project are positive, neutral,

or adverse. Thus, the argument that under this legislative scheme, Parliament has regulated only

“adverse” effects of intra-provincial designated projects “within federal jurisdiction”, irrespective

of what “adverse” actually means, is simply erroneous.

[263] We also reject the argument that this legislative scheme merely has an incidental effect on

provincial powers. The problem here is not with the incidental effects of this legislative scheme;

the problem is with its main thrust: First Securities Reference at para 129. This legislative scheme

regulates intra-provincial designated projects from beginning to end. Further, even where the

effects of an intra-provincial project truly affected a matter within one of Parliament’s heads of

power, its jurisdiction is limited to the consequences of those effects on that head of power.

Parliament does not have jurisdiction over all effects, environmental and otherwise, of intra-

provincial designated projects not linked at all, or not sufficiently linked, to federal heads of power,

much less the right to authorize the federal executive to effectively veto all intra-provincial

designated projects based on its unilateral determination that the project is not in the public interest.

[264] If Parliament had that kind of unbridled power, it would eviscerate provincial legislative

competence. No federal head of power should be given a scope that would lead to this result: First

Securities Reference at para 71; References re Greenhouse Gas Pollution Pricing Act SCC at

para 49.

c.

Prohibitions Under Section 7 and Federal Jurisdictional Overreach

[265] Section 7 imposes substantial prohibitions on the proponents of designated projects only.

The proponent of a designated project, like the proponent of any other project in this country, is

subject to all federal laws of general application, including all environmental prohibitions and

150

Given the breadth of the definitions of “effects” and “effects within federal jurisdiction”, every intra-provincial

designated project will invariably have some “adverse effects within federal jurisdiction”. In fact, this legislative

scheme does not even contemplate what would occur if the Agency, review panel, Minister or Governor in Council

concluded there were no such adverse effects.

Page: 83

regulations. Under those laws, necessary federal approvals or permits must be obtained to enable

the project to proceed.

[266] The IAA, however, imposes additional prohibitions and related sanctions specifically and

exclusively on the proponents of designated projects. Proponents of intra-provincial designated

projects are prohibited from doing any act or thing that may cause any of the “effects” listed in

s 7(1).¹⁵¹The result is that proponents of intra-provincial designated projects are prohibited from

engaging in conduct that is permissible for others and which is not otherwise prohibited by laws

of general application – and for which they alone are exposed to substantial penalties – unless and

until a positive public interest determination is made.

[267] There were no prohibitions under the Guidelines Order which was procedural rather than

substantive in nature.¹⁵²Thus, project proponents were not subject to additional prohibitions not

applicable to anyone else in Canada merely because they were the proponent of a project. Under

CEAA 1992, a Minister could, by order, prohibit a proponent from doing any act or thing that

would alter the environment: CEAA 1992, s 11.1(1). However, any prohibition under CEAA 1992

was not automatic but rather required a positive action to make an order. Further, the prohibition

applied only to acts or things that would, not might, alter the environment.

[268] CEAA 2012 first introduced the concept of an automatic prohibition into federal

environmental assessment legislation. It provided that a proponent of a project must not cause

certain listed effects unless the project did not require an assessment or the proponent complied

with conditions in a decision statement: CEAA 2012, s 6. As noted though, that scheme was

fundamentally different in a number of crucial constitutional respects from this one and its

constitutionality was never challenged by a province.

[269] Contravening s 7 of the Act is a summary conviction offence, but subject to substantial

penalties.¹⁵³The maximum fine for contravening the prohibition under CEAA 2012 ranged from

$200,000 to $400,000: CEAA 2012, s 99(1). Under s 144 of the Act, the magnitude of fine has

increased substantially and can now be up to $8 million per offence per day.¹⁵⁴In addition, the

151

The prohibitions apply regardless of whether the effects are positive, neutral or adverse, material, actually linked

to a federal head of power or have even been the subject of regulation under a federal head of power.

152

As stated in Oldman River at 42: “The Guidelines Order establishes an environmental assessment process for use

by all federal departments in the exercise of their powers and the performance of their duties and functions, whereas

the Fisheries Act embraces the substantive matter of protecting fish and fish habitat. There is, of course, a connection

between the two, but the crucial difference is that one is fundamentally procedural while the other is substantive in

nature” (emphasis added).

153

The minimum fine for a first offence and range for subsequent offences, respectively, is $5,000 and $10,000 to

$600,000 for an individual; $25,000 and $50,000 to $4 million for a small revenue corporation; and $100,000 and

$200,000 to $8 million for any other corporation: Act, s 144.

154

Where offences are committed or continue on more than one day, that constitutes a separate offence for each day,

meaning the fine can be imposed per day: Act, s 146(1).

Page: 84

Act makes any senior officer of a corporation, as defined in s 2 of the Criminal Code, who directed,

authorized, assented to or acquiesced in the commission of the offence a “party to and guilty of

the offence”: s 147. It also imposes on every senior officer the obligation to “take all reasonable

care to ensure that the corporation” complies with the Act: s 148.

[270] The result is that both the prohibited effects and offences under the Act are broader in scope,

the personal jeopardy greater for senior officers of corporations and the fines prohibitive. It is

understandable therefore why no senior officer of a corporation would ever proceed with an intra-

provincial designated project without federal approval through a positive public interest

determination and decision statement setting out the conditions for proceeding with that project.

[271] A review of the specific prohibitions under s 7(1) demonstrates the breadth of their legal

effects and the extent to which they improperly trench on provincial powers.

(i)

Prohibitions on Changes to Particular Components of the Environment

Changes to Fish and Fish Habitat and Aquatic Species

[272] Existing legislation under s 91(12) of the Constitution Act, 1867 regarding the fisheries

addresses specific issues or concerns in relation to fish, fish habitat and aquatic species at risk.

Both the Fisheries Act and Species at Risk Act, SC 2002, c 29 [Species at Risk Act] provide criteria,

identify objectives and impose sanctions. The IAA contains no such provisions in relation to fish,

fish habitat or species at risk. Instead, the proponent of a designated project is prohibited from

causing any change to fish and fish habitat and aquatic species: Act, s 7(1)(a)(i) (fish and fish

habitat), s 7(1)(a)(ii) (aquatic species). The legal effect of these sections is that the proponent of

an intra-provincial designated project is prohibited from conduct that may cause any effects to fish,

fish habitat and aquatic species even where Parliament has not seen fit to regulate or require a

federal permit for the subject conduct.

[273] Where the true purpose is protection of fisheries, federal legislation will be valid despite

having an incidental effect on property interests or development of natural resources in a province:

Moses SCC at para 36. However, this legislative scheme is far removed from Moses SCC where

the Supreme Court confirmed that while a vanadium mining project fell within provincial

jurisdiction under s 92A, “a mining project anywhere in Canada that puts at risk fish habitat could

not proceed without a permit from the federal Fisheries Minister, which he or she could not issue

except after compliance with the CEAA.” To repeat, the need for a federal permit is not a

prerequisite to an intra-provincial activity being designated as an intra-provincial designated

project under the IAA.

[274] Under the IAA, the proponent of an intra-provincial designated project is prohibited from

doing any act that could have any effect on fish and fish habitat.¹⁵⁵If Parliament added an offence

155

Currently, the Fisheries Act prohibits any person from carrying on any work, undertaking or activity “other than

Page: 85

to the Fisheries Act prohibiting any person from engaging in any conduct that could have any effect

on fish or fish habitat, or passed a new law to this effect, both would, given Fowler, be ultra vires.

But the proponents of intra-provincial designated projects are subject to this very prohibition

throughout the IAA process and indefinitely unless the federal executive makes a positive public

interest determination. The fact the prohibition is subsumed in the IAA as part of an even more

expansive prohibition does not make it any less unconstitutional. Proponents of designated projects

alone are prohibited from engaging in conduct which is permissible for everyone else based on a

prohibition that would be ultra vires Parliament had it directly regulated such conduct by a law of

general application.¹⁵⁶

[275] For example, s 92A(1)(c) of the Constitution Act, 1867 provides that provinces have

exclusive jurisdiction to make laws in relation to the “development, conservation and management

of sites and facilities in the province for the generation and production of electrical energy”. A

new intra-provincial hydroelectric generating facility is a designated project and subject to the IAA

unless it has a production capacity of less than 200 MW: Regulations Schedule, s 42(a). The

proponent of a new hydroelectric generating facility below the 200 MW threshold (and not

therefore included as a designated project) could cause adverse effects on fish or fish habitat to the

extent they were not otherwise prohibited or regulated under the Fisheries Act. But a proponent of

a new hydroelectric generating facility with a capacity of 200 MW or more which would cause

less significant adverse effects on fish or fish habitat (for example, because it employed more

sophisticated technology) could be indefinitely prohibited from proceeding based on a

determination by the federal executive that the project was not, despite those lesser effects, in the

“public interest”. The result – proponents of intra-provincial designated projects can be indefinitely

prohibited from causing the same or lesser adverse effects on the environment than are permitted

to be caused by similar non-designated projects.

[276] The differing consequences underscore the federal overreach and demonstrable lack of

connection of the IAA to a federal head of power. They reveal that the true purpose of the IAA is

not to prevent adverse environmental effects on matters actually within federal jurisdiction but

rather to regulate intra-provincial designated projects and veto those which the federal executive

does not consider to be in the public interest – based on federal priorities and policies.

[277] Parliament does not have exclusive jurisdiction over every effect on every fish caused by

an intra-provincial designated project in Canada; its head of power is over the fisheries. That means

regulation of the fisheries through preservation of fish and their environment: Hogg at §30:26.

Hence, the mere fact there may be an “effect” of an intra-provincial designated project on some

fish somewhere does not, by itself, entitle the federal executive to “prohibit” that project from

fishing, that results in the death of fish” (s 34.4(1)) or “that results in the harmful alteration, disruption or destruction

of fish habitat” (s 35(1)), subject to specified exceptions including the issuance of a permit by the Minister.

156

This is an example of “effects” that fall within the scope of the self-defined “effects within federal jurisdiction”

for purposes of the Act but are not sufficiently linked to a federal head of power and thus are not effects within federal

jurisdiction for purposes of the Constitution.

Page: 86

proceeding where the project does not otherwise require a federal permit under valid federal

legislation.

Changes to Migratory Birds

[278] Canada relies on its jurisdiction under s 132 of the Constitution Act, 1867 to anchor the

prohibition in s 7(1)(a)(iii) relating to designated projects that cause, or may cause, any effects on

migratory birds and the ability of the federal executive to decide whether intra-provincial

designated projects which have any adverse effects on migratory birds should be allowed to

proceed. Section 132 provides that:

The Parliament and Government of Canada shall have all Powers

necessary or proper for performing the Obligations of Canada or of

any Province thereof, as Part of the British Empire, towards Foreign

Countries, arising under Treaties between the Empire and such

Foreign Countries. [Emphasis added]

[279] The treaty Canada relies on is the 1916 Convention for the Protection of Migratory Birds

in Canada and the United States made between the British Empire and the United States which

was implemented in The Migratory Birds Convention Act, SC 1917, c 18. A later amendment to

the Convention was implemented in the Migratory Birds Convention Act, 1994, SC 1994, c 22

[Birds Act], which is referenced in s 7(1)(a)(iii) of the Act.¹⁵⁷The Birds Act contains broad

prohibitions against being in possession of a migratory bird or nest, or making them subject to a

commercial transaction without lawful excuse: s 5. Similarly, no person or vessel (broadly defined

as a boat, ship, etc.) can deposit (broadly defined as discharging, spraying, releasing, etc.) a

substance that is harmful to migratory birds in “waters or an area frequented by migratory birds

or in a place from which the substance may enter such waters or such an area”: s 5.1(1).¹⁵⁸

[280] The Birds Act also confers broad authority on the Governor in Council to “make any

regulations” considered “necessary to carry out the purposes and provisions” of the Birds Act and

Convention, including providing time periods and areas in which migratory birds can be captured,

killed or taken, their nests can be damaged, destroyed, etc., or become subject to a commercial

transaction: s 12(1)(a)-(d).¹⁵⁹

157

The Convention was amended by the “Protocol Between the Government of Canada and the Government of the

United States of America Amending the 1916 Convention Between the United Kingdom and the United States of

America for the Protection of Migratory Birds in Canada and the United States” signed on December 14, 1995. See

Factum of the Attorney General of Canada at paras 113-116.

158

Other prohibitions include destroying information or documents required under the Act: s 5.2.

159

Regulations may be made “for granting permits to remove or eliminate migratory birds or nests where it is

necessary to do so to avoid injury to agricultural interests or in any other circumstances set out in the regulations” and

“respecting the issuance, renewal, revocation and suspension of permits”: s 12(1)(e)-(f).

Page: 87

[281] The prohibition in s 7(1)(a)(iii) suffers from the same defects as a law that prohibits “any

effects” on fish. The constitutionally impermissible over-breadth of this prohibition is

demonstrated by its application to intra-provincial designated projects that may cause any effects

on migratory birds regardless of whether those effects are material or the subject of prohibitions

under the Birds Act or whether the project even requires a permit under the Birds Act.

(ii)

Prohibitions on Changes on Federal Lands, Outside the Province or Outside

Canada

[282] The proponent of a designated project is prohibited from doing any act or thing that may

cause any changes to the environment that would occur on federal lands (Act, s 7(1)(b)(i)) or in a

province other than the one in which the act or thing is done (Act, s 7(1)(b)(ii)) or outside Canada

(Act, s 7(1)(b)(iii)).

[283] Canada suggests that this type of regulation is not new and that CEAA 1992 permitted the

Minister to refer a matter for environmental assessment if of the opinion that the project could

cause significant adverse environmental effects in another province. However, the Act is not

limited to significant adverse environmental effects that occur in another province since

s 7(1)(b)(ii) prohibits any change to the environment that would occur outside a province

regardless of its materiality.¹⁶⁰

[284] What Parliament is attempting to do is use any possible change to the environment – that

would be anything in the entire biosphere given the definition of environment – on federal lands

or outside the province or outside Canada from an intra-provincial designated project wholly

within a province to justify regulation of that project.¹⁶¹Again, this is no more constitutionally

valid than a law that prohibits any effects on banks or fish.

Why the National Concern Doctrine Does Not Include Regulation of GHG Emissions

[285] Canada defends the prohibitions in s 7(1)(b)(ii)-(iii) on the basis of the national concern

doctrine. Parliament’s regulation of effects from intra-provincial designated projects that occur

outside the province in which the project is located or outside Canada does not satisfy the three-part

test under the national concern doctrine.¹⁶²In particular, in neither of these cases does the matter

160

CEAA 1992 and CEAA 2012 were significantly different in key constitutional respects from the IAA.

161

“Environment” is defined under s 2 of the Act as meaning “the components of the Earth, and includes (a) land,

water and air, including all layers of the atmosphere; (b) all organic and inorganic matter and living organisms; and

(c) the interacting natural systems that include components referred to in paragraph (a) and (b)”.

162

The matter must be (1) “of sufficient concern to the country as a whole to warrant consideration as a possible

matter of national concern”; (2) “a specific and identifiable matter that is qualitatively different from matters of

provincial concern” and where there is “provincial inability to deal with the matter”; and (3) the scale of impact must

be “reconcilable with the division of powers”: References re Greenhouse Gas Pollution Pricing Act SCC at paras

163-165.

Page: 88

have a “scale of impact on provincial jurisdiction that is reconcilable” with the division of powers:

References re Greenhouse Gas Pollution Pricing Act SCC at para 160. This legislative scheme

fails this third part of the test.¹⁶³

[286] Parliament’s primary target and claimed entry point into regulation of intra-provincial

designated projects is patent – GHG emissions. The federal government has made no attempt to

conceal its intention on this front. As noted, Parliamentary debates expressly acknowledged GHG

emissions as a consideration in developing the project list. This goal – regulation of GHG

emissions – is also reflected in the mandatory factors that must be taken into account in the impact

assessment of a designated project. Under s 22(1)(i), the factors include “the extent to which the

effects of the designated project hinder or contribute to the Government of Canada’s ability to

meet its environmental obligations and its commitments in respect of climate change”. It is also

an explicit mandatory consideration in the federal government’s public interest determination: Act,

s 63(e). And it is reflected as well in ss 32-33 of the Regulations Schedule which exempts in situ

oil sands facilities in a province from the project list if, but only if, that province has legislated

GHG emission limits on oil sands sites.

[287] What this reduces to is this. Where a proposed intra-provincial project in a province would

emit any GHG emissions – and that would necessarily include every proposed intra-provincial

project in every province – Parliament claims the unilateral right to decide whether it will, or will

not, designate that project and, more important, if designated, whether that project will, or will not,

proceed. That is the legal effect of s 7(1)(b)(ii)-(iii). Again, this constitutes federal jurisdictional

overreach.

[288] This is just another way of Parliament’s seeking to do indirectly what it does not have the

constitutional right to do directly under the division of powers. That is to regulate GHG emissions

generally in a province or in individual intra-provincial designated projects, or category thereof,

in that province. We do not suggest this legislative scheme is colourable. Colourable legislation

rests on the premise that the true motive of the legislation is something other than its stated purpose.

But there is no hidden motive in this legislative scheme. Everything is there in plain sight – if one

is prepared to look.

[289] All three appellate courts that heard the Greenhouse Gas References concluded that the

federal government did not have the constitutional jurisdiction to regulate GHG emissions in a

163

As noted in References re Greenhouse Gas Pollution Pricing Act SCC at para 133: “[A]n onus rests on Canada

throughout the national concern analysis to adduce evidence in support of its assertion of jurisdiction.” The GGPPA

satisfied the third part of the test because the federal backstop feature only applied where specific provincial

deficiencies existed. Conversely, the IAA allows the federal executive to effectively veto an intra-provincial designated

project despite a province’s full impact assessment, approval and regulation of that project. Canada led no evidence

to meet the second part of the test either. Regulating the effects of intra-provincial designated projects, including their

GHG emissions, is not qualitatively different from matters of provincial concern, nor is there provincial inability to

deal with the same.

Page: 89

province.¹⁶⁴The appellate courts split on whether carbon pricing involved that degree of control.

This Court found it did; the other two appeal courts, Ontario and Saskatchewan, found it did not.

Although the Supreme Court held it was constitutional under the national concern doctrine for

Parliament to establish minimum national standards for GHG pricing stringency, it did not extend

Parliament’s power under the national concern doctrine to regulation of GHG emissions generally:

References re Greenhouse Gas Pollution Pricing Act SCC at paras 168, 199. Therefore, while

Parliament has the right to regulate GHG emissions for any industry or enterprise in a province

over which it has exclusive jurisdiction, it does not have the right under the national concern

doctrine to regulate GHG emissions generally within a province including from intra-provincial

designated projects approved by that province, much less stop such projects from proceeding.

[290] Lest there be any doubt about Parliament’s intentions to regulate GHG emissions from

intra-provincial designated projects, numerous aspects of the Act are directed to exactly that: Act,

s 22(1)(i); s 63(e). Equally patent is that Parliament has given the federal executive the authority

to use the GHG emissions from an intra-provincial designated project to deny the project a positive

interest determination, thereby effectively vetoing it. For example, the federal executive may make

a negative public interest determination if it concludes that the effects of the intra-provincial

designated project hinder Canada’s ability to meet its climate change commitments: Act, s 63(e).¹⁶⁵

Or if its effects involve a change to the environment that would occur in a province outside the

one in which the project is located: Act, s 7(1)(b)(ii). That would necessarily mean all intra-

provincial designated projects since GHG emissions, unless fully captured, escape into the

atmosphere.

[291] That the regulation of GHG emissions from intra-provincial designated projects falls

squarely under specific provincial heads of power is undeniable. The very fact this legislative

scheme exempts in situ projects from the project list where a province has a plan in place to limit

GHG emissions within its province is proof of that. That exemption is premised on the provinces’

jurisdiction to regulate GHG emissions in their own provinces on those subject to their

jurisdiction.¹⁶⁶Nor does this legislative scheme become constitutionally permissible because it

authorizes the federal executive to control GHG emissions project by project rather than overall in

a province.

[292] It is evident from the Act that if the GHG emissions from a given intra-provincial

designated project or province in which it is located exceed whatever the federal government

deems acceptable in the moment, the federal executive can use this as a reason for making a

negative public interest determination. Satisfy the federal executive on these matters and the

164

Reference re Greenhouse Gas Pollution Pricing Act, 2019 SKCA 40 at paras 127-138; Reference re Greenhouse

Gas Pollution Pricing Act, 2019 ONCA 544 at paras 73-74; Reference re Greenhouse Gas Pollution Pricing Act,

2020 ABCA 74 at para 198.

165

This is also to be considered in the Report: Act, s 22(1)(i).

166

GHG emissions can be readily identified and thus regulated at source by the applicable provincial government.

Page: 90

proponent may succeed. But if, for example, the intra-provincial designated project exceeds the

GHG emissions that the federal executive is prepared to accept and a negative public interest

determination is made, the result is an effective end to the project. Could it be any clearer that

Parliament claims the right under this legislative scheme to regulate GHG emissions both in

individual intra-provincial designated projects and thus in individual provinces? We think not.

[293] If Parliament had this power under the national concern doctrine, the consequences for the

division of powers and provincial autonomy would be fatal to both. Why? That degree of federal

power is so pervasive that it would effectively absorb the entire catalogue of provincial powers

and unwind federalism. Virtually everything we do on this planet produces GHG emissions. If

Parliament had regulatory control over GHG emissions generally, there would be almost no aspect

of a province’s economy and the daily lives of the citizens of a province into which it could not

intrude. Indeed, it is hard to imagine what aspects of the economy and daily life would be left for

provincial Legislatures.¹⁶⁷

[294] To bring this down to reality, there are several ways GHG emissions could be reduced. A

few examples, which admittedly are at one end of the extreme, for illustrative purposes only. Limit

the number of children per family.¹⁶⁸Stop eating beef and become vegetarian. Stop drinking dairy

milk. Stop living in single family homes. Limit the square footage a person, couple or family can

occupy. Stop heating homes above a prescribed temperature and stop cooling homes below a

prescribed temperature. Stop using gas appliances. Stop driving vehicles that cannot achieve a

stringent mileage level per litre. Stop driving vehicles of any kind. Stop taking holidays that

involve leaving home by plane, car or bus. Stop eating as much. Stop spending as much on

consumer goods. Shut down all cruise vessels and all plane travel for pleasure. Shut down the dairy

and cattle industry. Shut down all cement plants. Shut down the auto industry and aerospace

industry. Shut down all electrical power generation plants. Shut down the production and export

of coal. And shut down the entire Canadian oil and gas industry.

[295] We recognize that some favour this last option and oppose any further development of oil

and gas resources in this country. Even though Canada continues to import hundreds of millions

of barrels of oil annually. And even though countries such as Norway, with its strong

environmental record, rush to exploit oil and gas resources in recognition of the obvious: if this is

not done with urgency, these resources will become stranded assets. While some may prefer not

to hear this, the inconvenient fact is that Canada will continue to require oil and gas to meet the

daily needs of Canadians for years, measured in double digits, if not three or possibly four decades,

167

As explained in W. R. Lederman, “Unity and Diversity in Canadian Federalism: Ideals and Methods of

Moderation” (1975) 53:3 Can Bar Rev 597 at 610-611: “If ‘labour relations’ were to be enfranchised as a new subject

of federal power by virtue of the federal general power, then provincial power and autonomy would be on the way out

over the whole range of local business, industry and commerce as established to date under the existing heads of

provincial power. The same point can be made about environmental pollution or economic growth ... as unitary

legislative subjects.”

168

Some believe there is no greater threat to climate change than continued expansion of the world’s population.

Page: 91

into the future. And so too will other democratic nations. Moreover, in our fractured world today,

energy security is vital to this country’s national security and that of other democratic nations.

[296] Decisions as to how, where and when to reduce GHG emissions are inherently, and

undeniably, political. This is about making political choices. While Parliament has the right to

make those choices for matters within its exclusive jurisdiction, it does not have the right under

the national concern doctrine to do so for matters falling within exclusive provincial jurisdiction.

Under Canada’s Constitution, those choices are for provincial Legislatures.

[297] Nor does Parliament possess a general treaty-making power. As noted in Attorney-General

for Canada v Attorney-General for Ontario, [1937] AC 326 at 351 [Labour Conventions] in the

context of the division of powers in ss 91 and 92: “there is no such thing as treaty legislation as

such”. As explained by Hogg at §11:12: “The result of the Labour Conventions case is that the

federal Parliament has the power to implement ‘Empire treaties’ under s. 132, but no power to

implement Canadian treaties under s. 132”. Not only is there no freestanding treaty implementation

power under s 91 of the Constitution Act, 1867, there is no “international accord” or “international

undertaking” implementation power either. Accordingly, Parliament cannot impose on the

provinces international accords or undertakings which do not even have the status of treaties

through legislation relating to matters allocated to provincial Legislatures – including the

regulation of intra-provincial activities and emissions therefrom and the development of a

province’s natural resources.¹⁶⁹

[298] Canada also relies on Interprovincial Co-operatives Ltd. et al v R, [1976] 1 SCR 477

[Interprovincial Co-operatives] and Crown Zellerbach in support of its claim that it has the power

under the national concern doctrine to regulate any change to the environment that occurs in one

province from an intra-provincial designated project in another province (Act, s 7(1)(b)(ii)). It

similarly claims authority to regulate changes to the environment that occur outside Canada from

an activity in a province (Act, s 7(1)(b)(iii)), that is the extra-territorial effects of an intra-provincial

designated project, in reliance on Reference re Newfoundland Continental Shelf, [1984] 1 SCR

86 [Newfoundland Continental Shelf].

[299] None of these cases support such a broad extension of the national concern doctrine.

Interprovincial Co-operatives held that Manitoba legislation that purported to regulate the

dumping of mercury in rivers in Saskatchewan and Ontario which flowed into Manitoba was

beyond provincial jurisdiction.¹⁷⁰Crown Zellerbach upheld a federal law which prohibited

dumping of toxic substances in marine waters, including provincial marine waters, under the

169

We recognize that the existence of international agreements can be relevant to the national concern analysis since

they “may in some cases indicate that a matter is qualitatively different from matters of provincial concern”:

References re Greenhouse Gas Pollution Pricing Act SCC at para 149.

170

One takeaway from this case was the majority’s recognition that one province could not, by its laws, require the

shutting down of plants approved and operated in another province in compliance with the laws of that other province.

Page: 92

national concern doctrine. Newfoundland Continental Shelf concluded that Newfoundland did

not have jurisdiction over the continental shelf.

[300] Those cases are readily distinguishable from this case. When it comes to intra-provincial

designated projects, the relevant province is regulating an intra-provincial activity located within

its province; it is not purporting to regulate extra-provincial conduct. Further, the fact provincial

legislation may have an incidental effect beyond its boundaries does not violate territorial

limitations on provincial legislative competence: Global Securities Corp. v British Columbia

(Securities Commission), 2000 SCC 21 at paras 23-24, 38, [2000] 1 SCR 494; British Columbia

v Imperial Tobacco Canada Ltd, 2005 SCC 49 at para 28, [2005] 2 SCR 473.¹⁷¹

(iii) Prohibitions on Matters Affecting Indigenous Peoples of Canada

[301] Section 7(1)(c) prohibits the proponent of a designated project from doing any act or thing

that may cause, with respect to the Indigenous peoples of Canada, an impact resulting from any

change in the environment on “(i) physical and cultural heritage, (ii) the current use of lands and

resources for traditional purposes, or (iii) any structure, site or thing that is of historical,

archaeological, paleontological or architectural significance”. Section 7(1)(d) prohibits any act or

thing that may cause “any change ... to the health, social or economic conditions of the Indigenous

peoples of Canada”. When applied to intra-provincial designated projects, these provisions too

constitute federal jurisdictional overreach.

[302] First, there is no materiality threshold in either prohibition; both apply to any change, even

positive change. Further, unlike ss 7(1)(a), (b) and (c), the prohibitions in s 7(1)(d) need not even

result from a “change to the environment” but apply to “any change occurring in Canada to the

health, social or economic conditions of the Indigenous peoples of Canada”. This expands the

scope of this prohibition to an almost unlimited extent. Moreover, since these prohibitions apply

to any changes, that is “any effects”, they suffer from the same overreach identified earlier vis à

vis Parliament’s claimed jurisdiction over all effects from intra-provincial designated projects.¹⁷²

[303] Second, Canada’s claimed jurisdiction over any effects of any intra-provincial designated

project as it relates to Indigenous peoples resulting, for example, from any change to the

“environment” that has an impact on “the current use of lands and resources for traditional

purposes” or any change “to the health, social or economic conditions of the Indigenous peoples

of Canada” contradicts the fundamental principle that provincial laws of general application apply

171

Similarly, as explained in Reference re Upper Churchill Water Rights Reversion Act, [1984] 1 SCR 297 at 332:

“Where the pith and substance of the provincial enactment is in relation to matters which fall within the field of

provincial legislative competence, incidental or consequential effects on extra-provincial rights will not render the

enactment ultra vires.”

172

This goes beyond what was authorized in Oldman River. “The dam on the Oldman River had an effect on navigable

waters, fisheries and lands reserved for the Indians (there was an Indian reserve downstream from the dam site). These

effects justified a wide-ranging environmental assessment encompassing the impact of the dam on those three subject

matters”: Hogg §30:32.

Page: 93

to “Indians, and Lands reserved for the Indians”.¹⁷³The IAA improperly extends Parliament’s

reach to “effects” of intra-provincial designated projects on Indigenous peoples from outside

reserve lands where those effects have to do with them as people and residents of the subject

province and are not related to their “Indianness”. Parliament does not have the power under

s 91(24) to exempt “Indians” and the lands on which they live from provincial laws of general

application: compare Siksika Health Services v Health Sciences Association of Alberta, 2019

ABCA 494 at para 39, 99 Alta LR (6th) 73.

[304] If Canada were correct that Parliament’s jurisdiction over “Indians, and Lands reserved for

the Indians” extended to any “effects” (as Parliament has self-defined them) from any intra-

provincial designated project on “the health, social or economic conditions” of the Indigenous

peoples of Canada or on any change to the “environment” that has an impact on “the current use

of lands and resources for traditional purposes” by the Indigenous peoples of Canada, there would

be virtually no intra-provincial activity in this country that would be free of federal oversight,

regulation and veto since the Indigenous peoples of Canada populate the landscape across this

country and are involved in all dimensions of Canadian society. Under this theory, provincial

jurisdiction over intra-provincial activities would be rendered meaningless.

[305] Third, through this legislative scheme, Parliament has done something else it has no

jurisdiction to do under the division of powers. That is to convert Aboriginal and treaty rights

under s 35 into a veto by the federal executive. Parliament has done so by giving the federal

executive the right to effectively veto an intra-provincial designated project. But where Aboriginal

and treaty rights are engaged with respect to an intra-provincial designated project, Parliament

does not have the constitutional right to second guess a provincial government’s compliance with

its duty under s 35.

[306] Assume that a province, in compliance with the province’s constitutional obligations,

enters into an agreement either directly with an Indigenous entity respecting an intra-provincial

designated project that the Indigenous group regards as beneficial and in its interests or with the

Indigenous entity and the proponent of the project. Under the IAA, that project can be sidelined

indefinitely and ultimately terminated through a negative public interest determination by the

federal executive. For those detailed provincial obligations, Canada would substitute its assurance

to the Indigenous entity that what Parliament is doing under the IAA is in its interests in light of

their legislative power relating to “Indians, and Lands reserved for the Indians”. In such

circumstances, the rug would have been pulled out from under the exercise of provincial legislative

and constitutional authority to (a) authorize the intra-provincial designated project and (b) enter

into an agreement with the Indigenous entity and, if applicable, proponent in question. The

provincial Crown would have honoured its relationship with the Indigenous entity, but it would be

worth nothing to them.

173

See Act, s 7(1)(c)(ii) and s 7(1)(d).

Page: 94

[307] Parliament’s jurisdiction under s 91(24) does not include subjecting any agreement

involving the provincial government and an Indigenous entity with respect to an intra-provincial

designated project to federal government oversight and approval. The province’s duty to consult

and accommodate to the extent necessary and appropriate is with the Indigenous entity involved,

not with the federal government. And it is the courts, not the federal government, that determine

whether a provincial government has met its constitutional duty under s 35 to Indigenous peoples.

[308] Fourth, regardless of whether Aboriginal or treaty rights are involved, Parliament’s

jurisdiction under s 91(24) does not include substituting federal authority for the rights of

Indigenous peoples to make their own agreements with provincial governments or with proponents

of intra-provincial designated projects. And yet, through the IAA, Parliament invokes its own

obligations towards Indigenous people under s 91(24) of the Constitution Act, 1867 to override not

only provincial legislative powers and duties but also an agreement entered into by an Indigenous

entity with the proponent and province or with the proponent and approved by the province or

provincial authority.

[309] Since there are hundreds of First Nations, it is likely that some intra-provincial designated

projects will be viewed as positive by some Indigenous peoples, and negative by others. This was

the case with the Indigenous intervenors on this Reference, some of whom supported Alberta’s

position and others, Canada’s.

[310] This legislative scheme allows a proponent of an intra-provincial designed project to cause

a change that “is not adverse” to the health, social or economic conditions of an “Indigenous group,

community or people” with the agreement of the council, government or other entity authorized to

act on their behalf: Act, s 7(4). In other words, the proponent and affected Indigenous entity are

precluded from entering into an agreement that would authorize any “adverse” change to the

matters identified in s 7(1)(d) even if insignificant and even if offset by some other consideration.

The result – the proponent of an intra-provincial designated project supported by an Indigenous

entity, which may even have an ownership interest in the project, cannot cause any “adverse”

change to matters in s 7(1)(d) even where the project would provide overall benefits to the affected

Indigenous entity, and with their agreement.

[311] Further, with respect to s 7(1)(c), there is no provision to allow for a proponent to cause a

change thereunder even with the agreement of the affected Indigenous entity. The result – the

proponent of an intra-provincial designated project cannot cause any change whatever to matters

in s 7(1)(c) even if the changes are positive and agreed to by the affected Indigenous entity.

[312] Moreover, the IAA gives the final say to the federal executive, not the Indigenous entity. In

particular, the federal executive is authorized to stop any intra-provincial designated project based

on its view of the effects of that project on the interests of an Indigenous group or on its view of

the public interest generally notwithstanding the view of that group. That is so whether Aboriginal

or treaty rights are, or are not, directly involved.

Page: 95

[313] A number of First Nations oppose the prohibitions in ss 7(1)(c) and (d) and raise arguments

related to the legal effects of those provisions. The intervenor Woodland Cree noted that the Truth

and Reconciliation Commission found that reconciliation includes the economic development of

Indigenous peoples. This Court has previously stressed that economic development on reserve

lands is in the public interest: AltaLink Management Ltd v Alberta (Utilities Commission), 2021

ABCA 342 at para 59. The Woodland Cree contend the IAA reduces their voice in decisions

regarding their own natural resources, provides excessively broad public participation rights on

their projects and potentially negates their ability to develop their natural resources.

[314] The intervenor Indian Resource Council, which represents oil and gas producing First

Nations, submits that the right to produce minerals, including hydrocarbons, on their lands, is as

much an Aboriginal right as hunting, fishing and gathering rights and is protected by s 35 of the

Constitution Act, 1982. In its view, the production of hydrocarbons is not inherently an adverse

change to the health, social and economic conditions of Indigenous peoples and can provide

positive changes to their lives. The Indian Resource Council also asserts that Indigenous peoples

have an Aboriginal right “to improve their economic and social conditions through the creation of

economic activity and the realization of economic rents from the production of hydrocarbons”:

Factum at para 17. In its view, the IAA “grants both de jure and de facto veto power over any

particular project to the Governor in Council”: Factum at para 13. We agree. It does.

[315] That this legislative scheme permits the federal executive to stop intra-provincial

designated projects authorized by a province or provincial authority even where agreements have

been made by an Indigenous entity with either or both the provincial government and project

proponent and with provincial approval again constitutes federal overreach. It also underscores

that the true purpose of this legislative scheme is to empower the federal executive to veto intra-

provincial designated projects based on its view of the public interest, not what is in the interests

of the Indigenous entity involved, never mind the interests of the province in question and its

citizens.

[316] The preamble in the Act states that Canada is committed to “ensuring respect for the rights

of the Indigenous peoples of Canada  and to fostering reconciliation and working in partnership

with them”. Restricting what Indigenous peoples are permitted – and not permitted – to do of their

own accord through the prohibitions in ss 7(1)(c) and (d) smacks of paternalism. Indigenous

peoples have suffered the sting of paternalism since the 19^thCentury: see for example the history

set out in McDiarmid Lumber Ltd. v God’s Lake First Nation, 2006 SCC 58 at paras 46-68,

[2006] 2 SCR 846. The autonomy of Indigenous peoples includes their ability, via their leadership,

to make lawful arrangements with provincial authorities and proponents of intra-provincial

designated projects for what they consider to be in their best interests. Section 91(24) provides no

constitutional basis for Parliament’s imprisoning Indigenous peoples in their own Aboriginal and

treaty rights.

(iv)

Additional Prohibitions

Page: 96

[317] Finally, the proponent of a designated project is prohibited from causing “any change to a

health, social or economic matter within the legislative authority of Parliament that is set out in

Schedule 3”: Act, s 7(1)(e). While nothing has yet been specified in Schedule 3, the Act authorizes

the addition of any health, social or economic matter without limitation by order of the Governor

in Council: Act, s 7(2). The potential scope of this legislative delegation is immense and no link to

an adverse effect on the environment is required.

(v)

Term and Effect of the Prohibitions

[318] The prohibitions imposed by s 7 continue to apply: (1) throughout the review process,

except where the Agency decides no impact assessment is required or permits certain acts to be

done for information gathering purposes: Act, s 7(3)(a), s 7(3)(c); and (2) indefinitely, unless the

proponent complies with any conditions imposed in a decision statement issued under s 65: Act,

s 7(3)(b).¹⁷⁴

[319] Canada argues that the s 7 prohibition is merely a “temporary hold”. That argument is

without merit. The net effect of these provisions is that a proponent of an intra-provincial

designated project cannot ever realistically proceed with that project, conditionally or otherwise,

without a positive public interest determination. In the absence of that positive determination, the

federal executive has no obligation to set out any conditions that the proponent would need to meet

to proceed with the intra-provincial designated project. That is so whether the project requires a

federal permit or not. The result is that without a positive public interest determination, the

prohibitions remain in effect and the “temporary hold” becomes a “permanent hold”.

d.

Exercise of Federal Regulatory Power

[320] As noted, s 8(b) of the Act prohibits a federal authority from exercising any power or

performing any duty that could permit a designated project to be carried out in whole or in part

until the IAA review has been completed and until a positive public interest determination has been

made. The legal effect of this provision is that, where an intra-provincial designated project

requires a federal permit, a federal authority is forbidden from setting conditions under which that

permit will be issued unless and until the federal executive makes a positive public interest

determination: ss 8(b), 60(1), 62. Then, and only then, is the federal executive under any obligation

to identify the conditions that a proponent must meet: s 64(2). And then, and only then, is the

proponent of the intra-provincial designated project able to seek and secure any required federal

permit under other federal legislation.

e.

Requirement for Public Interest Determination by the Federal Executive and

Consequences if Determination Is Not Positive

(i)

Key Decision Under the IAA

174

This presupposes that a decision has not been made at the outset that no review process is required.

Page: 97

[321] At the heart of the regulatory process under the IAA lies the public interest determination.¹⁷⁵

(ii)

Public Interest Determination by the Federal Executive

Public Interest Determination Is Based on the Intra-Provincial Designated Project as a Whole

[322] Alberta, Saskatchewan and Ontario contend that the federal executive’s public interest

determination when applied to intra-provincial designated projects – and therefore whether an

intra-provincial designated project is able to proceed – is based on its assessment of the designated

project as a whole having regard to federal priorities and policies. Canada disagrees. It argues that

the Minister and Governor in Council do not consider whether the designated project as a whole

is in the public interest but rather whether the adverse federal effects are in the public interest.

According to Canada, this is done by considering all the positive and negative effects arising out

of a proposed project and comparing them to the adverse federal effects to determine if the adverse

federal effects are in the public interest.

[323] The Minister is required to consider a Report prepared by the Agency and make the public

interest determination set out in s 60(1) or refer that determination to the Governor in Council for

its consideration under s 62. Section 60(1) provides:

After taking into account the report with respect to the impact

assessment of a designated project ..., the Minister must

(a) determine whether the adverse effects within

federal jurisdiction — and the adverse direct or

incidental effects — that are indicated in the report

are, in light of the factors referred to in section 63

and the extent to which those effects are significant,

in the public interest; or

(b) refer to the Governor in Council the matter of

whether the effects referred to in paragraph (a) are,

in light of the factors referred to in section 63 and

the extent to which those effects are significant, in the

public interest. [Emphasis added]

175

Other decision-making points from which legal effects flow include (a) the Minister’s notice prior to

commencement of the assessment process advising either that the federal authority will not be exercising a power

required for that designated project to be carried out or that the Minister is of the opinion that the designated project

would cause unacceptable environmental effects within federal jurisdiction and the basis for this opinion (Act, s 17(1));

(b) a determination by the Agency whether an impact assessment is required (Act, s 16); and (c) conduct of the impact

assessment by the Agency or review panel and preparation of the Report (Act, ss 18-57).

Page: 98

[324] Where a Report is prepared by a review panel, the Minister is required to refer that

determination to the Governor in Council: Act, s 61(1). Section 62 sets out terms for the public

interest determination by the Governor in Council that are identical to those prescribed for the

Minister under s 60(1)(a):

If the matter is referred to the Governor in Council under paragraph

60(1)(b) or section 61, the Governor in Council must, after taking

into account the report with respect to the impact assessment of the

designated project that is the subject of the referral, determine

whether the adverse effects within federal jurisdiction — and the

adverse direct or incidental effects — that are indicated in the report

are, in light of the factors referred to in section 63 and the extent to

which those effects are significant, in the public interest. [Emphasis

added]

[325] The legal effect of all relevant provisions is that, in making a public interest determination

with respect to an intra-provincial designated project, both the Minister and Governor in Council

will necessarily determine whether the project overall is in the public interest having regard to

federal priorities and policies.

[326] First, the definitions of “effects” and “environment” are so broad and all encompassing that

the public interest determination must, of necessity, include a consideration of the effects of the

intra-provincial designated project as a whole. Indeed, one of the rationales for this legislative

scheme is to assess the designated project as a whole. A determination whether the adverse federal

effects are in the public interest cannot be made without considering whether the intra-provincial

designated project itself is in the public interest. The two are inextricably linked. It is only if the

public interest determination, taking into account all of the effects of the project, is positive that it

would be possible to conclude that “adverse effects within federal jurisdiction” could be in the

public interest. After all, how could adverse federal effects ever be in the public interest unless the

public interest in the project overall outweighed those adverse federal effects?¹⁷⁶To put it another

way, in assessing whether “adverse effects” are in the public interest, the obvious question is

“compared to what”? The comparison here, even under Canada’s own formulation, is to the

designated project overall, that is all its positive and negative effects.

[327] Second, what is implicit in ss 60 and 62 – namely that the federal executive has the right

in making its public interest determination to do so based on whether the effects of the designated

project overall are in the public interest – is made explicit in s 64. Section 64(1), which is linked

back to the determinations made by the Minister or Governor in Council under ss 60(1)(a) or 62,

provides as follows:

If the Minister determines under paragraph 60(1)(a), or the

176

La Forest J made essentially the same point in Oldman River.

Page: 99

Governor in Council determines under section 62, that the effects

that are indicated in the report that the Minister or the Governor in

Council, as the case may be, takes into account are in the public

interest, the Minister must establish any condition that he or she

considers appropriate in relation to the adverse effects within federal

jurisdiction with which the proponent of the designated project must

comply. [Emphasis added]

[328] This section distinguishes between the “effects” in the Report which relate to the whole

project, both positive and negative, since that is what must be included in the Report and the

“adverse effects within federal jurisdiction”. In doing so, it makes it clear that it is only if the

Minister or Governor in Council have determined that the “effects” are in the public interest that

the Minister must then establish any condition in relation to the “adverse effects within federal

jurisdiction”. In other words, s 64 explicitly contemplates that the Minister’s and Governor in

Council’s determination under s 60 and s 62 respectively regarding the public interest will be based

on the “effects” of the designated project as a whole: see s 64(1).¹⁷⁷

[329] Third, s 8 makes it clear that the public interest determination is based on the effects of the

whole project, and not merely adverse federal effects. Section 8 precludes a federal authority from

issuing a permit or authorization that could permit a project to be carried out unless the decision

statement issued by the Minister sets out that “the effects that are indicated in the report with

respect to the impact assessment of that project are in the public interest”. As noted, the Report

must include all the effects of the designated project, not merely the adverse federal effects.

Public Interest Determination Must Include Mandatory Factors

[330] In any event, the public interest determination extends beyond the adverse federal effects

of an intra-provincial designated project regardless. The reason – the Act explicitly requires that

the public interest determination by the Minister and Governor in Council must be based not only

on the Report but also the s 63 mandatory factors. The breadth of these mandatory factors too

belies Canada’s narrow characterization of what the federal executive’s public interest

determination involves. Section 63 provides:

The Minister’s determination under paragraph 60(1)(a) in respect of

a designated project referred to in that subsection, and the Governor

in Council’s determination under section 62 in respect of a

designated project referred to in that subsection, must be based on

the report with respect to the impact assessment and a consideration

of the following factors:

177

Similarly, s 64(2) distinguishes between the effects indicated in the Report and the direct or incidental effects and

it is only if the effects are found to be in the public interest, which here too must necessarily mean the effects of the

project overall, that the Minister is then obligated to establish the conditions directly linked or necessarily incidental

to the issuance of a federal permit by a federal authority.

Page: 100

(a) the extent to which the designated project contributes to

sustainability;

(b) the extent to which the adverse effects within federal jurisdiction

and the adverse direct or incidental effects that are indicated in the

impact assessment report in respect of the designated project are

significant;

(c) the implementation of the mitigation measures that the Minister

or the Governor in Council, as the case may be, considers

appropriate;

(d) the impact that the designated project may have on any

Indigenous group and any adverse impact that the designated

project may have on the rights of the Indigenous peoples of Canada

recognized and affirmed by section 35 of the Constitution Act, 1982;

and

(e) the extent to which the effects of the designated project hinder or

contribute to the Government of Canada’s ability to meet its

environmental obligations and its commitments in respect of climate

change. [Emphasis added]

[331] When applied to intra-provincial designated projects, these s 63 mandatory factors

demonstrably go beyond matters actually within federal jurisdiction under the division of

powers.¹⁷⁸

Conclusions Regarding Scope and Content of Public Interest Determination

[332] For these reasons, however one expresses the process leading to the federal executive’s

public interest determination – whether the public interest in proceeding with the intra-provincial

designated project overall is sufficient to overcome the adverse federal effects, or whether it is in

the public interest to proceed with the project despite the adverse federal effects, or whether the

adverse federal effects are in the public interest – the end result is the same. The federal executive

is empowered to determine, in the exercise of its unilateral discretion, whether the project overall

is in the public interest.

178

Three of the s 22 mandatory factors are identical to the s 63 mandatory factors: ss 22(1)(c), (h) and (i). Both the s

22 and s 63 mandatory factors include ones that go directly to the project overall: the extent to which the designated

project contributes to sustainability (s 22(1)(h), s 63(a)); and the extent to which the effects of the designated project

hinder or contribute to the Government of Canada’s ability to meet its environmental obligations and its commitments

in respect of climate change (s 22(1)(i), s 63(e)).

Page: 101

[333] In doing so, it assesses the intra-provincial designated project overall and determines

whether its effects (which will of necessity include all its positive and negative effects) outweigh

the adverse effects claimed to be within federal jurisdiction sufficiently to warrant a favourable

public interest determination having regard as well to the mandatory factors. The fact the public

interest determination includes a consideration of adverse federal effects does not change this

fundamental aspect of this legislative scheme. In other words, the effects of the intra-provincial

designated project overall are an inescapable part of the federal executive’s public interest

determination. What is equally inescapable is that the federal executive’s determination of whether

the project is in the public interest will be made having regard to federal priorities and policies.

That is evident from both the mandatory factors to be considered and the scope of the adverse

federal effects.

[334] However, Parliament has no constitutional right to empower the federal executive to use a

negative public interest determination, based on mandatory factors and effects, a number of which

are not linked, or not sufficiently linked, to federal heads of power, to prohibit an intra-provincial

designated project from proceeding. And yet, that is exactly the effect of this legislative scheme.

This constitutes fatal federal jurisdictional overreach.

[335] For example, an intra-provincial designated project aimed at developing Saskatchewan’s

natural resources might cause a minor adverse impact on fish or fish habitat to a degree otherwise

permissible under federal law such that no federal permit was required.¹⁷⁹If that minor adverse

federal effect were the only consideration, one would expect there would be no basis to make a

negative public interest determination. Under the Act, however, if the Minister were of the view

that the intra-provincial designated project would hinder Canada’s ability to meet its climate

change commitments, the Minister could conclude that the adverse federal effects on fish or fish

habitat were not offset by any net benefit of the project as a whole when viewed from the

perspective of Canada’s treaty obligations and therefore, such effects were not in the public

interest. The end result would be that the intra-provincial designated project that did not even

require a federal permit would be prevented from proceeding with the minor effect on fish or fish

habitat otherwise permissible under federal law essentially acting as a “hook” to anchor the

negative public interest determination and stop the project.

[336] Further, unlike the Guidelines Order under which any conditions that could have been

imposed were contained in valid federal legislation relating to permits or authorizations, the IAA

permits the imposition of any conditions the Minister “considers appropriate in relation to the

adverse effects within federal jurisdiction”: Act, s 64(1). Since adverse federal effects are not all

within Parliament’s jurisdiction, this too constitutes impermissible federal overreach when applied

to intra-provincial designated projects.

179

A permit is required under the Fisheries Act for any work, undertaking or activity, other than fishing, that “results

in the death of fish” or the “harmful alteration, disruption or destruction of fish habitat”. This Act prohibits an effect

on fish habitat by an intra-provincial designated project even where the effects are so minor that they do not even

result in the death of fish or the harmful alteration, disruption or destruction of fish habitat. Otherwise, the project

would require a federal permit under the Fisheries Act.

Page: 102

Public Interest Determination and Oldman River

[337] Canada argues that Oldman River is authority for the validity, and use, of the public interest

determination under this legislative scheme vis à vis intra-provincial designated projects. This

argument cannot withstand scrutiny.

[338] To unpack why, we start with this. In deciding whether to grant a proponent of an intra-

provincial designated project a federal permit, the federal government is entitled to consider the

public interest in the project overall. As La Forest J pointed out in Oldman River at 39, it would

be difficult to understand how the federal government could decide that a federal permit under the

Navigable Waters Protection Act could be issued notwithstanding “harm” to navigable waterways

unless the public interest in proceeding with the project warranted issuance of a federal permit.¹⁸⁰

Thus, he made it clear that whether the project overall was in the public interest could be used to

grant a federal permit.

[339] But notably, La Forest J did not state that if the federal government decided that a project

was not in the public interest, that could be used to deny a federal permit. The theory that the

results of a public interest assessment should work both ways holds to the view that if the federal

government can use a positive public interest determination to grant or relax a federal permit, it

should be able to use a negative public interest determination to deny the federal permit.

[340] However, this presupposes an equivalency between the two positions. Arguably, there is

not. In the first case, the federal government is using a positive public interest determination as a

reason to “stand down” from a veto it could otherwise use under one of its heads of power and

instead support an intra-provincial designated project approved by the province. In doing so, the

federal government remains within its constitutional lane. Nor is it harming any core competence

of the provincial government. But the reverse is not necessarily so on either count.

[341] The federal government’s power to deny a federal permit must be exercised for the right

reasons. A denial must be based on the effects of the intra-provincial designated project on the

federal head of power engaged, not on a negative public interest determination grounded in factors

and considerations untethered to the head of power. Were the denial based on factors and

considerations other than the actual effects of the project alone on, for example, the fisheries, the

federal government would be operating outside its constitutional lane.¹⁸¹In such circumstances, it

180

“If the significance of the impact on marine navigation were the sole criterion, it is difficult to conceive of a dam

of this sort ever being approved. It is clear, then, that the Minister must factor several elements into any cost-benefit

analysis to determine if a substantial interference with navigation is warranted in the circumstances”: Oldman River

at 39.

181

As explained in Kennett at 200-201 with respect to an intra-provincial dam and Parliament’s limited jurisdiction

to address the consequences of the dam for areas of federal responsibility: “While Parliament can, of course, veto the

dam, respect for the limits of restricted jurisdiction requires that it only do so for reasons related to its areas of

Page: 103

would be using the federal executive’s assessment of the public interest overall to deny the federal

permit even if the actual effects of the project on a federal head of power did not warrant the denial.

After all, if the effects on the fisheries themselves were sufficient to justify the denial, the federal

government would have no reason to rely on a public interest assessment rooted in policies and

priorities extraneous to the effects on the fisheries.

[342] Take for example “the extent to which the designated project contributes to sustainability”,

one of the s 63 mandatory factors. Or the “need for the designated project”, one of the s 22

mandatory factors that must be considered in the Report. Both go into the federal executive’s

public interest determination. There is an issue whether these mandatory factors would be relevant

to the valid exercise of the federal government’s discretion vis à vis a permit under the Fisheries

Act. And a related issue is whether the federal government would be doing indirectly what it could

not do directly, that is veto an intra-provincial designated project based not on the effects of the

project on the fisheries but on federal priorities and policies unrelated to the valid exercise of

discretion.

[343] Whatever the answer to whether the federal executive’s public interest determination can

be validly used to deny a federal permit for an intra-provincial designated project, this legislative

scheme runs afoul of the division of powers regardless. The IAA catapults well past intra-provincial

designated projects that require a federal permit. Parliament could easily have restricted the IAA

to intra-provincial designated projects in respect of which it actually has some decision-making

authority. It did not. And deliberately so. It has expressly included in the project list intra-

provincial designated projects that do not require a federal permit, that is those in respect of which

it has no decision-making authority.

[344] More important, the public interest determination under the IAA is far removed from what

was approved in Oldman River. Under this legislative scheme, there is no required link between

the public interest determination by the federal executive and a federal permit. Nor is there even

any required link between the public interest determination and the exercise of a federal head of

power. In all instances, the public interest determination by the federal executive is not being made

as part of deciding whether a federal permit should be granted or denied. It stands separate and

apart from that entirely. It is being made by the federal executive in deciding whether to permit

the intra-provincial designated project to proceed or to stop it. Simply, Parliament has authorized

the federal executive to make its public interest determination based on certain mandatory factors

and effects that are not all linked to a federal head of power, or even if linked, not sufficiently

linked, to a federal head of power.

[345] Oldman River was not an invitation to Parliament to do indirectly through a public interest

assessment by the federal executive what it cannot do directly under the division of powers, namely

authority.... [O]nce the [environmental assessment] considers the full range of environmental effects, it risks

transforming restricted jurisdiction (based on the dam’s consequences for fisheries) into de facto comprehensive

jurisdiction, enabling the federal government to base its refusal to issue a Fisheries Act licence on its view of the

dam’s costs in areas of provincial jurisdiction.”

Page: 104

veto an intra-provincial designated project where the veto is not linked to the proper exercise of

federal decision-making authority with respect to that project. That decision-making authority

under valid and applicable federal legislation establishes that an aspect of the intra-provincial

designated project actually falls within a federal head of power under the Constitution.

The Federal Executive – Effective Veto Over Intra-Provincial Designated Projects

[346] What then does all this mean? Just this. Through this legislative scheme, Parliament has

granted the federal executive what amounts to an effective veto over all intra-provincial designated

projects in this country. While the IAA does not use the word “veto”, the combination of the

requirement for a positive public interest determination and the continued prohibitions, fines and

injunctions speak for themselves. No intra-provincial designated project can proceed without the

express approval of the federal executive. That the federal executive never utters the word “veto”

is irrelevant. Because by not making a positive public interest determination, it is effectively

vetoing the intra-provincial designated project. Thus, the theory that the federal executive is not

vetoing an intra-provincial designated project when it makes a negative public interest

determination cannot be sustained.

[347] Put succinctly, even where the federal government has no decision-making authority with

respect to an intra-provincial designated project, the federal executive can stop – that is veto – that

project unless it decides that the intra-provincial designated project is in the public interest based

on federal priorities and policies. That is beyond Parliament’s jurisdiction under Canada’s

Constitution.

f.

Time Limits for Assessments and Decision Statements

[348] CEAA 2012 first introduced legislated time limits for environmental assessments. Neither

the Guidelines Order nor CEAA 1992 had prescribed time limits.¹⁸²CEAA 2012 specified that

certain stages of an environmental assessment were to be completed within a certain number of

days, subject to extension: CEAA 2012, ss 10, 27(2), 54(2).

[349] The Act also provides for legislated time limits. But two critical points should be noted.

First, the length of the review process has been extended considerably.¹⁸³Under CEAA 2012, if a

federal impact assessment proceeded without any extensions of time, the maximum length of time

it could take for the assessment to be completed was 13.5 months by the Agency and 2 years and

4 months by a review panel. By contrast, the corresponding times under the Act for an assessment

by the Agency is now 4 years and 5 months (where the decision is by the Minister) and 4 years

and 7 months (where the decision is by the Governor in Council). And where the assessment is by

182

Generally, under both, an environmental assessment was to start as early as possible and conclude before any

regulatory decision-making: see Guidelines Order, s 3; CEAA 1992, s 11.

183

The proponent now has three years to provide the information the Agency sets out in its notice of commencement

of the impact assessment: Act, s 19(1). That is necessarily linked to the extent of the information demanded.

Page: 105

a review panel, the time is 4 years and 7 months (where the decision is by the Minister) and 5

years and 5 months (where the decision is by the Governor in Council).

[350] Second, under the Act, the Governor in Council may extend a number of key time limits

repeatedly and indefinitely.¹⁸⁴The Agency is given almost a year after it receives all required

information to submit its Report to the Minister.¹⁸⁵But the Act gives the Minister and then the

Governor in Council the authority to extend the prescribed time limit by which the Agency must

do so, and in the case of the Governor in Council, that extension may be “any numbers of times”.¹⁸⁶

The result: there is no effective deadline by which the Agency must provide its Report to the

Minister. That is also so if a review panel conducts the impact assessment. Here too, there is no

effective deadline by which the review panel must provide its Report.¹⁸⁷

[351] On receipt of a Report, the Minister must (a) make a determination with respect to the

public interest; or (b) refer this determination to the Governor in Council.¹⁸⁸That leads in turn to

a “decision statement” which must be issued by the Minister within a certain number of days after

the Report, or summary of it, is posted on the Internet site informing the proponent of the public

interest determination. The time limit is no later than 30 days for the Minister’s decision and 90

days for the Governor in Council decision. But again, these time limits too may be extended

initially up to a maximum of 90 days for any reason the Minister considers necessary: Act, s 65(5).

And again, under s 65(6), the concept of a definitive time limit is erased since it provides that the

Governor in Council may, on the recommendation of the Minister, “extend the time limit extended

under subsection (5) any number of times”.

[352] All this being so, there are no finite time limits within which the Minister and Governor in

Council must make a public interest determination with respect to an intra-provincial designated

project and the Minister issue a decision statement relating thereto.

184

See the Act, ss 28(5)-(7), 37(2)-(4), 65(6).

185

The Agency must provide the Report no later than 300 days after the day on which it posts the notice under s 19(4)

on the Internet site: s 28(2).

186

Under s 28(6) of the Act, the Minister may extend the time for provision of this Report by any period up to a

maximum of 90 days for certain purposes. But under s 28(7) of the Act, if the Minister so recommends, the Governor

in Council may extend the extended 90 day time limit under s 28(6), “any number of times”.

187

A review panel must submit its Report to the Minister within 600 days unless the Agency is of the opinion that

more time is required for certain purposes: s 37(2). The Minister may extend this time limit up to a maximum of 90

days: s 37(3). This extended time limit may, if the Minister recommends, be extended by the Governor in Council

“any number of times”: s 37(4). That is also so where the Minister refers a designated project to a review panel under

s 43: Act, s 37.1.

188

Under s 61(1), where the Minister receives a Report from a review panel (under s 55) or from the Agency (under

s 59, where the review panel has been terminated), the Minister, in consultation with the responsible Minister, must

refer the determination of the “public interest” directly to the Governor in Council.

Page: 106

g.

Consultation with Other Jurisdictions

[353] The Act contemplates the possibility of consulting with other jurisdictions at various stages

of review of a designated project.¹⁸⁹The Minister can also approve the substitution of another

jurisdiction’s review process provided certain conditions are met: Act, s 31. And the Minister can

enter into an agreement with another jurisdiction (including a province) for the establishment of a

joint review panel: Act, s 39.

[354] However, many of these provisions are subject to a number of constraints. For example,

under s 31, the Minister may approve the substitution of another jurisdiction’s assessment process

for the federal process, but only if the Minister is satisfied, amongst other things, that the

substituted process will consider the s 22 mandatory factors. Of course, that compels the provinces

themselves to place on the scale factors which lie at the root of the constitutional challenge to the

IAA. In other words, unless the province is prepared to consider all the mandatory factors the

federal government demands, there can be no substituted process. Further, the Minister cannot

even approve a substitution if the impact assessment has been referred to a review panel.¹⁹⁰

[355] In any event, the potential for consultation and substitution does not affect the validity of

the challenged legislative scheme under the division of powers. Cooperative federalism does not

override or modify the division of powers: Rogers Communications at para 39.

3.

Practical Effects of the IAA

[356] Efficacy of legislation is not relevant to a division of powers analysis; it does not advance

the pith and substance inquiry: Ward v Canada (Attorney General), 2002 SCC 17 at para 26,

[2002] 1 SCR 569. That said, there is a difference between efficacy of a statute and its practical

effects. Efficacy goes to the effectiveness of the means chosen to achieve the identified legislative

purpose; practical effects to the actual impact of the legislation on those subject to it. Therefore,

while courts do not have either the institutional capacity or legitimacy to decide whether a statute

is a “good idea”, the practical effects of the legislation remain relevant in a division of powers

analysis.

[357] The practical effects of this legislative scheme are also fatal to the putative federal

jurisdiction vis à vis intra-provincial designated projects.

a.

Delay

189

The Agency is required, when preparing for a possible impact assessment of a designated project, to offer to consult

with any jurisdiction that has powers in relation to an environmental assessment of the project and with any Indigenous

group that may be affected by the project: Act, s 12. The Agency, or the Minister if the impact assessment of a

designated project has been referred to a review panel, is required to offer to consult with any jurisdiction that has

powers in relation to an environmental assessment of the project: Act, s 21.

190

Or if the project includes activities regulated under certain other federal legislation.

Page: 107

[358] It is indisputable that one of the practical effects of the Act is delay. Given the structure of

this legislative scheme, this is not surprising.

[359] At every point that counts, when a step is to be taken or a decision is to be made by the

Minister or Governor in Council, there is no enforceable deadline by which that step or decision

must be made.¹⁹¹In particular, there is no requirement that the decisive decision-making step, the

issuance of a “decision statement”, which includes the public interest determination, will be made

by the Minister or Governor in Council within any finite time frame, reasonable or not. Instead,

the Act permits an endless loop of delay.

[360] Intra-provincial designated projects can be killed under this Act in different ways. A

negative public interest determination by the federal executive is one way. But it is not the only

one. Death by delay will do so as well.

[361] In the commercial world, no responsible investor is willing to wait for years, much less

indefinitely, for an answer on whether required approvals are forthcoming. Why would they? By

that point, they will have invested substantial funds, likely measured in the millions, along with

the attendant manpower, complying with prescribed environmental impact assessments, whether

by one or both levels of government. And where natural resources are concerned, they will also

likely have spent substantial funds acquiring leasehold interests in those resources.

Understandably, they would anticipate an answer, and within a reasonable time. And while they

have no legal entitlement to demand either, one would expect the federal government would be

interested in providing one.

b.

Uncertainty

[362] Another practical effect of this statutory regime is uncertainty. If there were one

consideration above all that militates strongly against investment in any country, it is uncertainty.

Investors crave certainty. Those investing in intra-provincial designated projects need to know,

and be able to rely on, the ground rules that apply to a proposed project. This is especially so where

those investments would potentially be measured in billions of dollars. Further, while Canada

remains an importer of foreign capital, capital flow works both ways. Investors, both foreign and

domestic, can vote with their feet if a country is not competitive on the investment front.

Predictability and reliability of investing rules are essential to Canada’s economic success in an

integrated world.

[363] Of course, it is a given that all regulatory processes will involve some elements of

uncertainty about the outcome. But under this legislative scheme, the problem is the process itself.

Uncertainty infects every step of the process. Moreover, the proponent may find itself locked

191

As noted, that is so for the Agency and review panel as well.

Page: 108

inside disputes between the federal and provincial governments. Investors understandably have no

interest in being involved in inter-jurisdictional disputes.

[364] Add to this that the proponent has no idea what conditions may be imposed under what

claimed federal heads of power for the intra-provincial designated project to proceed. Typically,

when a proponent intends to proceed with a project, that involves identifying what must be done

to comply with conditions likely to be imposed to proceed with the project and obtain any required

federal permits. But under this legislative scheme, the federal executive has no obligation to

identify any potential conditions unless it makes a positive public interest determination – even

where the intra-provincial designated project has already been approved, and permits issued, by

the provincial government.

[365] All of this substantially increases regulatory risk and cannot help but negatively impact

investor confidence and capital investment in Canada. Potential investors might well view the IAA

as the poster child for “invest in this country at your peril”.

c.

No Practical Remedy to Review Federal Action/Inaction

[366] A third practical effect of this statutory scheme relates to judicial review. Canada and its

supporters submit that should the federal government overshoot the proper boundaries of its

powers under the IAA, there would be a remedy available in judicial review. But constitutionality

does not turn on the availability or efficacy of judicial review. An unconstitutional law is not made

constitutional because the exercises of discretion thereunder are subject to judicial review.

[367] In any event, there is no air of reality to the suggestion that the decision by the Governor

in Council or Minister to designate certain kinds of intra-provincial activities as designated projects

would be subject to a successful judicial review.¹⁹²Parliament’s grant of such a generalized

exercise of discretion in favour of the federal executive means there is no “line” delimiting what

falls on the unreasonableness side. The IAA specifies no facts and law that substantively constrain

the federal executive: Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC

65 at para 105.

[368] As for challenges at the decision-making stage, while competent counsel may be able to

craft arguments in support of judicial review, those arguments would not likely succeed given

certain fundamental principles of law. Legally, the first hurdle is an obvious one – it is not apparent

on what basis a non-decision would be reviewable absent express language in the enabling

legislation permitting judicial review of a non-decision: Duitama Gomez v Canada (Public Safety

and Emergency Preparedness), 2010 FC 593 at paras 8, 30. Where a “decision” under the Act has

never been made because time limits have been repeatedly extended, there is arguably nothing to

192

We recognize that a challenge to the actions of the federal government could be advanced based on an alleged

breach by the federal government of constitutional obligations it otherwise has.

Page: 109

judicially review. Moreover, there is no obligation under the Act to provide reasons for any time

extensions.

[369] Nor does it appear likely that a form of mandatory order could be granted by a court to

compel the Minister or Governor in Council to make a wholly discretionary “decision” under the

IAA where the time for doing so, as prescribed or as extended, has not finally expired. Nor would

arguments about an abuse of public office or breach of duty of care likely provide a foundation for

successful judicial review. These arguments may well be futile where the Minister or Governor in

Council has simply postponed making a decision. In these circumstances, government inaction

would not likely ground an action based on abuse of public office or breach of a duty of care.

[370] Finally, even if a decision has been made by the Minister or Governor in Council, it would

be legally difficult, if not impossible, to successfully review the exercise of discretion since the

criteria to be used by the Minister or Governor in Council in making a public interest determination

are highly subjective. Given the margin of appreciation courts typically extend to government, any

such decision would not likely be practically amenable to judicial review regardless.¹⁹³It must

also be said that even if judicial review could be sought in theory, the judicial review process

would, practically speaking, involve no useful interim remedy as the case wound its way through

the courts.

[371] In the result, under this legislative regime, the suggestion of judicial review as a remedy

for federal overreach is neither a practical reality let alone a legal one. In the end, under the IAA,

“no answer” is a “no” answer, but not a plainly reviewable one.

D.

Conclusion Regarding the “Matter” of the IAA

[372] Our analysis of the purpose and effects of the IAA has led us to conclude that its “matter”

– its “most important feature”, its “main thrust”, “dominant characteristic”, “essential character”,

“pith and substance” – is: “the establishment of a federal impact assessment and regulatory regime

that subjects all activities designated by the federal executive to an assessment of all their effects

and federal oversight and approval”. This subject matter, and any variation on it, including the

“establishment of a federal impact assessment and regulatory regime that subjects all intra-

provincial activities designated by the federal executive to an assessment of all their effects and

federal oversight and approval”, intrudes fatally into provincial jurisdiction and the provinces’

proprietary rights as owners of their public lands and natural resources.

[373] In analyzing the purpose and the effects of the IAA, we have explained the impermissible

degree of federal jurisdictional overreach thereunder. Canada’s Constitution does not permit this

193

Nor is judicial review of the entry into the impact assessment regime a realistic option either. Given the Agency’s

degree of latitude under s 16(2), including that nothing more is required to trigger the impact assessment than the mere

possibility that carrying out the designated project may cause certain defined effects, any ability to judicially review

the entry into this impact assessment regime will also be practically unavailable.

Page: 110

hollowing out of provincial powers. We summarize those reasons and the federal overreach as

follows:

1. The IAA compels an intra-provincial designated project to

undergo a wide-ranging impact assessment and subjects the project

to regulation from inception to completion merely because the

federal executive has designated it as a designated project.

2. The IAA gives the federal executive the unilateral right to make

that designation even where the federal government has no decision-

making authority vis à vis that project under other valid and

applicable federal legislation.¹⁹⁴

3. The Act’s self-defined “effects within federal jurisdiction”

includes effects not within Parliament’s jurisdiction when applied to

intra-provincial designated projects, namely, the incidental effects

of provincial laws (authorizing such projects) on a federal head of

power, effects not linked, or not sufficiently linked, to a federal head

of power and effects that do not even qualify as significant.

4. The Act prohibits a proponent of an intra-provincial designated

project from any conduct that is otherwise lawful for proponents of

non-designated projects unless the federal executive determines that

the intra-provincial designated project is in the public interest.

5. The Act mandates the federal executive to consider all effects of

an intra-provincial designated project in determining whether the

project is in the public interest even where those effects are not all

linked, or sufficiently linked, to a federal head of power.

6. The Act mandates the federal executive to consider all effects of

an intra-provincial designated project in determining whether the

project is in the public interest even where those effects include

incidental effects of provincial laws on a federal head of power.

7. The Act permits the federal executive to determine that an intra-

provincial designated project is not in the public interest even where

the adverse federal effects caused by that project are not material.

8. The Act mandates the federal executive to take into account

mandatory factors in determining whether an intra-provincial

194

In other words, where the intra-provincial designated project does not require a federal permit to proceed.

Page: 111

designated project is in the public interest, not all of which are linked

to a federal head of power.

9. The public interest determination necessarily includes assessing

whether the intra-provincial designated project overall is in the

public interest – having regard to federal priorities and policies.

10. A negative public interest determination by the federal executive

constitutes an effective veto of the intra-provincial designated

project: the proponent is prohibited from proceeding even if the

project satisfies, can satisfy, or does not otherwise require, any

federal permit under other valid and applicable federal legislation.

11. The Act authorizes the federal executive to impose on an intra-

provincial designated project whatever conditions it chooses in

relation to self-defined adverse “effects within federal jurisdiction”

as part of the decision statement authorizing the project to proceed

even though the adverse federal effects are not all within federal

jurisdiction.

12. The Act permits the federal executive to second guess and veto

the results of a province’s duty to consult under s 35 of the

Constitution Act, 1982 with respect to an intra-provincial designated

project where that duty arises.

13. The Act authorizes the federal executive to stop an intra-

provincial designated project even where agreements have been

made by an Indigenous entity with either or both the provincial

government and project proponent and with provincial approval.

XIII. De Facto Expropriation

[374] The Indian Resource Council raised the issue of expropriation. It argues that the right to

the use and benefit of minerals on Indian reserve lands is an Aboriginal right protected by s 35 of

the Constitution.¹⁹⁵While it recognizes that the federal government has the jurisdiction to impact

on-reserve resources, it contends it can only do so in compliance with the Sparrow test.¹⁹⁶In its

view, if the federal government wishes to sterilize the development of on-reserve natural resources

(including oil and gas production), it must expropriate them through a proper process and

compensate the affected First Nation for the taking of those resources. Given our conclusion that

195

This argument was made in oral submissions before this Court.

196

Sparrow at 1119 sets out considerations to determine when a s 35 violation can be justified by the Crown, including

“whether, in a situation of expropriation, fair compensation is available”.

Page: 112

the IAA is unconstitutional, we need not address whether s 35 protects against a de facto

expropriation of natural resources on reserve lands and whether First Nations must be compensated

by the federal government if that is so.

[375] Were this legislative scheme upheld, it would arguably raise other issues relating to de

facto expropriation as well. That would include whether this scheme effectively strips the

provinces of their proprietary and development rights in their own property, including their natural

resources. That would raise in turn whether, and at what point, this constitutes a de facto

expropriation of such property: see Manitoba Fisheries Ltd. v The Queen, [1979] 1 SCR 101; R

v Tener, [1985] 1 SCR 533.¹⁹⁷And whether the federal government would be attempting to do

something else indirectly through this legislative scheme that it cannot do directly – and that is

block or stop the development of a province’s natural resources without compensating the province

for the loss of those resources or its proprietary interests therein. While these issues too await

another day, we do however note the following.

[376] The concept of expropriation is that governments have a right to expropriate property

owned by others for the general, common good. However, since there is no federal power

authorizing expropriation at large, expropriation by the federal government must be justified under

some federal head of power: Hogg at §29:5. While the federal government may expropriate

property owned by the provinces, that expropriation extends only to “the property absolutely

essential to the Dominion undertaking”: Natural Gas Tax at 1053; see also Nipissing Central

Railway.

[377] It is true there is no property right guaranteed under the Canadian Constitution. Therefore,

the Canadian Constitution does not compel either level of government to compensate parties for

property they expropriate.¹⁹⁸That has led one judge to state that the admonition “Thou shalt not

199

steal” does not apply to governments.

However, the federal government’s de facto

expropriation of property owned by the provinces is in a different category altogether. Why?

Because under s 109 of the Constitution, the proprietary rights of the provinces in public lands

including their natural resources are expressly guaranteed. These rights were further reinforced by

197

Where a statute is regulatory and does not involve a “taking” of property, the general rule is that no compensation

is payable: Hogg at §29:8; Alberta (Minister of Infrastructure) v Nilsson, 2002 ABCA 283 at para 61. The boundary

between regulating and taking is an imprecise one. Also, whether what constitutes a constructive taking of provincial

Crown lands is the same as what constitutes a constructive taking of private property is an open issue. The scope of

de facto expropriation of private property is on reserve at the Supreme Court: Halifax Regional Municipality v

Annapolis Group Inc., 2021 NSCA 3, leave to appeal to SCC granted, 39594 (24 June 2021), judgment reserved 16

February 2022.

198

Hogg at §29:8. That said, there is a rule of statutory interpretation that a statute that expropriates private property

is to be read as requiring compensation to the private owner absent a clear provision to the contrary in the statute:

Attorney General v De Keyser’s Royal Hotel, [1920] AC 508 (UKHL) at 542.

199

Florence Mining Co. v Cobalt Lake Mining Co. (1909), 18 OLR 275 at 279 (HC), cited in Authorson v Canada

(Attorney General), 2003 SCC 39 at para 53, [2003] 2 SCR 40.

Page: 113

the addition of s 92A to the Constitution. Consequently, the federal government would be required

to compensate a province for the de facto expropriation of any of its natural resources.

XIV. Classification of the Subject Matter of the IAA

A.

Introduction

[378] We now turn to whether the subject matter of the challenged legislation when applied to

intra-provincial designated projects falls within the heads of power Canada is relying on to support

the legislation’s validity: Second Securities Reference at para 86.

[379] Alberta argues that the IAA has no jurisdictional connection to any federal head of

constitutional power when applied to intra-provincial designated projects. Canada relies on

multiple heads of power to support different aspects of this legislative scheme.

B.

1.

Federal Heads of Power

Federal Triggers Do Not Determine Classification

[380] Canada submits there are three federal “triggers” that bring a project within the IAA, each

of which it contends is linked to federal heads of power:

1. A trigger tied to federal projects, prohibiting a federal authority

carrying out a project or providing financial assistance to enable a

project to be carried out on federal lands or outside Canada without

complying with ss 81-91 of the Act (ss 82-83);

2. A federal decision-based trigger, arising out of the prohibition on

a federal authority exercising a power or performing a duty or

function that could permit a designated project to be carried out

(s 8); and

3. An effects-based trigger, arising out of the prohibitions imposed

on the proponent of a designated project from causing any changes

to identified matters (s 7).

[381] Canada’s attempt to equate the “triggers” bringing activities within the IAA to federal heads

of power is misplaced. The issue is not what “triggers” the IAA but rather whether the subject

matter of the IAA is properly classified under one or more federal heads of power. In any case,

both from a legal and practical perspective, the “trigger” which brings an intra-provincial activity

within the regulatory scheme under the IAA is designation as a designated project.

Page: 114

[382] As noted, no one challenges the provisions relating to the first category, federal projects.²⁰⁰

Regardless, these do not support the constitutionality of the remainder of the challenged

legislation. As for the second category, we have already explained why the federal jurisdictional

overreach – including the requirement for a positive public interest determination – applies with

equal force to designated projects subject to s 8, that is those requiring a federal permit. Intra-

provincial designated projects in this second category are subject to the same regulatory scheme

and federal jurisdictional overreach as those intra-provincial designated projects subject to the s 7

prohibitions alone. The third category, the effects-based trigger arising out of the prohibitions in s

7, covers intra-provincial designated projects that do not require a federal permit.

[383] Canada submits Parliament has jurisdiction to regulate the federal effects of intra-

provincial designated projects under four heads of federal power: (1) s 91(12) – Sea Coast and

Inland Fisheries; (2) s 132 – Imperial Treaties; (3) s 91(24) – Indians and Lands Reserved for the

Indians; and (4) s 91 POGG – national concern doctrine.²⁰¹

200

The provisions relating to the first category of prohibitions are contained in a limited and discrete part of the Act

with a different and less stringent review process from that which applies to “designated projects”.

201

Canada also pointed out that “federal lands” are within federal jurisdiction under s 91(1A) of the Constitution Act,

1867. No one disputed this. Parliament’s jurisdiction over “federal lands” though does not include legislative authority

over “all effects” on such lands. As noted earlier, a blanket prohibition against “all effects” is no more constitutionally

valid than a law that prohibits “any effects” on fish.

Page: 115

2.

The Subject Matter of the IAA Is Not Within Federal Heads of Power

[384] The subject matter of the IAA cannot be classified as falling within federal jurisdiction on

the basis of the claimed heads of powers, individually or collectively.

a.

Section 91(12) – Sea Coast and Inland Fisheries

[385] Canada relies on its jurisdiction over the “Sea Coast and Inland Fisheries” under s 91(12)

of the Constitution Act, 1867 to “anchor” the prohibitions relating to intra-provincial designated

projects that cause, or may cause, any effects on fish, fish habitat and aquatic species and the ability

of the federal executive to decide whether intra-provincial designated projects which have any

adverse effects thereon should be allowed to proceed.

[386] Parliament’s power under s 91(12) is not a general power to regulate water pollution. We

have already explained why Parliament’s claimed jurisdiction to regulate an intra-provincial

designated project based on any effects of that project on fish, fish habitat and aquatic species –

even though all such effects are not the subject of prohibitions under the Fisheries Act or Species

at Risk Act and could not validly be under the division of powers and even though the project does

not even require a permit under the Fisheries Act or Species at Risk Act – constitutes federal

jurisdictional overreach.

[387] That overreach also includes Parliament’s authorizing the federal executive to effectively

veto an intra-provincial designated project based not only on any effects on fish, fish habitat and

aquatic species but also on mandatory factors not within federal heads of power.²⁰²

[388] In the result, the IAA, when applied to intra-provincial designated projects, is not

sufficiently linked to any likely harm to the fisheries and, in any event, improperly intrudes into

provincial heads of power. The subject matter of the IAA does not fall within Parliament’s

jurisdiction under s 91(12).

b.

Section 132 – Imperial Treaties

[389] Canada relies on its jurisdiction under s 132 of the Constitution Act, 1867 to “anchor” the

prohibitions relating to intra-provincial designated projects that cause, or may cause, any effects

on migratory birds and the ability of the Minister and Governor in Council to decide whether intra-

provincial designated projects which have any adverse effects on migratory birds should be

allowed to proceed.

202

Those factors include the “need” for the intra-provincial designated project and “the extent to which the effects of

the designated project hinder or contribute to the government of Canada’s ability to meet its environmental obligations

and its commitments in respect of climate change”: Act, s 22(1)(d), s 22(1)(i), s 63(e).

Page: 116

[390] Parliament’s power under s 132 is not a general power to regulate air pollution. Again, as

with the fisheries, Parliament’s claimed jurisdiction to regulate an intra-provincial designated

project based on any effects of that project on migratory birds – even though all such effects are

not the subject of prohibitions under the Birds Act and could not validly be under the division of

powers and even though the project may not even require a permit under the Birds Act – constitutes

federal jurisdictional overreach.

[391] That overreach also includes Parliament’s authorizing the federal executive to effectively

veto an intra-provincial designated project based not only on any effects on migratory birds but

also on mandatory factors not within federal heads of power.

[392] In the result, the IAA, when applied to intra-provincial designated projects, is not

sufficiently linked to any likely harm to migratory birds and, in any event, improperly intrudes

into provincial heads of power. The subject matter of the IAA does not fall within Parliament’s

jurisdiction under s 132.

c.

Section 91(24) – Indians and Lands Reserved for the Indians

[393] Canada relies on its jurisdiction over “Indians, and Lands reserved for the Indians” under

s 91(24) of the Constitution Act, 1867 to “anchor” the prohibitions in s 7(1)(c) and (d) and the

inclusion of the effects referred to in those sections as “effects within federal jurisdiction”.

[394] Canada’s position is premised on the proposition it has jurisdiction over an intra-provincial

designated project otherwise within exclusive provincial jurisdiction as long as the project may

have any effect on the environment, health, social or economic conditions of Indigenous peoples.

This too constitutes federal overreach; Parliament’s powers under s 91(24) do not extend this far.

[395] If Parliament could, as claimed, use any effects on any aspect of the environment, social,

health or economic conditions of Indigenous peoples to veto, that is stop, any intra-provincial

designated project, that would negate not only the incidental effects doctrine, but more important,

provincial powers. Intra-provincial designated projects fall primarily within provincial jurisdiction

and the fact an intra-provincial designated project may have incidental effects on Indigenous

peoples does not affect the validity of the provincial legislation nor its application to Indigenous

peoples.

[396] The subject matter of the IAA does not fall within Parliament’s jurisdiction under s 91(24).

d.

Section 91 – National Concern Doctrine Under POGG

[397] As explained, Parliament’s regulation of “any change” to the environment generally,

including GHG emissions in particular, that would occur outside the province in which an intra-

provincial designated project would be carried out or outside Canada from individual intra-

Page: 117

provincial designated projects or category thereof within a province, does not fall within the

national concern doctrine.

[398] The subject matter of the IAA does not fall within Parliament’s jurisdiction under POGG.

e.

Section 91(2) – Trade and Commerce

[399] Three intervenors invoke the trade and commerce power under s 91(2) of the Constitution

Act, 1867 in support of the constitutionality of this legislative scheme. The intervenors argue that

the Act assesses and regulates the “effects” of a project related to interprovincial and international

trade and commerce. Canada did not adhere to this argument in its submissions.

[400] The test for the trade and commerce power is strict and is not reached by the IAA. For a

law to engage the federal trade and commerce power, it must be “qualitatively different from

anything that could practically or constitutionally be enacted by the individual provinces either

separately or in combination”: Second Securities Reference at para 101, citing A.G. (Can.) v Can.

Nat. Transportation, Ltd., [1983] 2 SCR 206 at 267; see also General Motors. The Act regulates

intra-provincial designated projects that the provinces have the ability and jurisdiction to regulate

under several provincial heads of power. There is no interprovincial commercial activity served

by this legislative scheme when applied to intra-provincial designated projects.

[401] The subject matter of the IAA does not fall within Parliament’s trade and commerce power

under s 91(2).

f.

Section 91(27) – Criminal Law

[402] One intervener, Ecojustice Canada Society, argues that s 7 of the Act can also be upheld on

the basis of Parliament’s criminal law power under s 91(27) of the Constitution Act, 1867. It

contends s 7 contains all three requirements for classification as criminal law, namely (1) a

prohibition, (2) accompanied by a penalty, and (3) backed by a criminal law purpose: Genetic

Non-Discrimination at para 67; Firearms Reference at para 27; Reference re Assisted Human

Reproduction Act, 2010 SCC 61 at para 35, [2010] 3 SCR 457 [AHRA Reference]. Alberta argues

the provision is regulatory in nature and, as such, lacks a criminal law purpose. Canada does not

defend this legislative scheme on the basis of its criminal law power.

[403] Section 7(1) of the Act constitutes a prohibition in that it prohibits a proponent of a

designated project from causing certain enumerated effects, subject to meeting one of the

conditions set out in s 7(3). That the prohibition allows for exceptions rather than being absolute

in nature is not inconsistent with criminal law: AHRA Reference at para 36; Firearms Reference

at para 39. Moreover, breach of s 7 constitutes an offence under s 144(1)(a) and is backed up by a

penalty in s 144(2)-(4). The first two requirements are therefore met.

Page: 118

[404] The point of contention is whether s 7 contains a criminal law purpose. A law will have

such a purpose “if it addresses an evil, injurious or undesirable effect on a public interest

traditionally protected by the criminal law, or another similar public interest”: Genetic Non-

Discrimination at para 74 (per Karakatsanis J), para 137 (per Moldaver J). These public interests

have traditionally included peace, order, security, health and morality: Genetic Non-

Discrimination at para 68. The list also includes the protection of the environment: Hydro-Québec

at para 43 (per Lamer CJ and Iacobucci J), paras 123, 127 (per La Forest J). However, there must

be some degree of threat of harm to the public interest in question for the prohibition to be criminal

in nature: Genetic Non-Discrimination at paras 68, 75, 78-79.

[405] Under this legislative scheme, the prohibition in s 7 is not limited to protecting against

objectively “harmful effects” to the environment. Rather, s 7 prohibits any change to various

components of the environment. The prohibited conduct is also defined in too excessively broad a

manner and with too remote a potential of harm to avoid the constitutional infirmities of vagueness

or overbreadth were it found to be criminal law: R v Nova Scotia Pharmaceutical Society, [1992]

2 SCR 606.

[406] Moreover, conduct lawful for others is prohibited merely because the proponent’s proposed

project has been “designated”. The criminal law is necessarily a law of national effect. Centuries

of tradition make plain that the criminal law does not contemplate a checkerboard of criminal

liability depending on whether a proponent’s project has been “designated”. Limiting the

prohibitions to designated projects based on size or specific industries within Canada is a central

feature of s 7. That is a patent indication of a purely regulatory law.

[407] In any event, the IAA does not declare crimes, prosecute and punish accordingly. Instead,

the federal executive is authorized to let the proponent of the designated project proceed. Or not.

And if it permits it to proceed, it might require the proponent to comply with imposed conditions.

Or not. Where a prohibition is confined to ensuring compliance with a legislative scheme rather

than independently serving the public interest, it will be regulatory rather than criminal in nature:

Firearms Reference at para 38.²⁰³The s 7 prohibition and accompanying penalties are merely

ancillary to the regulatory regime created by the IAA itself.

[408] In summary, the IAA is regulatory in nature. Its subject matter does not fall within

Parliament’s criminal law power under s 91(27) of the Constitution Act, 1867.

203

A statute can be regulatory even in the face of a prohibition coupled with a penalty. As explained by Lamer CJ and

Iacobucci J (dissenting but not on this point) in Hydro-Québec at para 46: “Any regulatory statute that lacked ...

prohibitions and penalties would be meaningless. However, ... the penalties that are provided in a regulatory context

serve a ‘pragmatic’ or ‘instrumental’ purpose and do not transform the legislation into criminal law”.

Page: 119

C.

1.

Provincial Heads of Power

Introduction

[409] The subject matter of the IAA, when applied to intra-provincial designated projects, falls

squarely within several heads of provincial power.

2.

Intra-Provincial Designated Projects Fall Within Provincial Heads of Power

[410] That the real “matter” of the Act overshoots the bounds of federal jurisdiction when applied

to intra-provincial designated projects is clear. As noted, provincial governments can turn to

several provincial heads of power to regulate all aspects of intra-provincial designated projects:

s 92A(1), development and management of natural resources; s 109, proprietary rights as owners

of public lands; s 92(10), local works and undertakings; s 92(5), management of public lands;

s 92(13), property and civil rights; and s 92(16), local or private matters.

a.

Section 92A – Development and Management of Natural Resources

[411] Under the Resource Amendment, s 92A, each provincial Legislature has the exclusive

jurisdiction to manage and develop its 92A natural resources for the benefit of its present and

future residents. This is one of the powers provincial Legislatures can rely on, along with s 92(10),

s 92(13) and s 92(16) when acting as legislator, as opposed to owner, of privately-owned natural

resources.

[412] Provincial powers under s 92A(1) include determining terms and conditions under which

industry will – or will not – be permitted to develop its s 92A natural resources in the province.

That necessarily includes the conditions a province may choose to impose regarding those

operations, including regulating their GHG emissions.

[413] Section 92A extends not only to the provinces’ legislative authority over non-Crown-

owned natural resources. It also explicitly authorizes the exercise of the provinces’ proprietary

rights.²⁰⁴No exploration for 92A natural resources can be undertaken without provincial permits.

No intra-provincial designated project to develop those resources can be constructed or operated

on provincial lands or provincially-controlled lands without provincial permits.

b.

Section 109 – Proprietary Rights as Owners of Public Lands

[414] Section 92A is not the only power the provinces have with respect to the development of

their natural resources. To this must be added the provinces’ proprietary rights as owners of their

204

As explained in Moull at 419: “It is noteworthy that, at least partially in recognition of the potency ascribed to

provincial Crown proprietary rights, subsection 92A(6) expressly preserves not only all pre-existing provincial

legislative powers but also all pre-existing provincial government ‘rights’ as well.”

Page: 120

natural resources under s 109 of the Constitution. These rights clearly extend to regulation of

resources before, during and after recovery from the ground.

[415] A province’s proprietary rights along with its exclusive powers under s 92A(1) include the

right to exploit its natural resources. As the Supreme Court stated in Natural Gas Tax at 1080:

“The allocation in 1930, by agreement and constitutional amendment, of property to the Crown in

the right of the Province of Alberta necessarily carries with it the right of the province to the

proceeds of disposition – in the words of Duff J to ‘enjoy the fruits of that property’. The resources

were intended to be an important source of revenue, indeed the basis of the provincial financial

integrity, and therefore must be capable of realization” (emphasis added). Section 92A(1) put this

beyond doubt when it comes to the 92A natural resources since it expressly guarantees the

provinces the exclusive right to “development” of those resources.

c.

Section 92(5) – Management of Public Lands

[416] Under s 92(5) of the Constitution Act, 1867, provincial Legislatures have the jurisdiction

to determine the conditions under which a party is entitled to use public lands, whether as a lessee

or otherwise. Provincial legislative powers under this section extend to making laws in relation to

management of public lands, including laws relating to environmental impact assessments and the

regulation of natural resources, including GHG emissions therefrom.²⁰⁵

d.

Section 92(10) – Local Works and Undertakings

[417] Under s 92(10) of the Constitution Act, 1867, provincial Legislatures have exclusive

jurisdiction over local works and undertakings. Local works and undertakings, which include

projects for the development and management of natural resources, are subject to provincial

jurisdiction unless the work or undertaking falls within one of the exceptions under s 92(10)(a),

(b) or (c). “Local regulation is the rule; federal regulation, the exception”: Consolidated Fastfrate

Inc. v Western Canada Council of Teamsters, 2009 SCC 53 at para 31, [2009] 3 SCR 407

[Fastfrate]. ²⁰⁶The generation and distribution of hydroelectricity falls within provincial

jurisdiction since dams, generating stations and distribution systems constitute local works and

undertakings: Fulton et al v Energy Resources Conservation Board, [1981] 1 SCR 153.

e.

Section 92(13) – Property and Civil Rights

[418] Under s 92(13), property and civil rights, one of the broadest areas of provincial jurisdiction

under the Constitution Act, 1867, provincial Legislatures also have the power to regulate industry

205

For private lands, s 92(13), property and civil rights, gives the provinces power to make comparable laws.

206

The rationale for this, cited in Fastfrate at para 33, was explained in 1865 by then Attorney General John A.

Macdonald: “... the local legislatures have the control of all local works; and it is a matter of great importance ... that

each province will have the power and means of developing its own resources and aiding its own progress after its

own fashion and in its own way.”

Page: 121

in the province, except for those industries within federal jurisdiction. This power includes

regulating land use and emissions that could pollute the environment: Hogg at §30:33. The

provinces’ powers over nuisance and trespass, and that would include the regulation of GHG

emissions, as a subset of their exclusive jurisdiction over property and civil rights, have long been

recognized. The provinces’ power under s 92(13) also includes the control and regulation of local

trade and commerce generally: Re: Anti-Inflation Act, [1976] 2 SCR 373 at 452-453, per Beetz J

(in dissent but not on this point).

[419] While transportation is not mentioned in the Constitution Act, 1867, provincial Legislatures

have jurisdiction over intra-provincial modes of transportation, including roadways funded by the

province or by municipalities under provincially-delegated power, under s 92(13), as well as

s 92(10) and s 92(16). That is so even if the roadway is physically connected to other roadways

that extend beyond the limits of the province.

f.

Section 92(16) – Local or Private Matters

[420] This head of power covers matters of a merely local or private nature in the province. There

is nothing “mere” though about s 92(16) legislative jurisdiction. It completes the constitutional

design of an exhaustive distribution of legislative jurisdiction and constitutes an express deduction

from federal legislative jurisdiction.

D.

Conclusions on Classification

[421] The subject matter of the IAA, when applied to intra-provincial designated projects, falls

within several heads of provincial power. The federal jurisdictional overreach is manifest. Despite

the blending of federal points of interest with the parts of the IAA challenged here, the IAA

constitutes a profound invasion into provincial legislative jurisdiction and provincial proprietary

rights. Parliament’s claimed power to regulate all environmental and other effects of intra-

provincial designated projects improperly intrudes into industrial activity, resource development,

local works and undertakings and other matters within provincial jurisdiction.

[422] The division of powers exists for a reason: Attorney General of Nova Scotia v Attorney

General of Canada, [1951] SCR 31. Under this Act, the federal government is aggrandizing onto

itself decisions vis à vis intra-provincial designated projects which the citizens of individual

provinces rightly expect – and the Constitution requires – will be made by those directly

accountable to those citizens, and that is the provincial government of the province in which they

live.

[423] If upheld, the IAA would reduce the plainly applicable provisions of s 92A, s 92(5),

s 92(10), s 92(13), s 92(16) and s 109 to a subordinate status to federal authority. The unavoidable

effect of the IAA would be the centralization of the governance of Canada to the point this country

would no longer be recognized as a real federation. This is not what the framers of our Constitution

Page: 122

intended. And it is certainly not what provincial governments agreed to either on patriation of the

Constitution.

[424] Where natural resources are involved, it is each province that is concerned with the

sustainable development of its natural resources, not the federal government. It is the province that

owns those natural resources, not the federal government. And it is the province and its people

who lose if those natural resources cannot be developed, not the federal government. The federal

government does not have the constitutional right to veto an intra-provincial designated project

based on its view of the public interest. Nor does the federal government have the constitutional

right to appropriate the birthright and economic future of the citizens of a province.

Page: 123

XV. Conclusion on Validity of the IAA and Severance

[425] For these reasons, we have concluded that the IAA is ultra vires Parliament.

[426] Canada maintains the IAA is not severable and ought to stand or fall as a whole. We agree.

In our view, it would not be possible to practically sever offending provisions from the Act. Nor

does severing the part implementing the Act, that is the Regulations, make sense. The two are

inextricably linked. This Court cannot fairly conclude that Parliament would have enacted this

scheme without including therein intra-provincial designated projects: Ontario (Attorney

General) v G, 2020 SCC 38 at paras 112-114. Thus, this Court cannot simply strike from the

Regulations all intra-provincial designated projects.

[427] Further, severing the Regulations would not address the overreach in the Act itself nor

preclude, in any event, the adoption of new, equally problematic, regulations. Therefore, severance

is not a remedy in these circumstances.

XVI. Interjurisdictional Immunity

[428] Alberta and Saskatchewan invoke, as an alternative argument, the doctrine of

interjurisdictional immunity.²⁰⁷Under this doctrine, an otherwise valid law will be inapplicable to

the extent it impairs the “core”, that is “basic, minimum and unassailable content”, of a head of

power falling under the jurisdiction of the other level of government: Desgagnés Transport at

paras 90-93. That is so especially where the effect is on “circumscribed areas of activity”: Guy

Régimbald & Dwight Newman, The Law of the Canadian Constitution, 2nd ed (Toronto:

LexisNexis, 2017) at 210, citing Canada (Attorney General) v PHS Community Services Society,

2011 SCC 44 at para 60, [2011] 3 SCR 134 [Insite]. The impairment test is “a midpoint between

sterilization and mere effects”: Quebec (Attorney General) v Canadian Owners and Pilots

Association, 2010 SCC 39 at para 44, [2010] 2 SCR 536.

[429] To date, this doctrine has been used to protect the core of federal powers: Insite at para 60;

Canadian Western Bank at para 45. But as the Supreme Court confirmed in Insite at para 65, this

doctrine should work both ways, that is in favour of the provinces as well as the federal

government.²⁰⁸It would be unfair indeed if the federal government, with all its constitutional

advantages, were permitted to rely on this doctrine but the provinces could not: Hogg at §15:21.

The result would be a ratchet that turns one way only, in favour of the federal government and

207

As the Supreme Court indicated in Insite at para 65, “before applying the doctrine of interjurisdictional immunity

in a new area, courts should ask whether the constitutional issue can be resolved on some other basis.” We accordingly

began by resolving the constitutionality of the IAA on the basis of the pith and substance and validity analysis.

208

The Supreme Court had earlier signalled the doctrine should also apply in favour of the provinces: Canadian

Western Bank at para 35. Some argue that rather than extend the doctrine in favour of the provinces, the courts should

instead read down federal legislation to keep it within federal jurisdiction: Jonathan Penner, “The Curious History of

Interjurisdictional Immunity and Its (Lack of) Application to Federal Legislation” (2011) 90:1 Can Bar Rev 1 at 20-

21, 26; Honickman at 236-239.

Page: 124

against the provinces. Not only are the provincial powers under s 92 just as “exclusive” as the

federal ones under s 91, so too are the provincial powers under s 92A(1). Thus, “each provincial

head of power, no less than each federal head of power, has a ‘basic, minimum and unassailable

content’ that is immune from incursion by the other level of government”: Hogg at §15:21.

[430] While we have concluded that the IAA is ultra vires, alternatively, if this legislative scheme

were ultimately found to be constitutionally valid, the doctrine of interjurisdictional immunity

should apply to protect what constitutes the “core” of relevant provincial heads of power. The Act

and Regulations seriously and significantly impair provincial powers under s 92A(1), s 92(5),

s 92(10), s 92(13), s 92(16) and s 109. However, what constitutes the “core” of each of these

provincial heads of power was not sufficiently addressed to permit this Court to definitively

resolve all aspects of the application of this doctrine and we decline to do so.

XVII. Conclusion

[431] The IAA is ultra vires Parliament.

[432] As noted, intra-provincial activities are not immune from federal government regulation

providing that regulation remains within the constitutional dividing lines. Therefore, intra-

provincial designated projects that require a federal permit under other valid and applicable federal

laws remain subject to those laws but in accordance with the terms of such laws, not this legislative

scheme.

[433] We would add this. Legitimate concerns about the environment and climate change shared

by all Canadians and provincial governments as well as the federal government do not justify

overriding our existing form of federalism and the division of powers. If the federal government

believes otherwise, it should make the case for an increase in its jurisdiction to the Canadian public.

Constitutional change should be effected as the Constitution requires – by agreement amongst the

federal and provincial governments.

[434] We ought never lose sight of the great genius of our constitutional structure which has

produced a free and secure democracy, one that has served Canadians well for 155 years. Our

ancestors chose a federal, not unitary, structure for a purpose – to unify separate colonies and

create a country. The negotiated division of powers lies at the heart of what makes this country

what it is, and why, despite significant tensions from time to time, Canada has been able to survive

Page: 125

and prosper since Confederation. It remains one of this country’s greatest strengths. It will continue

to benefit present and future generations as we face the environmental, economic and security

challenges ahead providing that we respect the principles on which Canada has been founded:

federalism, responsible government and the Rule of Law.

Special Hearing heard February 22-25, 2021

Opinion filed at Calgary, Alberta

this 10th day of May, 2022

________________________________________

Fraser C.J.A.

________________________________________

Watson J.A.

________________________________________

McDonald J.A.

Page: 126

Strekaf, JA:

[435] I have reviewed the Opinion of Fraser C.J.A., Watson J.A. and McDonald J.A. and agree

with the analysis and conclusions expressed therein with the exception of paragraphs 374 to 377

about which I make no comment.

Special Hearing heard February 22-25, 2021

Opinion filed at Calgary, Alberta

this 10th day of May, 2022

________________________________________

Strekaf J.A.

Page: 127

Paragraph

Table of Contents

I.

II.

Introduction ............................................................................................................[436]

History of Canadian Environmental Assessment Legislation ...................................[452]

A.

B.

C.

D.

EARPGO or the Guidelines Order.................................................................[453]

Canadian Environmental Assessment Act, 1992 ...........................................[458]

Canadian Environmental Assessment Act, 2012 ...........................................[465]

IAA and Regulation........................................................................................[471]

III.

The Legislative Scheme of the IAA and Regulation ..................................................[474]

A. The IAA: Title, Preamble, Purpose, and Impact Assessment Regime ...........[474]

1.

2.

The Title, Preamble and Stated Purpose............................................[474]

The Impact Assessment Regime........................................................[477]

a.

b.

Section 7 and the Regulation’s Project List...........................[481]

Phase I. The Planning Phase ..................................................[493]

i.

Proponent and Agency steps to determine if

an impact assessment is necessary: ss 10-15 .............[493]

The Agency’s decision as to whether an impact

assessment is necessary: s 16.....................................[494]

ii.

c.

d.

Phase II. The Impact Statement .............................................[497]

Phase III. The Impact Assessment.........................................[499]

i.

The impact assessment report considers adverse

effects and adverse or incidental effects of a

designated project ......................................................[501]

Substitution and delegation of impact assessment.....[503]

Impact assessment by a review panel ........................[507]

ii.

iii.

e.

Phase IV. The Decision..........................................................[509]

i.

Minister’s decision.....................................................[509]

Referral to Governor in Council ................................[510]

The Governor in Council’s Decision .........................[511]

The Decision must consider the s 63 Factors.............[512]

Projects by federal authorities....................................[515]

ii.

iii.

iv.

v.

B.

Distribution of Legislative Powers Under the Constitution Act, 1867 ......................[524]

Analysis ............................................................................................................[525]

A. General Principles..........................................................................................[525]

What Has Changed: Comparing CEAA, 2012 vs IAA Project Lists ..............[517]

IV.

V.

1.

The Architectural Design of the Constitution Act, 1867:

Federalism..........................................................................................[525]

The Subject of the Environment: A “Matter” that Falls within both

Federal and Provincial Heads of Constitutional Authority................[527]

2.

Page: 128

3.

4.

Federal and Provincial Regulation of Environmental Effects:

Cooperative Federalism .....................................................................[540]

The Presumption of Constitutionality................................................[548]

B.

Validity of the IAA and Regulation................................................................[550]

1. Characterization.................................................................................[557]

a.

b.

Purpose of the IAA and Regulation........................................[567]

i.

ii.

iii.

Intrinsic evidence.......................................................[567]

Extrinsic evidence......................................................[572]

Conclusion as to purpose of the IAA and

Regulation..................................................................[582]

Effects of the IAA and Regulation .........................................[583]

i.

The effects of the IAA and Regulation shown

through s 7 and the Project List .................................[584]

The effects of the IAA and Regulation shown through

the environmental assessment process.......................[586]

The effects of the IAA shown through decision-making:

authorization of projects in the public interest...........[589]

Conclusion as to effects of the IAA and Regulation ..[590]

ii.

iii.

iv.

c.

Conclusion as to Pith and Substance of the IAA and

Regulation..............................................................................[591]

2.

Classification......................................................................................[594]

a.

b.

c.

Matters in the IAA Regulation Project List prima facie

Within s 91 of the Constitution Act, 1867..............................[599]

Matters in the IAA Regulation Project List prima facie

Within s 92 of the Constitution Act, 1867..............................[601]

Section 7 and the Regulation: Environmental Effects upon

Areas of Federal Jurisdiction .................................................[602]

i.

Section 7(1)(a)(i) – change to fish and fish habitat, as

defined in s 2(1) of the Fisheries Act, within the

legislative authority of Parliament: the Fisheries

Power under s 91(12) of the Constitution Act, 1867..[613]

Section 7(1)(a)(ii) – change to aquatic species, as

defined in ss 2(1) of the Species at Risk Act, within the

legislative authority of Parliament: the Fisheries Power

under s 91(12) of the Constitution Act, 1867.............[621]

Section 7(1)(a)(iii) – change to migratory birds, as

defined in ss 2(1) of the Migratory Birds Convention

Act, 1994, within the legislative authority of Parliament:

Imperial Treaty Power under s 132 of the Constitution

Act, 1867 ....................................................................[625]

ii.

iii.

Page: 129

Section 7(1)(a)(iv) – change to components of the

iv.

environment within the legislative authority of Parliament:

any other component of the environment set out in

Schedule 3..................................................................[631]

Section 7(1)(b)(i) – change to the environment on

federal lands...............................................................[632]

Section 7(1)(b)(ii) – change to the environment in

another province: POGG and s 91 of the Constitution Act,

1867............................................................................[633]

Section 7(1)(b)(iii) – change to the environment

v.

vi.

vii.

outside Canada: POGG and s 91 of the

Constitution Act, 1867 ...............................................[640]

viii. Section 7(1)(c)(i)-(iii) – change to the environment of

Indigenous Peoples, with impact on ..........................[643]

a)

b)

physical and cultural heritage. .......................[643]

the current use of lands and resources for

traditional purposes........................................[643]

any structure, site or thing that is of historical,

archeological, paleontological, or architectural

significance ..................................................[643]

c)

ix.

Section 7(4) – the proponent may cause a change

referred to in s 7(1)(d) in relation to Indigenous

peoples that hold rights affirmed by s 35 of the

Constitution Act, 1982 if the change is not adverse

and the Indigenous peoples and proponent agree the

act or thing may be done............................................[656]

d.

e.

Section 8: Federal Decisions..................................................[658]

Sections 81-83: Federal Projects on Federal Lands and

Projects Outside Canada ........................................................[659]

Sections 32-33 of the Regulation Schedule: GHG

f.

Emissions may be “Effects” in Federal Jurisdiction; and

Identify Threshold Levels for Project Inclusion on the

Project List.............................................................................[660]

Project-Based Assessment: An External Legislative

g.

Trigger (Affirmative Regulatory Duty) tied to a Specific

Head of Power is not a Constitutional Prerequisite ...............[671]

Review of all Aspects of a Project is Permitted.....................[684]

A Project in the Public Interest vs all Aspects of a

h.

i.

Project in the Public Interest..................................................[690]

i.

Consideration of broad factors in federal

Page: 130

decision-making is constitutional ..............................[695]

Consideration of broad factors in federal

ii.

decision-making does not mean the decision –

the public interest determination – extends beyond

effects within federal jurisdiction...............................[698]

j.

Materiality and the Incidental Effects Doctrine.....................[703]

k.

IAA: Cooperative Federalism, not Federal Veto....................[710]

i.

IAA strengthens control over environmental effects in

federal jurisdiction .....................................................[718]

Federal and provincial decision-makers make different

decisions, rather than a “veto” of one by the other....[721]

The approach that a project cannot proceed as proposed

without endorsement by both levels of government has

been in place since at least Oldman River .................[722]

The IAA and EPEA are designed to facilitate cooperation

rather than a competitive veto, one over the other.....[723]

Section 92A(1): Exclusive Jurisdiction over Natural

Resources? .................................................................[731]

ii.

iii.

iv.

v.

3.

Conclusion as to Validity of the IAA and Regulation........................[740]

C.

Inter-Jurisdictional Immunity ........................................................................[742]

1.

2.

Issue not Raised by Reference Questions ..........................................[742]

If the Application of the Doctrine of Interjurisdictional Immunity is

Not Beyond the Reference Scope, In Any Event, It Does

Not Apply Here..................................................................................[748]

VI.

Conclusion ............................................................................................................[760]

Page: 131

Greckol J.A. (Dissenting):

I. Introduction

[436] The Government of Alberta seeks this Court’s opinion on the constitutionality of the

Impact Assessment Act, SC 2019, c 28, s 1 [IAA] and one of its associated regulations, the Physical

Activities Regulations, SOR/2019-285 [the Regulation].

[437] Briefly stated, the IAA establishes a federal environmental assessment regime that

facilitates planning and information-gathering mostly in relation to “designated projects”, these

being certain physical activities largely as outlined in the Regulation. Projects listed in the

Regulation cover a wide range of areas, including not only those clearly within federal jurisdiction

(e.g., certain activities in national parks) but also those like in situ oil sands extraction facilities,

which, though they may have environmental impacts that fall within federal jurisdiction, are

themselves regulated provincially. The legislative scheme is ultimately concerned with whether

such projects may cause certain “adverse effects” said to be within the legislative authority of

Parliament, and if so, whether those effects are in “the public interest”. With that end in mind, the

IAA sets out a process whereby designated projects are prohibited from causing a number of

changes to the environment unless and until it is determined that i) an assessment is not necessary

or ii) an assessment of the proposed project is undertaken and, on that basis, the Minister or

Governor in Council is able to conclude that any so-called “effects within federal jurisdiction” that

may be caused by the proposed project are in the public interest.

[438] The questions posed by Alberta in this Reference are set out in the Order in Council:

1. Is Part 1 of An Act to enact the Impact Assessment Act and the Canadian Energy

Regulator Act, to amend the Navigation Protection Act and to make consequential

amendments to other Acts, S.C. 2019, c. 28, unconstitutional in whole or in part, as

being beyond the legislative authority of the Parliament of Canada under the

Constitution of Canada?

2. Is the Physical Activities Regulations, SOR/2019-285, unconstitutional in whole or in

part by virtue of purporting to apply to certain activities listed in Schedule 2 thereof

that relate to matters entirely within the legislative authority of the Provinces under the

Constitution of Canada? (160/2019)

[439] Bill C-69, entitled An Act to enact the Impact Assessment Act and the Canadian Energy

Regulator Act, to amend the Navigation Protection Act and to make consequential amendments to

other Acts, SC 2019, c 28, consists of four parts. The IAA is Part 1 of Bill C-69 and is the enabling

legislation of the Regulation. No other part of Bill C-69 is at issue in this Reference.

[440] Several points should be borne in mind as a prelude to considering this Reference.

Page: 132

[441] First, the majority, Alberta, and the intervenors, do not disagree that a significant portion

of the legislative scheme involves matters within federal jurisdiction. The Project List in the

Schedule of the Regulation includes the following uncontentious areas: national parks and

protected areas (ss 1-11); defence (ss 12-17); uranium mines or mills (ss 20-23); nuclear facilities

(ss 26-28); offshore oil and gas facilities (ss 34-36); international or interprovincial power lines

(ss 39); offshore oil and gas pipelines and renewable energy (ss 40, 44-45); aerodromes or runways

(ss 46-47); international or interprovincial bridges or tunnels (s 48); canals or causeways in

navigable waters (ss 49-50); and marine terminals (ss 52-53). And even with respect to these

activities, the central provision of the IAA (s 7) is limited to changes with effects in the following

areas said to be within federal jurisdiction: fish and fish habitat, aquatic species, migratory birds,

federal lands, trans-provincial effects, and certain effects upon Indigenous peoples. Nor is any

issue taken with ss 81-91 of the IAA, which provides for the assessment of projects (even where

not designated) on federal lands and outside Canada.

[442] What is left to consider – and what this Reference is about – is whether it is constitutionally

permissible for a federal project-based environmental assessment regime to regulate “effects”

(defined in s 2 to include “changes to the environment or to health, social or economic conditions

and the positive and negative consequences of these changes”) on purported areas of federal

jurisdiction caused by certain designated projects where the projects themselves otherwise fall

within provincial jurisdiction, as follows:

 s 92(10) of the Constitution Act, 1867 as involving:

i)

“Local Works and Undertakings” (new public highways that require 75 km

or more of new right of way in s 51 of the Regulation Schedule; certain

railways and railway yards in ss 54-55 of the Regulation Schedule).

 s 92A(1) of the Constitution Act, 1867 as involving:

i)

The “exploration ... development, conservation and management of non-

renewable natural resources ... in the province” (mines and metal mills in ss

18-19, 24-25 of the Regulation Schedule; oil, gas, and other fossil fuel

facilities in ss 30-33, ss 37-38 of the Regulation Schedule); and

ii)

The “development, conservation and management of sites and facilities in

the province for the generation and production of electrical energy”

(renewable energy in ss 42-43 of the Regulation Schedule).

[443] In my opinion, the IAA and its Regulation are a valid exercise of Parliament’s authority to

legislate on the matter of the environment. Section 7 of the IAA prohibits proponents of physical

activities or designated projects on the Regulation Project List from doing anything to advance the

project if it may cause defined effects in federal jurisdiction. Most of the designated projects

involve activities within areas of federal jurisdiction and prima facie within s 91 of the Constitution

Page: 133

Act, 1867 – such as national parks, interprovincial railways, and offshore oil and gas facilities –

that may have effects upon areas also within federal jurisdiction, such as fish habitat, federal lands,

or Indigenous peoples. The remainder of the designated projects are intra-provincial and prima

facie within s 92 of the Constitution Act, 1867 – such as mines and metals, and oil and gas facilities

– that may have effects upon areas of federal jurisdiction, such as fish habitat, federal lands, or

Indigenous peoples. In either case, the project-based federal environmental assessment regime in

the IAA and Regulation target effects in federal jurisdiction.

[444] Second, at least five important legal points already established by the Supreme Court of

Canada provide a useful backdrop to this Reference:

1. The environment “is a diffuse subject that cuts across many different areas of constitutional

responsibility, some federal, some provincial”: R v Hydro-Québec, [1997] 3 SCR 213 at

para 112, 151 DLR (4th) 32 [Hydro-Québec]; see also Friends of the Oldman River Society

v Canada (Minister of Transport), [1992] 1 SCR 3 at 63-64, 88 DLR (4th) 1 [Oldman River

cited to SCR];

2. Some local projects will have both a provincial aspect and a federal aspect: Oldman River

at 69; Quebec (Attorney General) v Moses, 2010 SCC 17 at para 36, [2010] 1 SCR 557

[Moses]. As noted by La Forest J in Oldman River at 69, “[a]lthough local projects will

generally fall within provincial responsibility, federal participation will be required if the

project impinges on an area of federal jurisdiction”. Accordingly, “[t]he effect of the

Oldman River decision is to confer on the federal Parliament the power to provide for

environmental assessment of any project that has any effect on any matter within federal

jurisdiction”: Peter W. Hogg & Wade K. Wright, Constitutional Law of Canada, 5th ed

supplemented (Toronto: Thomson Reuters, 2021) (loose-leaf updated 2021) at § 30.32

[Hogg] [emphasis added];

3. Due to this overlap, both federal and provincial environmental assessment regimes can

apply to a given project, which has been held to be “neither unusual nor unworkable”:

Quebec (Attorney General) v Canada (National Energy Board), [1994] 1 SCR 159 at 193,

112 DLR (4th) 129 [National Energy Board cited to SCR]. Environmental assessments

have accordingly come to contemplate a cooperative approach to protecting the

environment through shared impact assessment responsibilities between jurisdictions,

including by means of bilateral agreements between individual provinces and the federal

government;

4. A federal environmental assessment regime applicable to local projects is permitted to

review and assess the entire project as proposed by a proponent rather than simply the

scope of the project thought to fall within federal jurisdiction: MiningWatch Canada v

Canada (Fisheries and Oceans), 2010 SCC 2, [2010] 1 SCR 6 [MiningWatch]; and

Page: 134

5. There is no constitutional imperative that environmental assessment legislation use a

particular trigger to initiate a federal assessment, such as the “affirmative regulatory duty”

described in Oldman River: Moses at para 13, aff’g 2008 QCCA 741 at paras 93-115.

[445] Third, following up on this last point, with respect, neither the majority nor Alberta nor

any other interested party has provided a clear explanation as to why it is constitutionally

impermissible for Canada to move from an environmental assessment process triggered by an

external statute rooted in a named federal head of constitutional authority (such as that considered

in Oldman River) to a project-based environmental assessment approach where the environmental

assessment legislation is itself rooted in heads of constitutional power, limiting its reach to

environmental effects in federal jurisdiction, if indeed it does so. A democratically elected

Parliament is free to design an environmental protection approach of its choice, so long as it acts

within constitutional constraints. Indeed, it would be surprising if it did not change that approach

to meet the challenges of the ever-increasing threat posed by environmental degradation and the

climate crisis. Some might call this progress. In any event, Canada’s choice of approach to

environmental issues is an expression of the will of the people; Canadians are often in the vanguard

of progress on the fundamental social issues of our times.

[446] Fourth, natural resource projects are not an enclave of exclusive provincial jurisdiction for

all purposes, including environmental protection, immune from federal consideration. A province

and the industries contained therein cannot exist in splendid isolation. While the division of powers

contemplates that the provinces are constitutionally entitled to be master of their commercial ship

and captain of their resource fate, Canada is a federation comprised of a complex matrix of

jurisdictions: federal, provincial, Indigenous groups, territorial, regional, and local governments,

each with their own environmental interests. With respect to the federal and provincial

governments, this is what was meant when La Forest J described the environment as “a

constitutionally abstruse matter which does not comfortably fit within the existing division of

powers without considerable overlap and uncertainty”: Oldman River at 64.

[447] Oversight of environmental impacts cannot be the monopoly of one level of government,

as environmental impacts are ubiquitous, touching upon a multiplicity of diverse interests, from

an individual project’s sometimes minor effects upon limited numbers of people at a community

level to cumulative effects that attain the magnitude of existential threat to all peoples at a global

level. Canadians might be surprised, or even alarmed, by the notion that natural resources projects

such as in situ oil sands extraction facilities are immunized from federal environmental regulation.

[448] Within this country, Canada geese will fly over tailings ponds north of Fort McMurray

without heed of jurisdiction. Fisheries will be disrupted by damming waterways or constructing

pipelines that transcends provincial boundaries. Effluent from a potash mine in Saskatchewan may

affect the health of Québécois or Indigenous peoples living downstream along a river system that

has no regard for provincial borders. A proposed coal strip mining operation on the borders of

Banff or Jasper National Park may affect the roaming elk herds whose breeding grounds are deep

within the Parks or may contaminate the headwaters of rivers meant to provide clean drinking

Page: 135

water to Alberta ranchers and Indigenous communities. An oil spill in Clayoquot Sound may

contaminate beaches in the wilderness beloved by Canadians, jeopardize the livelihood of local

Indigenous peoples, disrupt the tourism economy of Tofino residents, and pollute coastlines

abroad. Environmental concerns engage the interests of a complex matrix of jurisdictions and all

Canadians, affecting the air we breathe, the water we drink, the food we eat, and are best addressed

as the shared responsibility of all levels of government, with Indigenous peoples the first among

equals, given their historical stewardship of and continued reliance upon the land.

[449] Constitutional decisions to date lead to the conclusion that both Parliament and the

provinces have authority to pass laws with respect to the environment, including with respect to

the impact upon the environment of physical activities and designated projects in the resource

sector, each with respect to the aspect of the environment within their own constitutional authority.

My point here is a simple one: the trust of citizens in their various levels of government to protect

their environmental interests rests with all levels of government given the complexity and

pervasiveness of environmental concerns, appropriately named the existential threat of our times.

[450] The challenge posed by protecting the environment is no longer the purview only of the

young and idealistic; it has engaged governments and civil society, the science community, and

increasingly, leaders of industry and commerce across the globe. It falls to governments, as

guardians of the environment, to put in place legislative processes and administrative infrastructure

to protect against environmental effects. It falls to the courts, in turn, to determine whether

governments have the constitutional authority to enact the environmental protection regimes they

have chosen for this purpose. Courts must do so neutrally and dispassionately. But such a stance

need not be in service of the kind of rigidity that hobbles the ability of governments to respond to

the complexities of modern Canadian society. To that end, courts in this country have developed

various interpretive tools and metaphors designed to ensure some degree of flexibility in our

federal system of governance. Now is not the time to abandon these tools or, worse yet, to give

credence to the kind of “Trojan horse” metaphor advanced by Alberta and Saskatchewan that, in

likening Canada to a foreign invading army deceptively breaching our protective walls, only fuels

suspicion and pits one level of government against another.

[451] Canadian constitutional law is already replete with metaphors, including many involving

something central to the environment itself: water. The division of powers as “water-tight

compartments” (Canada (AG) v Ontario (AG), [1937] 1 DLR 673 at 684, [1937] AC 326); the

Constitution as a “living tree” capable of growth, nourished by progressive interpretation

(Edwards v Canada (Attorney General), [1930] 1 DLR 98 at 106-107, [1930] AC 124); flexible

federalism as a “dominant tide” that cannot sweep designated powers “out to sea” (Reference re

Securities Act, 2011 SCC 66 at para 62 [Securities Reference]). To these metaphors I add only this.

We in this country are all in the same boat. The division of powers provides multiple oars and in

many instances no assurance that we will all row in the same direction. But constitutional

interpretation can and should at least allow for such cooperation, where feasible. The environment

is one such case. Our planet is on fire, and we need water – not heat. The majority offers heat. This

is water. It offers at least the opportunity for governments in this country to work collaboratively

Page: 136

on issues of overlapping jurisdiction in order that they may better serve the multifaceted concerns

of their citizens. Without such water, we risk more than merely rowing in different directions: we

risk running aground.

II.

History of Canadian Environmental Assessment Legislation

[452] The Parliament of Canada has been legislating to protect the environment for almost four

decades, including with federal environmental assessment legislation in relation to subjects within

federal jurisdiction. When the predecessors to the IAA are compared to subsequent iterations, it is

apparent that the approach to environmental assessment has incrementally evolved, but the

fundamental purpose remains the same: generally, it is to protect against adverse effects. Each of

the modalities employed since 1984 has included these essential elements: an environmental

assessment process; regulation of environmental “effects” described as within federal jurisdiction;

“environmental effects” broadly defined as inclusive of changes to the physical environment, to

health and socio-economic conditions, to physical and cultural heritage, as well as to the use of

land and resources for traditional purposes by Indigenous people, and cooperation amongst

jurisdictions. The project-based approach – a listing of projects to which the legislation would

apply – is common to the last two iterations of environmental legislation, and as discussed herein,

has already passed constitutional muster.

A.

EARPGO or the Guidelines Order

[453] In 1984, pursuant to the Department of the Environment Act, being Part I of the

Government Organization Act, 1970, RSC 1970, c 14 (2nd Supp), as amended by Part III of the

Government Organization Act, 1979, SC 1978-1979, c 13 as it appeared on June 22, 1984, the

Governor in Council promulgated the Environmental Assessment and Review Process Guidelines

Order, SOR/84-467: [EARPGO or Guidelines Order]. EARPGO required all federal departments

and agencies with decision-making authority for any proposal to undertake environmental

screening and initial assessment to determine “whether, and the extent to which, there may be any

potentially adverse environmental effects from the proposal”: s 10(1). A proposal meant “any

initiative, undertaking or activity for which the Government of Canada has a decision making

responsibility”: s 2. The Guidelines Order applied to any proposal that (s 6):

(a) was undertaken by a federal department,

(b) may have had an environmental effect on an area of federal jurisdiction,

(c) required federal funding, or

(d) was located on federal lands.

[454] In considering a proposal, the initiating department was required to consider potential

environmental effects, social effects, public concerns, and could also consider general

socioeconomic effects: s 4. Federal decision-makers could reject proposals within their governing

legislation: s 12(f).

Page: 137

[455] The responsible federal department decided a project proposal could proceed if it had no

adverse effects, insignificant adverse effects, or mitigable adverse effects. A proposal was to be

modified, rescreened, or abandoned if it had unacceptable effects. If the proposal had significant

adverse effects or unknown adverse effects, it was to undergo further review: s 12.

[456] EARPGO contemplated cooperation with provincial assessments: ss 5, 8, 35(c).

[457] The EARPGO environmental assessment regime was in place when the Supreme Court of

Canada decided the Oldman River case.

B.

Canadian Environmental Assessment Act, 1992

[458] In 1992, Parliament passed the Canadian Environmental Assessment Act, SC 1992, c 37

[CEAA, 1992]. CEAA, 1992 had a broader scoping mechanism than EARPGO. It required an

environmental assessment of a project before a federal authority exercised certain powers or

performed certain duties or functions, including if it (s 5):

(a) was the proponent of a project,

(b) provided financial assistance to a project,

(c) administered federal lands connected to the project, or

(d) issued a permit or authorization for a project from a list as prescribed by regulation.

[459] However, the legislation also allowed the Minister of the Environment to refer a project

for an environmental assessment in various instances notwithstanding that no power, duty or

function referred to in s 5 was to be exercised or performed by a federal authority. One involved

where the Minister was “of the opinion that the project may cause significant adverse

environmental effects in another province”: s 46(1) [emphasis added]. Another was where the

Minister was “of the opinion that the project may cause significant adverse environmental effects

occurring ... outside Canada and outside ... federal lands”: s 47(1) [emphasis added]. A third

involved where the Minister was of the opinion that the project may cause significant adverse

environmental effects on certain enumerated federal lands: s 48(1).

[460] CEAA, 1992 provided for a review of projects unless specifically excluded: ss 7(1)(a),

59(c)-(c.1). It required environmental assessment to be conducted as early as practicable in the

planning stages: s 11. An “environmental effect” included any change the project may cause to the

environment of listed wildlife species and habitats, any effect of such change on health and socio-

economic conditions, physical and cultural heritage, use of lands and resources by Indigenous

persons, and on structures and sites of historical, archeological, paleontological, or architectural

significance: s 2(1).

[461] The environmental assessment process (s 14) required consideration of a wide variety of

factors including environmental effects, their significance, public comments, mitigation measures,

Page: 138

and alternative means of carrying out the project; and could consider community knowledge and

Aboriginal traditional knowledge: ss 16, 16.1.

[462] The responsible authority could approve a project if it was not likely to cause significant

adverse environmental effects, or if the significant adverse environmental effects could be justified

in the circumstances: ss 20, 23(1), 37(1).

[463] CEAA, 1992 contemplated cooperation with other jurisdictions (ss 12(4)), a joint review

panel (s 40), delegation (s 17), or coordination (ss 12.1-12.5), including with provincial agencies,

bodies established under land claim agreements, and foreign states.

[464] The CEAA, 1992 environmental assessment regime was in place when the Supreme Court

of Canada decided the Moses and MiningWatch cases.

C.

Canadian Environmental Assessment Act, 2012

[465] In 2012, Parliament passed the Canadian Environmental Assessment Act, 2012, SC 2012,

c 19, s 52 [CEAA, 2012], the forerunner to the IAA. CEAA, 2012 applied to designated projects,

much like the IAA. “Designated projects” were defined to include physical activities (a) carried

out in Canada or on federal lands; (b) designated by regulations or ministerial order and (c) linked

to the same federal authority as specified in those regulations or that order: ss 2(1), 10, 14(2), 84(a).

The Regulations Designating Physical Activities, SOR/2012-147 [the 2012 Regulation] set out the

“Project List.”

[466] CEAA, 2012 added an effects-based trigger: it prohibited proponents from carrying out the

designated project if that act may cause an “environmental effect” within the legislative authority

of Parliament unless the Agency decided no environmental assessment was required or the

proponent complied with the conditions set out in a decision statement: ss 5(1), 6.

[467] Section 5 of CEAA, 2012 identified “environmental” effects essentially identically to the

“effects” now set out in ss 7(1)(a) to (d) of the IAA: a change to various components of the

environment within federal jurisdiction: fish and fish habitat, aquatic species, migratory birds; and

other components set out in Schedule 2. In turn, these components were defined in federal

legislation. Environmental effects also included changes that may be caused to the environment

on federal lands, in another province, or outside Canada. Finally, environment effects included any

change to the environment that may affect the health and socio-economic conditions of Aboriginal

peoples, their heritage, the use of lands and resources for traditional purposes and any structure or

site of historical, archaeological, paleontological, or architectural significance. Certain other

effects were to be taken into account if the designated project required a federal authority to

exercise a power or duty under federal legislation apart from the CEAA, 2012: ss 5(2), 7.

[468] The environmental assessment process was required to consider a wide variety of factors,

including environmental effects, their significance, public comments, mitigation measures, and

Page: 139

alternative means of carrying out the project; and could consider community knowledge and

Indigenous traditional knowledge: s 19.

[469] The decision-maker (typically the Minister, the National Energy Board or Canadian

Nuclear Safety Commission) decided whether the project was likely to cause significant adverse

environmental effects: s 52(1). If so, the decision was referred to the Governor in Council who

decided whether the effects were justified in the circumstances: s 52(4).

[470] CEAA, 2012 provided for jurisdictional cooperation and a joint review panel: ss 18, 40.

D.

IAA and Regulation

[471] In 2019, Parliament replaced CEAA, 2012 with the IAA. The Governor in Council, on the

recommendation of the Minister, promulgated the accompanying Regulation.

[472] Of particular relevance to this Reference is a comparison between the Project Lists created

under CEAA, 2012 and under the IAA. Later, at paras 517-523, I explain the main differences.

[473] While this legislative history does not answer the constitutional question before us, it is

useful context and helps dispel the notion that the incremental progression of environmental

measures to include effects from an emerging form of resource recovery, in situ oil sands projects,

is a colourable effort to control or veto development and management of provincial natural

resources. The additions to the Project List can be seen as incremental responses to changes in the

energy industry, particularly the addition of wind turbines and in situ oil extraction facilities, the

latter being expected to dominate future oil recovery processes.²⁰⁹

III.

The Legislative Scheme of the IAA and Regulation

A. The IAA: Title, Preamble, Purpose, and Impact Assessment Regime

1. The Title, Preamble and Stated Purpose

[474] The title of the IAA is “An Act respecting a federal process for impact assessments and the

prevention of significant adverse environmental effects”.

[475] The Preamble proclaims Canada’s commitment to “fostering sustainability”. The means

chosen to achieve that goal is the “impact assessment” process, described as an “effective means

of integrating scientific information and Indigenous knowledge into decision-making processes”

in respect of “designated projects”. Other expressed values in the Preamble include public

participation; respect for the Indigenous peoples of Canada; cooperation among jurisdictions;

transparent, timely decisions contributing to a positive investment climate; impact assessment

contributing to Canada’s ability to meet environmental and climate change commitments;

²⁰⁹See Exhibit “B” to the Affidavit of Paul Tsounis, sworn December 12, 2019, Alberta Record at C14-15.

Page: 140

innovation and technologies to reduce adverse changes to the environment and to health, social or

economic conditions; and the importance of regional assessments in assessing the effects of

activities and federal policies, plans and programs.

[476] The Purposes of the IAA, itemized in s 6, contain the stated legislative intentions, including

to: foster sustainability; protect the environment and the health, social and economic conditions

within Parliament’s legislative authority from adverse effects caused by a designated project; and

establish an impact assessment regime that takes into account both positive and adverse effects

that may be caused by designated projects. The purposes are fully considered as a matter of

intrinsic evidence showing the legislative purpose at paras 570-571 of this Opinion.

2.

The Impact Assessment Regime

[477] The Impact Assessment Agency (the Agency) is created by s 153(1). Among the Agency’s

many objects is the conduct of impact assessments: ss 155-156.

[478] The impact assessment process involves four stages: planning, preparation of the impact

statement, conduct of the impact assessment, and decision-making, followed by implementation.

[479] The environment means “the components of the Earth, and includes (a) land, water and air,

including all layers of the atmosphere; (b) all organic and inorganic matter and living organisms;

and (c) the interacting natural systems that include components … in paragraphs (a) and (b)”: s 2.

[480] In the IAA, “jurisdiction” includes a variety of entities: a federal authority, agency, or body;

a provincial government, agency or body; an Indigenous governing body; a foreign government;

or an international organization of states: s 2. This term is important because of the scope in the

IAA for cooperation between various “jurisdictions” with authority over environmental effects.

a.

Section 7 and the Regulation’s Project List

[481] Section 7 of the IAA and the Regulation operate together as the trigger of the federal

environmental impact assessment regime.

[482] Section 7 applies to “designated projects”. Under s 109(b), the Governor in Council is

empowered to pass regulations “designating a physical activity or class of physical activities”.

Section 2 of the IAA defines “designated projects” as physical activities that are (a) carried out in

Canada or on federal lands; and (b) are designated by regulations under s 109(b) or by Ministerial

order under s 9(1). Accordingly, it passed the Regulation that sets out the Project List.

[483] In the result, s 7 is triggered or engaged if the proposed “physical activity” or “designated

project” is on the Project List or designated by Ministerial order.

Page: 141

[484] A thumbnail sketch of s 7 of the IAA illustrates its intended jurisdictional reach. By the

terms of s 7(1), a proponent of a designated activity is prohibited from doing anything that may

cause certain effects: (a) a change to certain components of the environment within the legislative

authority of Parliament, including fish and fish habitat, aquatic species, migratory birds; (b) any

change to the environment on federal lands, in another province, or outside Canada; (c) any change

to the environment of Indigenous peoples with impact on physical and cultural heritage, use of

lands for traditional purposes, or structures of significance; (d) any change to health, social or

economic conditions of Indigenous peoples; or (e) any change to a health, social or economic

matter within the legislative authority of Parliament set out in Schedule 3 (as yet undefined).

[485] In the IAA, for s 7, and in this Opinion, “effects” means, “unless the context requires

otherwise, changes to the environment, or to health, social or economic conditions and the positive

and negative consequences of these changes”: s 2.

[486] The IAA environmental assessment regime regulates environmental effects that may be

caused by designated projects on the Project List in these categories listed in the Schedule of the

Regulation:

 National Parks and Protected Areas (ss 1-11);

 Defence (ss 12-17);

 Mines and Metal Mills (ss 18-25);

 Nuclear Facilities (ss 26-29);

 Oil, Gas and Other Fossil Fuels (ss 30-38);

 Electrical Transmission Lines and Pipelines (ss 39-41);

 Renewable Energy (ss 42-45);

 Transport (ss 46-55);

 Hazardous Waste (ss 56-57); and

 Water Projects (ss 58-61).

[487] The Project List contains many matters that are incontrovertibly within federal

constitutional authority and some that are constitutionally contested: certain mines and metal mills;

certain oil, gas and other fossil fuel projects; certain renewable energy projects; new public

highways longer than 75 kilometers; and railways and railway yards of a certain size.

[488] In addition to these designations on the Project List, the Minister has the power to designate

a physical activity that may cause adverse effects within federal jurisdiction, or adverse direct or

incidental effects, or if public concerns related to those effects warrant the designation; before

doing so, the Minister may consider adverse impacts on the rights of Indigenous peoples under s

35 of the Constitution Act, 1982 as well as other relevant assessments: ss 9(1)-(2).

[489] In the IAA, and in this Opinion, “direct or incidental effects” means “effects that are directly

linked or necessarily incidental to a federal authority’s exercise of a power or performance of a

duty or function that would permit the carrying out…of a physical activity or designated project,

Page: 142

or to a federal authority’s provision of financial assistance…for the purpose of enabling that

activity or project to be carried out…”: s 2.

[490] Therefore, s 7, working in conjunction with the Project List, is ground zero of the

environmental impact assessment process: the s 7 process is triggered once a physical activity

becomes a “designated project”. The proponent of such a project must follow the impact

assessment process to lawfully undertake the designated activity or project: ss 10-20.

[491] The proponent of a designated project may undertake activity that may cause the effects set

out in s 7(1) in any of the following circumstances: the Agency decides no impact assessment is

required (s 7(3)(a)); the proponent complies with conditions in a decision statement (s 7(3)(b)); or

it is permitted by the Agency for assessment purposes (s 7(3)(c)). Moreover, effects in s 7(1)(d)

may be undertaken if the change is not adverse and an agreement is reached with an Indigenous

governing body (s 7(4)).

[492] Similar considerations apply with respect to federal authorities being prohibited from

exercising any power or performing any duty or function that allows a designated project to be

carried out under s 8. Such a prohibition ceased with respect to a designated project in either of

the following circumstances: the Agency decides that (a) no impact assessment is necessary, or (b)

an assessment takes place, and the relevant effects are found to be in the public interest.

b.

Phase I. The Planning Phase

i.

Proponent and Agency steps to determine if an impact

assessment is necessary: ss 10-15

[493] The proponent of a designated activity must participate in the Planning Phase. The

proponent provides a project description: s 10. The Agency must provide for public participation

regarding a possible impact assessment (s 11) and offer to consult with any jurisdiction or

Indigenous group that may be affected: s 12. Federal authorities must co-operate with provision of

information: s 13. The Agency must provide a summary of issues to the proponent (s 14), and the

proponent must provide the Agency with a notice setting out how it intends to address the issues

and a detailed description of the designated project: s 15.

ii.

The Agency’s decision as to whether an impact

assessment is necessary: s 16

[494] In deciding whether an impact assessment is necessary, the Agency considers the filed

information, including these factors: the possibility that the designated project “may cause adverse

effects within federal jurisdiction or adverse or incidental effects” [emphasis added]; any adverse

impact on Indigenous peoples; and comments from the public, a jurisdiction or Indigenous group:

s 16(2).

Page: 143

[495] If the Agency decides an impact assessment is necessary (and the Minister does not

approve the substitution of a process under s 31, i.e. of another jurisdiction) the Agency must

provide the proponent with notice of the commencement of the impact assessment, setting out the

information required, including guidelines for studies, plans for cooperation with other

jurisdictions, engagement with Indigenous peoples, public participation, and issuance of permits,

after considering factors set out in s 22: s 18.

[496] The list of s 22 factors is extensive, and includes changes to the “environment or to health,

social or economic conditions” likely to be caused by carrying out the designated project, including

the effects of accidents or malfunctions, cumulative effects caused by the designated project in

combination with other physical activities, mitigation measures, impact on an Indigenous peoples

or their rights, and many more, including “any other matter relevant to the impact assessment that

the Agency requires to be taken into account”.

c.

Phase II. The Impact Statement

[497] The proponent must provide the Agency with an impact statement, including the

information required in the notice: s 19. If the proponent fails to do so, the impact assessment is

terminated: s 20.

[498] The Agency (or the Minister if the impact assessment is referred to a review panel) must

offer to consult and cooperate with any jurisdiction with authority to assess environmental impacts

of a designated project, including those set out in s 2 of the IAA: s 21.

d.

Phase III. The Impact Assessment

[499] Whether the Agency or a Review Panel or a substituted process conducts the impact

assessment, it must consider the factors listed in s 22: ss 33, 42.

[500] The Agency must conduct the impact assessment of the designated project and prepare a

report: ss 25-29. It may use any information available or require further information or study: s 26.

It must ensure the opportunity for meaningful public participation: ss 27-28. The final impact

assessment report must be submitted to the Minister within the 300-day time limit: s 28(2).

i.

The impact assessment report considers adverse effects

and adverse or incidental effects of a designated project

[501] The Agency’s report must describe the effects that are likely to be caused by carrying out

the designated project, and moreover, identify those which are adverse effects within federal

jurisdiction and adverse direct or incidental effects, specifying the extent to which those effects

are significant: s 28(3).

Page: 144

[502] The Agency’s report must also explain how it used Indigenous knowledge (s 28(3.1));

summarize the public comments; recommend mitigation measures and follow-up programs; and

provide its rationale and conclusions: s 28(3.2).

ii.

Substitution and delegation of impact assessment

[503] The Agency may delegate the impact assessment or part of it, or preparation of the report,

to a “jurisdiction” as defined in s 2: s 29.

[504] Upon the request of a “jurisdiction” described in ss 2(c) to (g), (e.g., provincial government

or an Indigenous body), the Minister may approve the substitution of its impact assessment process

if satisfied the process will include consideration of the s 22(1) factors: s 31(1).

[505] The Minister must be satisfied that the report will set out adverse effects within federal

jurisdiction, adverse and incidental effects, and the significance of those effects, and that it

considered Indigenous knowledge: ss 33(2)-(2.1).

[506] If the Minister approves a substituted process, the resulting assessment is an impact

assessment in conformity with the IAA, but the Agency may require more information for the

purposes of decision-making under s 60(1): s 34.

iii.

Impact assessment by a review panel

[507] If it is in the public interest, the Minister may refer an impact assessment to a review panel:

s 36. To decide whether it is in the public interest, the Minister must consider: the extent to which

the effects are adverse; public concerns; opportunities for cooperation with any “jurisdiction” that

has powers, duties, or functions in relation to assessment of the project; and any adverse impact

on the rights of Indigenous peoples under the Constitution Act, 1982: s 36(2). The review panel

will conduct an impact assessment, facilitate public participation, and prepare a report: s 51.

[508] The Minister may also establish a joint review panel with another “jurisdiction” (such as a

province or Indigenous body) with powers to conduct an environmental assessment: s 39.

e.

Phase IV. The Decision

i. Minister’s decision

[509] After the impact assessment report is complete – under the Agency process (s 28(2)) or the

substituted process (s 31) – the Minister decides the following question under s 60(1)(a):

whether the adverse effects within federal jurisdiction – and the adverse direct or

incidental effects – that are indicated in the report are, in light of the factors

Page: 145

in section 63 and the extent to which those effects are significant, in the public

interest. [emphasis added]

The phrase “effects within federal jurisdiction” is defined in s 2 of the IAA and mirrors the effects

listed in s 7(1). Accordingly, the public interest determination is focused on the adverse s 7 effects

caused by the designated project.

ii.

Referral to Governor in Council

[510] Alternatively, the Minister may refer that decision to the Governor in Council: s 60(1)(b).

Moreover, the Minister, in consultation with any responsible Minister, must refer the decision to

Governor in Council where the report is from a review panel (s 55) or where the assessment by the

review panel is terminated (s 59): s 61.

iii.

The Governor in Council’s Decision

[511] The Governor in Council, too, must decide “whether the adverse effects within federal

jurisdiction – and the adverse direct or incidental effects – that are indicated in the report are, in

light of the factors referred to in section 63 and the extent to which those effects are significant, in

the public interest”: s 62 [emphasis added]. Again, the focus is on whether adverse s 7 effects

caused by the designated project are in the public interest.

iv.

The Decision must consider the s 63 Factors

[512] Both the Minister and the Governor in Council must make their public interest

determination in light of the impact assessment report and the following factors outlined in s 63:

(a) the extent to which the designated project contributes to sustainability;

(b) the extent to which the adverse effects within federal jurisdiction and the

adverse direct or incidental effects in the impact assessment report are significant;

(c) the implementation of mitigation measures that the Minister or the Governor in

Council considers appropriate;

(d) the impact of the designated project on Indigenous groups and on Indigenous

peoples as recognized and affirmed by s 35 of the Constitution Act, 1982; and

(e) the extent to which the effects of the designated project hinder or contribute to

Canada’s ability to meet its environmental obligations and commitments in respect

of climate change.

The s 22 factors are considered in preparation of the impact assessment report, and the report is

considered in the ultimate decision that must consider the s 63 factors.

Page: 146

[513] If the Minister or Governor in Council determines that the effects are in the public interest,

the Minister must establish any appropriate conditions, also definitionally linked to federal

jurisdiction: s 64. The proponent must comply. Conditions must include mitigation measures and

a follow-up program and may include an adaptive management plan: ss 64(1)-(4).

[514] The Minister must issue and make public a “decision statement” with detailed reasons for

the determination made under s 60 or 62, conditions, and a timeline: ss 65, 66. Decision statements

are part of the licensing processes under the Nuclear Safety and Control Act, Canadian Energy

Regulator, and Canada Oil and Gas Operations Act: s 67.

v.

Projects by federal authorities

[515] There is an assessment process under the IAA for non-designated projects on federal lands

and international projects proposed by Canada or receiving federal financial assistance: ss 81-91.

There are exemptions for projects that will cause insignificant environmental effects (s 88(1)); or

projects related to national security under the Emergencies Act; or that must be carried out urgently

to protect the environment: s 91.

[516] The IAA provides for regional assessments where the region is entirely on federal lands; or

in part on or outside federal lands, by agreement: ss 92, 93.

B.

What Has Changed: Comparing CEAA, 2012 vs IAA Project Lists

[517] A comparison between the 2012 Regulation Project List and the IAA Regulation Project

List shows changes in four categories: (1) projects where the threshold for application of the

federal environmental assessment regime is raised – that is, there must be more activity or

production for the IAA to apply than was the case under the CEAA, 2012; (2) projects where the

threshold for application of the federal regime remains the same; (3) projects where the federal

regime applies for the first time; and (4) projects that are no longer on the Project List.

[518] First, for some projects, the threshold for application of the federal impact assessment

regime is raised moving from the CEAA, 2012 Regulation Project List to the IAA Project List. For

example, for a pipeline project, the threshold length of pipeline is raised from 40 km or more (2012

Regulation Schedule, ss 46, 47) to 75 km or more (Regulation Schedule, s 41). For a metal mine

project, other than rare earth element mine project, the threshold ore production capacity is raised

from 3000 t/day or more (2012 Regulation Schedule, ss 16(a), 17 (a)) to 5000 t/day (Regulation

Schedule, ss 18(c), 19(c)). For a coal mine project, the threshold coal production capacity is raised

from 3000 t/day or more (2012 Regulation Schedule, ss 16(d), 17(d)) to 5000 t/day or more

(Regulation Schedule, ss 18(a), 19(a)). For a new all-season public highway that requires a new

right of way, the threshold is extended from 50 km (2012 Regulation Schedule, s 25(c)) to 75 km

(Regulation Schedule, s 51).

Page: 147

[519] Second, for some projects, the threshold for application of the federal impact assessment

regime remains the same in the CEAA, 2012 Project List and the IAA Project List. Examples are

oil sands mine projects, oil refinery projects, facilities to produce liquid petroleum projects, and

petroleum storage facilities.

[520] Third, the federal environmental assessment regime applies to some projects designated

for the first time in the IAA Project List, as described in the Regulatory Impact Analysis Statement

(RIAS)²¹⁰accompanying the Regulation. In this category are four types of designated projects.

New under this regime, and apparently the provocateur for this Reference, are in situ oil sands

extraction facilities with a threshold for application of the federal assessment regime being a

bitumen production capacity of 2000 m3/day or more: Regulation Schedule, ss 32, 33. Also added

are other project types that are presumably not controversial: offshore wind turbines (ss 44, 45);

new permanent causeways over 400 m long through navigable waters (s 50); and new entries for

federal protected areas including certain activities in national parks, wildlife areas and migratory

bird sanctuaries (s 1).

[521] Fourth, several project types were removed from the Project List, because “it was

determined that they did not meet the threshold of projects with the greatest potential for effects

in federal jurisdiction related to the environment”: RIAS at 5668. The removed projects include,

for example, decommissioning and abandonment of existing pipelines (regulated by the Canadian

Energy Regulator), certain mines that generally have lower effects than others, and certain projects

regulated by the Canadian Nuclear Safety Commission.

[522] This profile is consistent with Parliament’s objective for the Project List, as set out in the

RIAS at 5661: “to identify those major projects with the greatest potential for adverse effects on

areas of federal jurisdiction related to the environment, so that they can enter into the impact

assessment process” [emphasis added]. The RIAS further notes that the Project List uses a “criteria-

based approach”, with the list under CEAA, 2012 as a starting point, and that the changes to the

Project List “are not expected to significantly change the total number of projects that are subject

to federal impact assessment annually compared to the number under the CEAA, 2012” and that

“[t]he Agency’s analysis suggests there would likely be a small decrease in the number of projects

that may be required to undergo federal impact assessment on an annual basis”: RIAS at 5661.

[523] In my opinion, this review shows that not much has changed between CEAA, 2012 and the

IAA Project List. A federal project-based environmental assessment regime has existed for ten

years, with designated projects on a Project List, that may cause adverse effects said to be in federal

jurisdiction. No proponents of projects affected by this legislation have challenged its

constitutionality or other aspects of its application. Alberta now does so, because effects said to be

in federal jurisdiction that may be caused by in situ oil sands projects are added to the Project List,

an inevitable progression from an environmental protection point of view since in situ projects are

the way of the future in the oil sands. As noted, according to evidence filed by Alberta from Paul

²¹⁰Regulatory Impact Analysis Statement, (2019) C Gaz II, Vol 153, No 17, 5661 at 5664-5665 (published following

Physical Activities Regulations, SOR/2019-285).

Page: 148

Tsounis, an employee with the Alberta Department of Energy, in terms of future development

based on oil reserves, mining is projected to make up 19% and in situ production 81%.²¹¹

IV.

Distribution of Legislative Powers Under the Constitution Act, 1867

[524] For ease of reference, I include the relevant portions of ss 91, 92, 92A and 132 of the

Constitution Act, 1867.

POWERS OF THE PARLIAMENT

Legislative Authority of Parliament of Canada

91. It shall be lawful for the Queen, by and with the Advice and Consent of the

Senate and House of Commons, to make Laws for the Peace, Order, and good

Government of Canada, in relation to all Matters not coming within the Classes of

Subjects by this Act assigned exclusively to the Legislatures of the Provinces; and

for greater Certainty, but not so as to restrict the Generality of the foregoing Terms

of this Section, it is hereby declared that (notwithstanding anything in this Act) the

exclusive Legislative Authority of the Parliament of Canada extends to all Matters

coming within the Classes of Subjects next hereinafter enumerated; that is to say,

[emphasis added].

…

12. Sea Coast and Inland Fisheries.

24. Indians, and Lands reserved for the Indians.

…

29. Such Classes of Subjects as are expressly excepted in the Enumeration of the

Classes of Subjects by this Act assigned exclusively to the Legislatures of the

Provinces.

And any Matter coming within any of the Classes of Subjects enumerated in this

Section shall not be deemed to come within the Class of Matters of a local or private

Nature comprised in the Enumeration of the Classes of Subjects by this Act

assigned exclusively to the Legislatures of the Provinces.

…

211

Natural Resources Canada, “Crude oil facts”, December 10, 2019 (Exhibit “B” to the Affidavit of Paul Tsounis,

sworn December 12, 2019, Record at C14-15).

Page: 149

Treaty Obligations

132. The Parliament and Government of Canada shall have all Powers necessary or

proper for performing the Obligations of Canada or of any Province thereof, as Part

of the British Empire, towards Foreign Countries, arising under Treaties between

the Empire and such Foreign Countries.

EXCLUSIVE POWERS OF PROVINCIAL LEGISLATURES

Subjects of exclusive Provincial Legislation

92. In each Province the Legislature may exclusively make Laws in relation to

Matters coming within the Classes of Subjects next hereinafter enumerated; that is

to say, [emphasis added]

…

10. Local Works and Undertakings other than such as are of the following Classes:

(a) Lines of Steam or other Ships, Railways, Canals, Telegraphs, and other Works

and Undertakings connecting the Province with any other or others of the

Provinces, or extending beyond the Limits of the Province:

(b) Lines of Steam Ships between the Province and any British or Foreign Country:

(c) Such Works as, although wholly situate within the Province, are before or after

their Execution declared by the Parliament of Canada to be for the general

Advantage of Canada or for the Advantage of Two or more of the Provinces.

…

13. Property and Civil Rights in the Province.

…

16. Generally all Matters of a merely local or private Nature in the Province.

…

NON-RENEWABLE NATURAL RESOURCES, FORESTRY RESOURCES

AND ELECTRICAL ENERGY

Laws respecting non-renewable natural resources, forestry resources and

electrical energy

92A. (1) In each province, the legislature may exclusively make laws in relation to

Page: 150

exploration for non-renewable natural resources in the province;

(a)

(b)

development, conservation and management of non-renewable

natural resources and forestry resources in the province, including

laws in relation to the rate of primary production therefrom; and

(c)

development, conservation and management of sites and facilities in

the province for the generation and production of electrical energy.

Export from provinces of resources

(2) In each province, the legislature may make laws in relation to the export from

the province to another part of Canada of the primary production from non-

renewable natural resources and forestry resources in the province and the

production from facilities in the province for the generation of electrical energy,

but such laws may not authorize or provide for discrimination in prices or in

supplies exported to another part of Canada.

Authority of Parliament

(3) Nothing in subsection (2) derogates from the authority of Parliament to enact

laws in relation to the matters referred to in that subsection and, where such a law

of Parliament and a law of a province conflict, the law of Parliament prevails to the

extent of the conflict.

…

“Primary Production”

(5) The expression "primary production" has the meaning assigned by the Sixth

Schedule.

V.

Analysis

A.

General Principles

1. The Architectural Design of the Constitution Act, 1867: Federalism

[525] The Constitution Act, 1867 establishes a governance system of federalism, “regional

diversity within a single nation”: R v Comeau, 2018 SCC 15 at para 85. Canadian federalism

envisages a delicately balanced power sharing arrangement as the bedrock of democracy,

recognizing the diversity of the component parts of the Confederation and the autonomy of

provincial governments to develop their societies within their respective spheres of jurisdiction.

The federal structure of our country also facilities democratic participation by distributing power

to the government “thought to be most suited to achieving the particular societal objective having

Page: 151

regard to this diversity”: Reference Re Secession of Quebec, [1998] 2 SCR 217 at para 58, 161

DLR (4th) 385.

[526] In References re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11 [GGPPA SCC],

Wagner CJC said this on federalism at paras 49-50:

Sections 91 and 92 of the Constitution give expression to the principle of

federalism and divide legislative powers between Parliament and the provincial

legislatures: Reference re Securities Act, 2011 SCC 66, [2011] 3 S.C.R. 837 (“2011

Securities Reference”), at para. 54. Under the division of powers, broad powers

were conferred on the provinces to ensure diversity, while at the same time

reserving to the federal government powers better exercised in relation to the

country as a whole to provide for Canada’s unity: Canadian Western Bank, at

para. 22. Importantly, the principle of federalism is based on a recognition that

within their spheres of jurisdiction, provinces have autonomy to develop their

societies, such as through the exercise of the significant provincial power in relation

to “Property and Civil Rights” under s. 92(13). …

Although early Canadian constitutional decisions by the Judicial Committee of the

Privy Council applied a rigid division of federal-provincial powers as watertight

compartments, this Court has favoured a flexible view of federalism – what is best

described as a modern form of cooperative federalism – that accommodates and

encourages intergovernmental cooperation: 2011 Securities Reference, paras. 56-

58. That being said, the Court has always maintained that flexibility and

cooperation, while important to federalism, cannot override or modify the

constitutional division of powers. As the Court remarked in 2011 Securities

Reference, “[t]he ‘dominant tide’ of flexible federalism, however strong its pull

may be, cannot sweep designated powers out to sea, nor erode the constitutional

balance inherent in the Canadian federal state”: para. 62. It is in light of this

conception of federalism that I approach this case.

2.

The Subject of the Environment: A “Matter” that Falls within both

Federal and Provincial Heads of Constitutional Authority

[527] Section 91 of the Constitution Act, 1867 states that it shall be lawful for Parliament to make

laws for the “Peace, Order, and good Government” (POGG) of Canada in relation to all Matters

not coming within the exclusive jurisdiction of the provinces, and that the “exclusive Legislative

Authority of the Parliament of Canada extends to all Matters” enumerated, including matters such

as “Sea Coast and Inland Fisheries”, and “Indians, and Lands reserved for the Indians”.

[528] Section 92 of the Constitution Act, 1867 states that “in each Province the Legislature may

exclusively make Laws in relation to Matters coming within the Classes of Subjects next

hereinafter enumerated”, including “Local Works and Undertakings” and “Property and Civil

Rights in the Province”. Section 92A(1) assigns exclusive jurisdiction to the provinces over “non-

Page: 152

renewable natural resources”: “the legislature may exclusively make laws in relation to (a)

exploration for non-renewable natural resources in the province” and “(b) development,

conservation and management of non-renewable natural resources and forestry resources in the

province, including laws in relation to the rate of primary production therefrom”.

[529] Canada and the provinces have enacted environmental assessment legislation to assess the

environmental impact of activities and projects. As early as 1992, in the Oldman River decision,

the Supreme Court of Canada endorsed the authority of both Parliament and the provincial

legislatures to enact environmental protection legislation directed at adverse impacts on the

environment.

[530] Oldman River concerned the construction of a dam in southern Alberta. After study,

planning, and environmental assessment under provincial legislation, Alberta authorized the

construction of the dam. Though a provincial assessment had been done, because the project

affected navigable waters, fisheries, and “Indians and Indian lands”, federal interests were

engaged, and the dam proposal was reviewed by the Regional Screening and Co-Ordinating

Committee of the federal Department of the Environment. The building of the dam was well

underway when the Friends of the Oldman River Society brought an application for judicial review

to compel a public environmental assessment pursuant to the Guidelines Order. The Society

argued that the Minister of Transport must approve the project under the Navigable Waters

Protection Act, RSC 1985, c N-22, and in so doing was required to provide an assessment under

the Guidelines Order; and that the Minister of the Environment had a similar duty under the

Fisheries Act, RSC, 1985, c F-14: Oldman River at 22. The constitutional question was whether

the Guidelines Order was so broad as to offend ss 92 and 92A of the Constitution Act, 1867: Ibid

at 31, 62. The Supreme Court of Canada held that the Guidelines Order was constitutionally valid.

[531] On the question of where the matter of the environment falls under the Constitution Act,

1867, La Forest J, writing for the majority, wrote that the environment is not an enumerated head

of power but touches several heads of power assigned to the federal government and the provinces:

Ibid at 63-67. He noted that the environment is a complex, “abstruse” matter, with aspects that

may come within both provincial jurisdiction and federal jurisdiction: Ibid at 64.

[532] The Court in Oldman River also endorsed a broad view of the “environment”, at 37:

I cannot accept that the concept of environmental quality is confined to the

biophysical environment alone; such an interpretation is unduly myopic and

contrary to the generally held view that the "environment" is a diffuse subject

matter; ...

Surely the potential consequences for a community's livelihood, health and other

social matters from environmental change are integral to decision-making on

matters affecting environmental quality, subject, of course, to the constitutional

imperatives…

Page: 153

[533] Professor Hogg similarly describes the matter of the “environment” broadly, at § 30:31:

The environment, comprising as it does “all that is around us”, is too diffuse a topic

to be assigned by the Constitution exclusively to one level of government. Like

inflation, it is an aggregate of matters, which come within various classes of

subjects, some within federal jurisdiction and others within provincial jurisdiction.

[534] La Forest J returned to the topic of the breadth of environmental concerns, touching on

globalism, Canadian values, and pollution as a “sweeping subject”, in Hydro-Quebec at para 154:

In Crown Zellerbach, I expressed concern with the possibility of allocating

legislative power respecting environmental pollution exclusively to Parliament. I

would be equally concerned with an interpretation of the Constitution that

effectively allocated to the provinces, under general powers such as property and

civil rights, control over the environment in a manner that prevented Parliament

from exercising the leadership role expected of it by the international community

and its role in protecting the basic values of Canadians regarding the environment

through the instrumentality of the criminal law power. Great sensitivity is required

in this area since, as Professor Lederman has rightly observed, environmental

pollution “is no limited subject or theme, [it] is a sweeping subject or theme

virtually all-pervasive in its legislative implications”; see W. R. Lederman, “Unity

and Diversity in Canadian Federalism: Ideals and Methods of Moderation” (1975),

53 Can. Bar Rev. 597, at p. 610.

[535] Applicable to this Reference is the Court’s recognition in Oldman River at 69 that projects

may have implications for both federal and provincial heads of power:

What is important is to determine whether either level of government may

legislate. One may legislate in regard to provincial aspects, the other federal

aspects. Although local projects will generally fall within provincial

responsibility, federal participation will be required if the project impinges on an

area of federal jurisdiction as is the case here [emphasis added].

[536] The Court characterized the Guidelines Order as having two fundamental aspects: a

substantive aspect dealing with environmental impact assessment “to facilitate decision-making

under the federal head of power through which a proposal is regulated” (and sustainable under the

relevant s 91 head of power), and a “procedural or organizational element that coordinates the

process of assessment, which can in any given case touch upon several areas of federal

responsibility, under the auspices of a designated decision maker, or in the vernacular of

the Guidelines Order, the ‘initiating department’”: Oldman River at 73. The latter facet of the

legislation was described as having “as its object the regulation of the institutions and agencies of

the Government of Canada as to the manner in which they perform their administrative functions

and duties” and “unquestionably intra vires Parliament … either as an adjunct of the particular

Page: 154

legislative powers involved, or, in any event, … justifiable under the residuary power in s. 91”:

Ibid at 74.

[537] As noted by Professor Hogg, “the effect of the Oldman River decision is to confer on the

federal Parliament the power to provide for environmental assessment of any project that has any

effect on any matter within federal jurisdiction”: Hogg at § 30.32.

[538] In 2010, federal environmental assessment legislation was again challenged in Moses,

when a proponent sought to develop a vanadium mine in Quebec. One of the issues was the

applicability of CEAA, 1992. Canada said that a federal assessment was required because the mine

was going to impact fish, requiring authorization from the Minister of Fisheries under s 35(2) of

the Fisheries Act. While the details of Moses are set out below when considering whether an

external legislative trigger tied to a federal head of power is constitutionally required (for example,

the Fisheries Act), of relevance here is the double aspect doctrine. In Moses, the Court recognized

that some activities or projects may have both a provincial and federal aspect over which each

level of government can validly exercise law-making authority.

[539] The majority in Moses observed that a vanadium mining project, considered in isolation,

would be seen to fall within provincial jurisdiction. However, where the project has an adverse

impact on fish habitat, the federal environmental regulatory system is engaged. Though resource

projects may fall within provincial jurisdiction under s 92A, “a mining project anywhere in Canada

that puts at risk fish habitat could not proceed without a permit from the federal Fisheries Minister,

which he or she could not issue except after compliance with the CEAA”: Moses at para 36. The

non-renewable resources aspect falls within provincial jurisdiction, while the “fisheries aspect”

falls within federal jurisdiction: ibid. The dissent too agreed on this general point. Stating that

“[t]he inquiry into whether federal jurisdiction can be validly invoked turns on whether the activity

... can be viewed as having a federal aspect” (para 121), it found that “the Project’s impact on fish

habitat engages federal jurisdiction” (para 124).

3.

Federal and Provincial Regulation of Environmental Effects:

Cooperative Federalism

[540] After Oldman River was decided in January of 1992, Hogg noted that “[t]he case for

environmental impact assessment by a single, jointly-established, federal-provincial agency, with

comprehensive powers delegated by both levels of government could not be clearer”: §30:32. Soon

thereafter, on June 23, 1992, Canada passed CEAA, 1992, which, as noted, contemplated joint

review panels between Canada and the provinces. Three days later Alberta did the same:

Environmental Protection and Enhancement Act, SA 1992, c E-13.3, s 55.

[541] In 1993, Alberta and Canada signed the Canada-Alberta Agreement for Environmental

Assessment Cooperation, a bilateral agreement which detailed the operation of joint review panels

to assess projects in cases involving overlapping jurisdiction. And in 1994, the Supreme Court of

Page: 155

Canada concluded in National Energy Board at 193 that two levels of government legislating at

once in relation to environmental assessment is neither “unusual nor unworkable”.

[542] This history illustrates both the reality of overlapping federal-provincial jurisdiction when

it comes to the environmental assessment of certain local projects and concomitant recognition by

Canada and provinces like Alberta that such overlap militates in favour of cooperation.

[543] In Reference Re Pan-Canadian Securities Regulation, 2018 SCC 48 at paras 17-18 [Pan-

Canadian Securities Reference], the Supreme Court of Canada recognized that the principle of

cooperative federalism favors a harmonious reading of cooperative regulating schemes enacted by

the provincial and federal governments, enabling each to operate comfortably within its own

sphere:

Cooperative federalism is an interpretative aid that is used when “interpreting

constitutional texts to consider how different interpretations impact the balance

between federal and provincial interests” (R. v. Comeau, 2018 SCC 15, [2018] 1

S.C.R. 342, para. 78). Where possible, courts should favour a harmonious reading

of statutes enacted by the federal and provincial governments which allows for

them to operate concurrently (Rogers Communications Inc. v. Chateauguay (City),

2016 SCC 23, [2016] 1 S.C.R. 467, at para. 38). …

Cooperative federalism is often applied “to facilitate interlocking federal and

provincial legislative schemes and to avoid unnecessary constraints on provincial

legislative action” (Quebec (Attorney General) v. Canada (Attorney General), 2015

SCC 14, [2015] 1 S.C.R. 693, at paras. 17-19). Broadly speaking, it “accommodates

overlapping jurisdiction and encourages intergovernmental cooperation”, and

therefore discourages courts from interfering with cooperative regulatory schemes

so long as they are not incompatible with the boundaries dictated by the

Constitution Act, 1867 [authorities omitted]. …

See also Reference re Genetic Non-Discrimination Act, 2020 SCC 17 at paras 22-24.

[544] A cautionary gloss was drawn over the principle of co-operative federalism in Rogers

Communications Inc v Châteauquay (City), 2016 SCC 23 at para 39:

[A]lthough co-operative federalism has become a principle that the courts have

invoked to provide flexibility for the interpretation and application of the

constitutional doctrines relating to the division of powers, such as federal

paramountcy and inter jurisdictional immunity, it can neither override nor modify

the division of powers itself. It cannot be seen as imposing limits on the valid

exercise of legislative authority: Quebec (Attorney General) v. Canada (Attorney

General), at paras. 17-19. …

Page: 156

[545] The principle of cooperative federalism supports concurrent operation of environmental

protection statutes enacted by federal and provincial governments so that a single project may

variously engage environmental regulations passed by both levels of government, each regulating

a distinct and separate aspect of the project. Though there will be overlap, it is dealt with through

cooperation and federal–provincial agreements.

[546] In my view, environmental assessment regimes may be seen as paradigmatic examples of

co-operative federalism. The question is whether Parliament has overstepped its bounds as

circumscribed by s 91 of the Constitution Act, 1867, in the IAA and Regulation, or provisions

within it. The majority of the Court in Oldman River addressed this point, (at 72):

Because of its auxiliary nature, environmental impact assessment can only affect

matters that are “truly in relation to an institution or activity that is otherwise

within [federal] legislative jurisdiction”; see Devine v. Quebec (Attorney General),

[1988] 2 S.C.R. 790, at p. 808. Given the necessary element of proximity that must

exist between the impact assessment process and the subject matter of federal

jurisdiction involved, this legislation can, in my view, be supported by the particular

head of federal power invoked in each instance. In particular, the Guidelines

Order prescribes a close nexus between the social effects that may be examined

and the environmental effects generally. Section 4 requires that the social effects

examined at the initial assessment stage be “directly related” to the potential

environmental effects of a proposal, as does s. 25 in respect of the terms of reference

under which an environmental assessment panel may operate. Moreover, where

the Guidelines Order has application to a proposal because it affects an area of

federal jurisdiction, as opposed to the other three bases for application enumerated

in s. 6, the environmental effects to be studied can only be those which may have

an impact on the areas of federal responsibility affected [emphasis added].

[547] In Oldman River, the activity subject to environmental assessment – a dam across the river

– was a project wholly within the province of Alberta but with environmental effects upon both

federal and provincial interests. Both federal and provincial environmental legislation was

implicated. This Reference, too, concerns both federal environmental assessment legislation, the

IAA, and provincial environmental legislation, in Alberta, the Environmental Protection and

Enhancement Act, RSA 2000, c E-12 [EPEA], as well similar legislation in other provinces.

4.

The Presumption of Constitutionality

[548] The presumption of constitutionality favors a constitutional interpretation of the IAA. The

presumption of constitutionality can be relevant to how the matter of an impugned law is

characterized: Hogg at § 15:13. As noted in Siemens v Manitoba (Attorney General), 2003 SCC 3

at para 33, “[w]hen faced with two plausible characterizations of a law”, courts should normally

favour the one “which supports the law’s constitutional validity”. Similarly, where a legislative

text is capable of bearing a meaning that makes it constitutionally valid, that meaning should be

Page: 157

adopted: Desgagnés Transport Inc v Wärtsilä Canada Inc, 2019 SCC 58 at para 28 [Desgagnés

Transport].

[549] An interpretation of the IAA as an environmental assessment regime intended to regulate

environmental effects in federal jurisdiction and to work in concert with interlocking provincial

environmental processes that are intended to regulate effects in provincial jurisdiction is consonant

with the double aspect doctrine, cooperative federalism, and the presumption of constitutionality.

B.

Validity of the IAA and Regulation

[550] The constitutional questions posed in this Reference treat the enabling legislation, the IAA,

and its subsidiary Regulation separately, and Alberta’s approach is to analyse them separately.

However, as a review of the legislation makes crystal clear, the IAA and the Regulation are

legislatively a piece of whole cloth, woven together by their terms, informing each others’ content,

and intended to operate in an integrated fashion. The trigger of the assessment process is s 7

animated by the Project List of physical activities or designated projects in the Regulation;

“trigger” means the assessment process springs into action once a proponent advances a proposal

for a designated project. The enabling legislation, the IAA, and its subsidiary legislation, the

Regulation, must be read and interpreted together to discern Parliament’s true legislative intent.

[551] Alberta submits that, even if the IAA is found constitutionally valid, the Regulation itself

“fail[s] to establish any boundaries restricting the application of the IAA to projects clearly within

federal jurisdiction and as such should be found ultra vires the Parliament of Canada”: Factum at

para 120. This approach, which would require the separate consideration of the constitutionality

of the IAA and the Regulation, has been rejected in cases where a statute and the regulation

promulgated under it “were intertwined from the start”, and where “[t]he regulations gave concrete

meaning and content to the statute and were indispensable to its classification for constitutional

purposes”: R v Morgentaler, [1993] 3 SCR 463 at 480-81, 107 DLR (4th) 537 [Morgentaler cited

to SCR], referring to Texada Mines Ltd v Attorney-General of British Columbia, [1960] SCR 713,

24 DLR (2d) 81.

[552] Regulations “complete and implement” the statutory scheme and therefore must be read

within the context of the scheme, having regard to the language and purpose of their enabling Act:

Ruth Sullivan, Sullivan on the Construction of Statutes, 6th ed (Markham, LexisNexis Canada Inc,

2014) at 413. An impugned provision is not to be considered in isolation. Rather, it must be situated

in context – within the statutory scheme as a whole and the legislative history: Ward v Canada

(Attorney General), 2002 SCC 17 at paras 19-23, [2002] 1 SCR 569 [Ward].

[553] Similarly, in Syncrude Canada Ltd v Canada (Attorney General), 2016 FCA 160 at para

33, the Federal Court of Appeal rejected the argument that an impugned provision must be read

first in isolation, and only if the pith and substance cannot be resolved in that manner is it

appropriate to examine the provision in the context of the entire scheme – a proposed methodology

described by the Court as “problematic as a matter of doctrine”. A regulation that on its face, and

Page: 158

when read alone, might appear to be regulating a matter within the jurisdiction of the other level

of government must be considered in its proper context, in light of the entire scheme, to understand

its true purpose and effect: Ibid at para 34.

[554] Alberta’s approach to the Regulation poses the wrong question. The IAA and the

Regulation work together and are informed by each other; they must be read and interpreted

together. There is one legislative scheme to characterize here, and one “pith and substance”.

[555] As to the constitutional analysis of the legislative regime, Hogg provides the approach

required by this Reference: Hogg at §15:4. Sections 91 and 92 of the Constitution Act, 1867,

respectively, set out the distribution of powers between the federal Parliament and the provincial

legislatures. Each section lists the kinds of law competent to each level of government, giving

legislative authority to “matters” coming within “classes of subjects”. There are two steps involved

in judicial review: “the first step is to identify the ‘matter’ (or pith and substance) of the challenged

law; the second step is to assign the matter to one of the ‘classes of subjects’ (or heads of legislative

power)”: Ibid. As explained by Professor Hogg:

The challenged statute is characterized … as in relation to a "matter" (step 1) only

to determine whether it is authorized by some head of power in the Constitution.

The "classes of subjects" are interpreted (step 2) only to determine which one will

accommodate the matter of a particular statute. The process is, in Laskin's words,

"an interlocking one, in which the British North America Act and the challenged

legislation react on one another and fix each other's meaning". Nevertheless, for

purposes of analysis it is necessary to recognize that two steps are involved: the

characterization of the challenged law (step 1) and the interpretation of the power-

distributing provisions of the Constitution (step 2).

[556] Each of the two steps – characterization of the legislation and classification of the matter

under federal and provincial heads of power – will be considered in turn.

1.

Characterization

[557] Both Parliament and the provincial legislatures have constitutional authority to pass

legislation concerned with adverse impacts on the environment caused by physical activities or

projects. To determine whether the IAA and Regulation are within Parliament’s constitutional

authority, first it is necessary to determine the “pith and substance” of the impugned law.

[558] The “pith and substance” of a legislative provision is “the dominant or most important

characteristic of the challenged law”: Oldman River at 62; Hogg at §15:5.

[559] In Securities Reference, the Supreme Court of Canada described the “pith and substance”

analysis as follows at paras 63–64:

Page: 159

The “pith and substance” analysis is used by Canadian courts to determine the

constitutional validity of legislation from a division of powers perspective. The

analysis looks at the purpose and effects of the law to identify its “main thrust” as

a first step in determining whether a law falls within a particular head of power….

Incidental effects may be discounted; the search is for the main thrust of the law

(Canadian Western Bank, at para. 28).

Intrinsic evidence, such as purpose clauses and the general structure of the statute,

may reveal the purpose of a law. Extrinsic evidence, such as Hansard or other

accounts of the legislative process, may also assist in determining a

law’s purpose. The effects of a law include the legal effect of the text as well as

practical consequences of the application of the statute (Lacombe, at

para. 20; Kitkatla, at para. 54).

[560] In GGPPA SCC, the Court reiterates that the “pith and substance” should be described as

precisely as possible, capturing the law’s essential character in terms that are “as precise as the

law will allow”: para 52. The call for precision is further refined at para 69: “[w]hen characterizing

a matter, a court must strive to be as precise as possible, because a precise statement more

accurately reflects the true nature of what Parliament did and what it intended to do”. The Supreme

Court was critical of this Court’s characterization of the legislation at issue as being about “GHG

emissions” generally, finding it was instead about “establishing minimum national standards of

GHG price stringency to reduce GHG emissions”: para 80. Moreover, “[c]ourts should generally

hesitate to attribute to Parliament an intention to occupy an entire field”: para 65 [emphasis added].

I take this to mean that courts should be reluctant to find the purpose of federal legislation is to

legislate over an entire subject matter, in that case, the regulation of GHG emissions.

[561] Alberta describes the pith and substance or dominant character of the IAA as:

Establishment of a comprehensive impact assessment regime that requires

proposed resource developments and infrastructure projects to undergo a broad

ranging assessment of their impacts, environmental and other, and to subject those

projects to federal oversight and approval.

[562] Alberta makes a similar argument to the one it made in the GGPPA Reference. There,

Alberta essentially argued that Canada was trying to occupy the entire field of GHG regulation

because if the “pith and substance” of the Greenhouse Gas Pollution Pricing Act, SC 2018, c 12,

s 186 is “regulating GHGs”, and that is a matter of national concern under the POGG power, then

provinces retain no ability to regulate GHGs (since the POGG power is exclusive and plenary).

Similarly, by claiming the IAA is “comprehensive”, Alberta is essentially arguing that Canada is

trying to take over the entire field of environmental assessment. That is, a federal decision-maker

will make a determination about all aspects of a project such that there is nothing left for a

provincial decision-maker to consider. The question is whether that is so. Certainly, the IAA can

be interpreted so that the two assessment regimes operate cooperatively.

Page: 160

[563] Further, Alberta’s formulation of the pith and substance of the IAA and the Regulation

assumes or suggests that their dominant purpose is to assert federal control over resource

development and infrastructure projects. Alberta’s version of the pith and substance of the IAA and

Regulation is not “as precise as the law will allow”, but is broad and general, missing the essential

purpose of this project-based environmental assessment regime: to determine whether certain

adverse environmental effects of designated projects are in the public interest - worth the

environmental cost - to warrant government authorization to proceed.

[564] On the other hand, Canada describes the “pith and substance”, or dominant character, of

the IAA as to establish a federal environmental assessment process to protect against adverse

environmental effects:

a. on matters within federal jurisdiction (as listed in s 7).

b. in the exercise of federal regulatory power in other existing federal schemes

(s 8); and

c. in relation to projects carried out on federal Crown lands, or by federal

authorities outside Canada, or which engage the provision of financial

assistance (ss 81-91).

[565] While Canada’s view of the IAA and Regulation is more precise, it adverts to the effects of

the environmental assessment regime and pre-judges the question of whether the essential

character of the legislation is constitutionally permissible, an analysis that should occur at the

classification stage.

[566] In ascertaining the pith and substance of the IAA and Regulation, I consider first the

purpose of the law, as revealed by intrinsic and extrinsic evidence, and then the effects of the law,

both legal and practical.

a.

Purpose of the IAA and Regulation

i. Intrinsic evidence

The purpose of the IAA and Regulation shown through the Title,

Preamble and Purpose provision

[567] Parliament’s express purpose in passing the IAA is in its title, its preamble, and the

statement of purpose in s 6.

[568] The full name of the IAA is helpful in identifying Parliament’s purpose: GGPPA SCC at

para 58. It is “An Act respecting a federal process for impact assessment and the prevention of

significant adverse environmental effects”. The title tells us that the essential goal of the IAA is an

environmental assessment regime for the “prevention of significant adverse environmental

Page: 161

effects”. The “significance” of the adverse environmental effects plays forward through the IAA

decision-making process as a factor in determining whether a project will be authorized: s 63(b).

[569] The preamble to a statute is “useful in constitutional litigation to illustrate the ‘mischief’

the legislation is designed to cure and the goals Parliament sought to achieve”: GGPPA SCC at

para 59. The content of the IAA Preamble is summarized at para 476 above. It can best be described

as an expression of Canada’s commitment to, or recognition of, a set of high-level values and

principles that underlie its project-based environmental assessment regime.

[570] The IAA Purpose section carries these values forward by stating Parliament’s general and

specific goals – what the Act intends to accomplish:

 to foster sustainability: s 6(a);

 to protect components of the environment and the health, social and economic conditions

within federal authority from adverse effects caused by a designated project: s 6(b);

 to establish a fair, predictable and efficient process for impact assessments in the interests

of competitiveness, innovation, and sustainable economic development: s 6(b.1);

 to ensure that impact assessments consider all positive and adverse effects: s 6(c);

 to ensure federal authorities avoid adverse effects in federal jurisdiction or adverse or

incidental effects: s 6(d);

 to promote cooperation between federal, provincial and Indigenous governments with

respect to impact assessment: s 6(e);

 to promote communication and cooperation with Indigenous peoples and respect their s 35

rights during impact assessment: ss 6(f), (g);

 to ensure public participation during impact assessment; to ensure impact assessment is

completed in a timely manner: s 6(h);

 to ensure consideration of scientific, Indigenous and community knowledge: s 6(j);

 to ensure consideration of alternative means of carrying out the designated project: s 6(k);

 to ensure federal projects (s 81) avoid significant adverse environmental effects; to ensure

assessment of cumulative effects of designated projects and consideration of federal

policies and programs in impact assessments: ss 6(l), (m);

 to encourage improvement of impact assessment through follow-up programs: s 6(n).

[571] Parliament’s purpose or goal in passing the IAA and the Regulation is also demonstrated

by operation of the project-based environmental assessment regime: its trigger in s 7 in concert

with the Regulation Project List; its effectuation through the environmental assessment process;

its interjurisdictional mechanisms; and its multifactorial approach at the decision-making stage.

Page: 162

ii.

Extrinsic evidence

[572] In determining legislative purpose, a court may consider the legislative history of a statute,

including government policy papers and legislative debates: GGPPA SCC at para 62.

[573] A review of the extrinsic evidence relevant to the enactment of Bill C-69 confirms that

Parliament’s purpose was to establish a federal environmental assessment regime with several

related aims: to foster sustainability and facilitate planning and information gathering for projects

that may have effects on areas within federal jurisdiction, where the public interest involves

considering both positive and negative effects.

[574] Comments by the Minister of the Environment during legislative debates on Bill 69 explain

the nature of the impact assessment process and its focus on the effects of projects under review.

For example, in her Introductory Remarks to the Standing Committee on Environment and

Sustainable Development on May 3, 2018, the Minister described Bill C-69 as follows:

The Government of Canada is committed to ensuring that Canada's major projects

are developed in a way that is informed by rigorous science, evidence, and

[I]ndigenous knowledge. They must also be consistent with Canada’s climate plan,

protect our rich natural environment, respect the rights of [I]ndigenous peoples, and

support our economy.

Our priority remains to effectively advance both Canada's economic progress and

our environmental responsibilities. These values are at the core of Bill C-69. …

Bill C-69 restores robust oversight and thorough impact assessments that take into

consideration not only the negative environmental effects of a project, but also the

environmental, economic, health and social impacts.

Impact assessments will also consider how projects are consistent with our

environmental obligations and climate change commitments, including with the

Paris Agreement.²¹²

[575] In an earlier standing committee meeting, the Minister had explained that the review of a

project’s impacts is relevant to a sustainability determination, stating that “the sustainability test

does require looking at the positive and negative impacts, including economic, environmental,

social and health impacts”.²¹³She further noted that “[d]ecisions will be based on whether a

project with adverse effects is in the public interest” and include consideration of “the project's

212

House of Commons, Standing Committee on Environment and Sustainable Development, Evidence, 42-1, No 110

(3 May 2018) at 1-2 (Hon Catherine McKenna).

213

House of Commons, Standing Committee on Environment and Sustainable Development, Evidence, 42-1, No 099

(22 March 2018) at 17 (Hon Catherine McKenna).

Page: 163

contribution to sustainability, impacts on [I]ndigenous peoples and their rights, and mitigation

measures that are proposed to reduce the project’s impacts on Canada’s ability to meet its

environmental obligations and climate change commitments”.²¹⁴

[576] At Third Reading in the House of Commons, the Minister noted that the Bill improves

decision making through “project reviews that consider a wide range of positive and negative

impacts on the economy, health, [I]ndigenous rights, and communities, in addition to the

environment”²¹⁵, all factors said to play into the assessment of whether a project is in the public

interest.²¹⁶This theme re-emerged at a Senate Standing Committee, where the Minister noted that

impact assessments will consider effects on the environment, and the “long-term social, health and

economic impacts”, including “positive economic contributions”, all of which inform a decision

on sustainability.²¹⁷

[577] The legislative debates also emphasize the focus on information gathering and planning

built into the impact assessment process as well as inter-jurisdictional collaborations. For example,

before the House of Commons Standing Committee, the Minister noted:

… project reviews need to be predictable, provide regulatory certainty, and work

across multiple jurisdictions. The new legislation proposes to have one agency, the

impact assessment agency of Canada, lead all major project reviews and coordinate

with [I]ndigenous peoples. One project, one assessment, is a guiding principle to

drive co-operative reviews and avoid duplication[...]

A new early planning phase will engage jurisdictions, potentially affected

[I]ndigenous peoples and communities, to ensure that key issues are raised early so

that project proponents know at the outset what is expected from them.²¹⁸

214

Ibid at 2.

215

“Bill C-69 An Act to enact the Impact Assessment Act and the Canadian Energy Regulatory Act, to amend the

Navigation Protection Act and to make consequential amendments to other Acts”, 3rd reading, House of Commons

Debates, 42-1, No 313 (12 June 2018) at 20775.

²¹⁶Ibid at 20778.

²¹⁷The Senate, Standing Senate Committee on Energy, the Environment and Natural Resources, Evidence, 42-1, No

68 (2 May 2019) (Hon Catherine McKenna).

218

House of Commons, Standing Committee on Environment and Sustainable Development, Evidence, 42-1, No 099

(22 March 2018) at 2 (Hon Catherine McKenna).

Page: 164

[578] The centrality of early planning and engagement was reiterated by the Minister in her

introductory remarks at Third Reading.²¹⁹

[579] Early planning, information gathering, and collaboration arose again at the Standing Senate

Committee on Energy, the Environment and Natural Resources, where the Minister’s introductory

remarks included the following:

… there is broad support for the early planning phase, an essential component of

the new impact assessment system that reflects what we know to be best practice

for industry. Early planning provides for a structured process, led by the impact

assessment agency, to engage with stakeholders, potentially affected Indigenous

peoples and communities, regulators and cooperating jurisdictions. It ensures key

issues are raised early in the process, leading to better project design and ensuring

project proponents know what’s expected of them at the outset. Additionally,

upfront investment in early planning allows for faster reviews and more timely

decisions. This is a key element of our “one project, one review” approach, ensuring

the needs of all partners, whether provinces or federal life cycle regulators are met

through a single process ... .²²⁰

[580] The focus on effects within federal jurisdiction was also a subject of discussion in the

legislative debates on Bill C-69. Before the Senate Standing Committee on May 2, 2019, the

Minister noted that the environment is a joint field of jurisdiction between the provinces and the

federal government and confirmed that the legislative regime would examine “impacts in fields of

federal jurisdiction”. In discussing the Project List in March 2018, the Minister noted that

consultation on the List was ongoing, but that the focus would be, not on federal funding, but on

“projects that have the most potential for adverse effects in areas of federal jurisdiction related to

the environment”.²²¹Before the May 3, 2018, House of Commons Standing Committee, the

Minister reiterated that consultation on the Project List focused on the review of “major projects

with the potential for adverse environmental impacts that are clearly within federal jurisdiction”.²²²

[581] The RIAS bears out this approach, identifying the rationale for the Project List as “to

identify those major projects with the greatest potential for adverse effects on areas of federal

jurisdiction related to the environment, so that they can enter into the impact assessment process”:

RIAS at 5661 [emphasis added]. The RIAS further notes that the Project List uses a “criteria-based

²¹⁹“Bill C-69 An Act to enact the Impact Assessment Act and the Canadian Energy Regulatory Act, to amend the

Navigation Protection Act and to make consequential amendments to other Acts”, 3rd reading, House of Commons

Debates, 42-1, No 313 (12 June 2018) at 20774-8 (Hon Catherine McKenna).

220

The Senate, Standing Senate Committee on Energy, the Environment and Natural Resources, Evidence, 42-1, No

68 (2 May 2019) (Hon Catherine McKenna).

221

House of Commons Standing Committee (22 March 2018) at 18.

222

House of Commons Standing Committee (3 May 2018) at 7.

Page: 165

approach”, using the List under CEAA 2012 as a starting point, and that the changes to the Project

List “are not expected to significantly change the total number of projects that are subject to federal

impact assessment annually compared to the number under the CEAA, 2012”: RIAS at 5661.

iii.

Conclusion as to purpose of the IAA and Regulation

[582] The extrinsic and intrinsic evidence shows that Parliament’s purpose in passing the IAA

and its companion Regulation is to foster sustainability by establishing a federal project-based

impact assessment regime that seeks to limit adverse effects on identified areas of claimed federal

jurisdiction by subjecting certain projects to review to determine whether said effects are in the

public interest.

b.

Effects of the IAA and Regulation

[583] Concisely described, a “law’s legal effects are discerned from its provisions by asking

“how the legislation as a whole affects the rights and liabilities of those subject to its terms”:

GGPPA SCC at para 70, citing Morgentaler at 482. Conversely, its practical effects are “‘side’

effects flow[ing] from the application of the statute which are not direct effects of the provisions

of the statute itself”: GGPPA SCC at para 77, citing Kitkatla Band v British Columbia (Minister

of Small Business, Tourism and Culture), 2002 SCC 31 at para 54.

i.

The effects of the IAA and Regulation shown through s 7

and the Project List

[584] Section 7 is engaged when a proponent’s proposal for development is a “designated

project”, usually because it is on the Project List under the Regulation. The proposed project is

then within the purview of the IAA and the impact assessment process is triggered. A proponent

must follow the legislative regime, a prescription for authorization, before it can proceed lawfully

(s 10) and may only proceed with the project when authorized, most notably if the Agency decides

no impact assessment is required (s 7(3)(a)) or the proponent complies with conditions in a

decision statement (s 7(3)(b)).

[585] The legal effect of the IAA and Regulation is that proponents of “physical activities” or

“designated projects” that may cause effects on the environment in purported areas of federal

jurisdiction must participate in the federal environmental assessment regime or face penalties.

ii.

The effects of the IAA and Regulation shown through the

environmental assessment process

[586] One effect of the IAA and Regulation is that the proponent of a “designated project” may

be required to proceed through the four phases of the impact assessment regime under the auspices

of the Agency: planning, preparation of the impact statement, conduct of the impact assessment,

issuance of the decision, followed by implementation of the decision. The proponent must work

Page: 166

with the Agency through the steps necessary for a determination as to whether an impact

assessment is necessary: ss 10-15, 16(1)-(2).

[587] A second effect is that if the Agency decides an impact assessment is necessary (and the

Minister does not approve the substitution of a process under s 31), the Agency must provide the

proponent with a notice of the commencement of the impact assessment, setting out the

information required and plans for cooperation with other jurisdictions, Indigenous peoples, public

participation, and issuance of permits: s 18. The Agency will determine the scope of the s 22 factors

that the proponent must address in its impact statement, including the mandatory factors,

Indigenous and community knowledge, comments from the public and other jurisdictions, as well

as regional, strategic, and Indigenous assessments: s 18(1.2).

[588] The proponent must then address and provide information and any plans for cooperation

with other jurisdictions as required by the Agency. These too are legal effects.

iii.

The effects of the IAA shown through decision-making:

authorization of projects in the public interest

[589] Though the information-gathering and factors considered in the impact assessment process

are broad ranging, s 28 (3) of the IAA requires the impact assessment report to focus on significant

effects within federal jurisdiction. Both the Minister and Governor in Council must base their

public interest decisions on the impact assessment report and the s 63 factors. The proponent will

need to marshal its case to address the s 63 factors that will form the basis of decision-making.

iv.

Conclusion as to effects of the IAA and Regulation

[590] In conclusion, the effects of the IAA and Regulation are found in its procedural and

substantive content. There are legal effects: once the IAA regime is triggered by s 7 and the Project

List, proponents of projects identified on the Project List are prohibited from proceeding unless

and until they have complied with the environmental assessment regime in the IAA. Failure to

comply with the legal requirements of the IAA may result in penalties or failure to obtain the

necessary approval for the project to proceed. There are practical effects: the IAA process to

decision-making requires the time and resources of the Agency, the proponent, and other

implicated jurisdictions, such as provincial environmental authorities or First Nations, as well as

affected communities. The process may result in delay.

c.

Conclusion as to Pith and Substance of the IAA and Regulation

[591] While finding that challenged provisions of the Guidelines Order were validly enacted in

Oldman River, La Forest J described the impact assessment approach at 71:

Environmental impact assessment is, in its simplest form, a planning tool that is

now generally regarded as an integral component of sound decision-making. Its

fundamental purpose is summarized by R. Cotton and D. P. Emond in

Page: 167

"Environmental Impact Assessment", in J. Swaigen, ed., Environmental Rights in

Canada (1981), 245, at p. 247:

The basic concepts behind environmental assessment are simply

stated: (1) early identification and evaluation of all potential

environmental consequences of a proposed undertaking; (2) decision

making that both guarantees the adequacy of this process and reconciles,

to the greatest extent possible, the proponent's development desires with

environmental protection and preservation.

As a planning tool it has both an information-gathering and a decision-making

component which provide the decision maker with an objective basis for granting

or denying approval for a proposed development ….

[592] Both the IAA with its Regulation and the Guidelines Order at issue in Oldman River

involved a process for environmental assessment: use of a planning tool intended to be an integral

component of sound decision-making with respect to proposed activities and projects that may

have environmental effects. The IAA is different from the Guidelines Order in that it is project-

based and certain decisions pursuant to which projects are assessed are contained internally. The

Regulation identifies projects with potential environmental effects within the federal sphere that

are subject to a regulatory process triggered by s 7 and culminate in a decision as to whether an

assessment is necessary and if so, whether the project is authorized to proceed because certain

enumerated environmental effects are in the public interest. However, the IAA and Regulation

remain essentially a planning tool, effectuated by the Agency-led administrative infrastructure to

facilitate information-gathering, decision-making, and enforcement.

[593] In my view, the pith and substance of the IAA and Regulation is to establish a federal

environmental assessment regime that facilitates planning and information gathering with respect

to specific projects to inform decision-making, cooperatively with other jurisdictions, as to

whether the project should be authorized to proceed on the basis that identified adverse

environmental effects purported to be within federal jurisdiction are in the public interest.

2.

Classification

[594] In considering the constitutional validity of legislation relating to the environment, it is

necessary to look at the catalogue of powers assigned to Parliament and the provincial legislatures

to see if the exercise of authority in the impugned legislation falls within one or more of the powers

assigned to the government that enacted it: Oldman River at 65; Hydro-Quebec at para 112;

GGPPA SCC at para 533. As noted by La Forest J in Oldman River at 73, “[t]here is no

constitutional obstacle preventing Parliament from enacting legislation under several heads of

power at the same time” [emphasis added].

[595] Having identified the matter of the IAA and Regulation, I turn next to the interpretation of

the “classes of subjects” in the Constitution Act, 1867, to determine which ones, if any, will

Page: 168

accommodate the “matter” of the impugned legislation: Hogg at § 15.4. The question is whether

the subject matter of the challenged legislation genuinely falls within the head of constitutional

power relied upon to support its validity; where it does, the legislation will be upheld on the basis

that it is intra vires, and therefore valid: Pan-Canadian Securities Reference at para 86.

[596] Accepting that “environmental regulation” is too broad to be “the matter” of the IAA and

the Regulation, nor is it a single matter, nor is it a discrete head of power, legislative authority over

environmental regulation is distributed and parceled out between various federal and provincial

heads of power. As the Court in Oldman River stated at 67-68:

It must be noted that the exercise of legislative power, as it affects concerns relating

to the environment, must, as with other concerns, be linked to the appropriate head

of power, and since the nature of the various heads of power under the Constitution

Act, 1867 differ, the extent to which environmental concerns may be taken into

account in the exercise of a power may vary from one power to another. For

example, a somewhat different environmental role can be played by Parliament in

the exercise of its jurisdiction over fisheries than under its powers concerning

railways or navigation since the former involves the management of a resource, the

others, activities…

[597] Following the decision in Oldman River, author Steven Kennett suggested a distinction

between activities over which Parliament has “comprehensive” environmental jurisdiction (such

as interprovincial railways, the example used in Oldman River) and activities which, because they

merely touch on or have consequences for an area of federal competence, are subject only to

“restricted” or limited federal jurisdiction. Comprehensive jurisdiction would permit Parliament

to regulate all the environmental consequences of an activity, where the activity is referred to

directly or implicitly under a federal head of power. Limited federal jurisdiction would apply to

activities that are not directly referred to in a federal head of power but have consequences for an

area of federal competence; the extent of jurisdiction would be limited to “addressing these

consequences”.²²³Noting the distinct forms of federal authority over activities and the necessity

for a holistic approach to environmental assessment, the author makes the case “that federal-

provincial cooperation is required if [environmental assessment] is to achieve its full potential

when both levels of government have jurisdictional interests regarding an activity.”²²⁴

[598] Regardless of nomenclature, there is a distinction between environmental assessment of

activities that are explicitly or implicitly within federal heads of power, and environmental

assessment of activities that may have effects on or consequences for areas of federal competence.

A useful exercise for analyzing whether the IAA and Regulation regime genuinely operates within

federal jurisdiction is to distinguish between those activities or projects in the Regulation Project

223

See Steven A Kennett, “Federal Environmental Jurisdiction After Oldman” (1993) 38:1 McGill L J 180 at 186-

189.

224

Ibid at 203.

Page: 169

List that are indisputably tied, explicitly or implicitly, to a federal head of power, and those

activities or projects in the Project List that are prima facie tied to a provincial head of power but

may have effects within areas of federal jurisdiction, thus narrowing the focus of the inquiry.

a.

Matters in the IAA Regulation Project List prima facie Within

s 91 of the Constitution Act, 1867

[599] In Desgagnés Transport at para 39, the Supreme Court recognized that “classification may

sometimes be self-evident – and thus constitute a mere formality – once the law is properly

characterized”. Otherwise, classification “requires considering the scope of the relevant head of

power (see Reference re Securities Act at paras 65, 69; Reference re Assisted Human Reproduction

Act, per LeBel and Deschamps JJ., at para. 159; Ward v. Canada (Attorney General), 2002 SCC

17, [2002] 1 S.C.R. 569, at para. 29; Hogg, at pp. 15-6 and 15-7)”: Ibid.

[600] As touched on previously, many of the designated physical activities or projects on the

Project List in the Regulation Schedule involve subject matters whose classification within s 91 of

the Constitution Act, 1867 is self-evident and beyond dispute. These include:

 physical activities or projects located within a National Park, federal protected wildlife

area, bird sanctuary or protected marine area (ss 1-11);

 specified matters involving the military or defence (ss 12-17);

 uranium mines or mills (ss 20-23);

 nuclear facilities (ss 26-29) (though s 29 appears to be contentious);

 offshore oil or gas facilities (ss 34-36);

 new international electrical transmission lines or inter-provincial power lines designated

under the Canadian Energy Regulator Act (s 39);

 offshore oil and gas pipelines (s 40 - 41) (pipelines: depending on whether interprovincial);

 offshore wind power generating facilities (ss 44-45);

 aerodromes or runways (ss 46-47);

 international or interprovincial bridges or tunnels (ss 48-49);

 canals or causeways in navigable waters (ss 49-50); and

 marine terminals (ss 52-53).

b.

Matters in the IAA Regulation Project List prima facie Within

s 92 of the Constitution Act, 1867

[601] This Reference is about the remaining matters – designated physical activities or projects

on the Project List in the Regulation Schedule that prima facie fall within s 92(10) of the

Constitution Act, 1867 as being “Local Works and Undertakings” or 92A(1) of the Constitution

Act, 1867 as relating to “exploration, ... development, conservation, and management of non-

renewable natural resources ... in the province” or “development, conservation and management

of sites and facilities in the province for the generation and production of electrical energy”:

Page: 170

 mines and metal mills (ss 18-19, 24-25);

 oil, gas and other fossil fuel facilities (ss 30-33, 37-38);

 renewable energy (ss 42-43);

 new public highways that require 75 km or more of new right of way (s 51);

 railways and railway yards (ss 54-55);

 hazardous waste (ss 56-57); and

 water projects (ss 58-61).

Is it constitutionally permissible for the federal environmental assessment regime to regulate

environmental “effects”, said to be in federal jurisdiction, caused by such projects?

c.

Section 7 and the Regulation: Environmental Effects upon

Areas of Federal Jurisdiction

[602] Section 7 is the key to the operation of the IAA and Regulation. It uses language that,

literally interpreted, contemplates assessment of “designated projects” that may have

environmental effects causing changes to certain components of the environment said to be within

the legislative authority of Parliament. Section 7 incorporates by reference types of “designated

projects” in the Regulation Project List. And as noted, the effects listed in s 7 mirror the definition

of “effects within federal jurisdiction” at the centre of the decision made by the Minister and

Governor in Council in ss 60 and 62.

[603] In analysing s 7, it is helpful to recall that the “environment” is broadly defined as the

components of the Earth including “(a) land, water and air, all layers of the atmosphere; (b) all

organic and inorganic matter and living organisms; and (c) the interacting natural systems...”; and

“effects” defined as “changes to the environment or to health, social or economic conditions and

the positive and negative consequences of these changes”: s 2.

[604] Section 7 puts these concepts to work in this fashion: the proponent of a “designated

project” is prohibited from doing anything to carry out that project if it may cause “effects”,

including change to the “environment” in areas, variously described as in federal jurisdiction:

7(1) Subject to subsection (3), the proponent of a designated project must not do

any act or thing in connection with the carrying out of the designated project, in

whole or in part, if that act or thing may cause any of the following effects:

(a) a change to the following components of the environment that are within

the legislative authority of Parliament:

(i) fish and fish habitat, as defined in subsection 2(1) of the Fisheries Act,

(ii) aquatic species, as defined in subsection 2(1) of the Species at Risk Act,

Page: 171

(iii) migratory birds, as defined in subsection 2(1) of the Migratory Birds

Convention Act, 1994, and

(iv) any other component of the environment that is set out in Schedule 3;

(b) a change to the environment that would occur

(i) on federal lands,

(ii) in a province other than the one in which the act or thing is done, or

(iii) outside Canada;

(c) with respect to the Indigenous peoples of Canada, an impact – occurring

in Canada and resulting from any change to the environment – on

(i) physical and cultural heritage,

(ii) the current use of lands and resources for traditional purposes, or

(iii) any structure, site or thing that is of historical, archaeological,

paleontological or architectural significance;

(d) any change occurring in Canada to the health, social or economic conditions

of the Indigenous peoples of Canada; or

(e) any change to a health, social or economic matter within the legislative

authority of Parliament that is set out in Schedule 3.

(2) The Governor in Council may, by order, amend Schedule 3 to add or remove a

component of the environment or a health, social or economic matter.

[emphasis added]

[605] In my view, the language used in s 7 is jurisdiction-limiting. It clearly contemplates that

the prohibited effects are restricted to those falling within federal jurisdiction, particularly as the

effects listed in s 7 are self-defined as being “effects within federal jurisdiction”. It is true that

simply defining effects as being within federal jurisdiction does not make it so. However, as

catalogued below, I find that each of these s 7 effects fall within a head of federal power under s

91 of the Constitution Act, 1867. In other words, the IAA regime applies specifically to effects that

are changes to the environment within federal jurisdiction.

[606] This also holds true for the projects that are really at issue in this case – those located

entirely within a province, and prima facie falling within s 92 or 92A of the Constitution Act, 1867.

Those local or “intra-provincial” projects on the Project List are projects which are being assessed

Page: 172

for the purpose of determining whether the effects within federal jurisdiction (e.g., on fish and fish

habitat, aquatic species, migratory birds, etc.) caused by the project are in the public interest. An

excellent example is an in situ oil sands extraction facility, designated in the Regulation Schedule

under Oil, Gas and Other Fossil Fuels, at s 32:

The construction, operation, decommissioning and abandonment of a new in

situ oil sands extraction facility that has a bitumen production capacity of

2000 m³/day or more …

[607] The construction of in situ projects may cause effects that change “components of the

environment that are within the legislative authority of Parliament”, such as to fish and fish habitat,

aquatic species, and migratory birds. Various parties referred to a May 2019 “Discussion Paper on

the Proposed Project List” published by the Government of Canada. It says this of onshore oil and

gas:

Projects that process or consume large quantities of oil and gas have impacts in

areas of federal jurisdiction due to their greenhouse gas emissions. They may also

have adverse effects to fish and fish habitat and migratory birds through land

disturbance, air and water pollution and water usage, accidental spills, flaring, as

well as through the incidental activities that may be needed to transfer the oil and

gas products to or from the facility or to provide power for the facility.²²⁵

[608] The Discussion Paper goes on to note that certain project types, including certain in situ

projects, were “determined as having the greatest potential for adverse environmental effects in

areas of federal jurisdiction, primarily due to their potential for greenhouse gas emissions, as well

as, potential effects on fish and fish habitats”: ¹⁰

[609] Alberta’s evidence, as noted, includes the affidavit of Paul Tsounis, an employee with the

Alberta Department of Energy. At para 11 of his affidavit, Mr. Tsounis notes it is “estimated that

approximately 81% of Alberta's oil sands resource will be developed using in situ methods rather

than mining methods” [emphasis added], a figure said to derive from Natural Resources Canada

data attached as Exhibit “B”: Record at C4. That data provides that mining accounts for 47% of

current production and in situ 53%. However, in terms of future development based on oil

reserves, mining is projected to make up 19% and in situ production 81%: Ibid at C14-15. In other

words, while mining vs the in situ method is currently roughly equal, in situ is expected to overtake

mining substantially going forward. It is in this latter sense (i.e., future projection) that the 80%

figure is accurate.

[610] It is correct that s 7 of the IAA and the Regulation apply to effects of purely “intra-

provincial” projects that prima facie fall within ss 92(10) and 92A(1) of the Constitution Act, 1867,

225

Canada, Discussion Paper on the Proposed Project List: A Proposed Impact Assessment System (May 2019) at

10 (Record at A331 – A358) [Discussion Paper].

Page: 173

such as in situ oil sands extraction facilities. However, the federal assessment regime is intended,

designed, and operationally limited to apply only to the effects that are within federal jurisdiction.

[611] Moreover, s 7 cannot be read in isolation from the rest of the IAA. While s 7 itself speaks

of effects generally (which could include “positive” or “neutral” effects), it is clear the IAA is

ultimately concerned with adverse effects within federal jurisdiction: ss 60-64. As the long title of

the legislation itself notes, the IAA is designed to protect against “adverse environmental effects”.

The prohibitions in s 7 are broader, presumably for administrative purposes: Parliament seeks to

place a temporary hold on a project to determine their effects before they proceed, whereas a

prohibition limited to adverse effects could jeopardize that approach by allowing proponents to

claim that effects on federal jurisdiction are neutral and forge ahead, but at the end, they turn out

not to be so. However, these broad prohibitions are nevertheless in service of Parliament’s

narrower goal of determining whether certain adverse affects within federal jurisdiction are in the

public interest, which is why the screening decision by the Agency in s 16 of the IAA seeks to

eliminate from the assessment process designated projects not thought to have adverse effects

within federal jurisdiction.

[612] With this in mind, I turn now to the specific triggers in s 7 of the IAA and explain why, in

my view, each is within federal jurisdiction.

i.

Section 7(1)(a)(i) – change to fish and fish habitat, as

defined in s 2(1) of the Fisheries Act, within the legislative

authority of Parliament: the Fisheries Power under

s 91(12) of the Constitution Act, 1867

[613] Section 7(1)(a)(i) of the IAA prohibits a proponent from doing anything to carry out a

designated project that may cause a change to “fish and fish habitat”, defined in s 2(1) of the

Fisheries Act, RSC, 1985, c F-14, within the legislative authority of Parliament.

[614] Section 91(12) of the Constitution Act, 1867, provides that Parliament has exclusive

legislative authority over the “Sea Coast and Inland Fisheries”.

[615] As explained in Hogg, the power over fisheries under s 91(12) includes the authority to

“legislate for the preservation of fish”, for example, to regulate fishing operations by establishing

closed seasons, and to prohibit the use of destructive fishing methods, regardless of who owns the

fishing rights: Hogg at § 30:26 [emphasis added]. Parliament also has the power “to protect the

environment of fish”, for example, to ensure fish habitats are not polluted, though it is not a general

power to regulate water pollution: ibid [emphasis added].

[616] Legislation to protect fisheries by “preventing substances deleterious to fish [from]

entering into waters frequented by fish” is a proper concern of legislation under s 91(12):

Northwest Falling Contractors v The Queen, [1980] 2 SCR 292 at 301, 113 DLR (3d) 1 [Northwest

Falling Contractors cited to SCR]. The fisheries resource “includes the animals that inhabit the

Page: 174

seas. But it also embraces commercial and economic interests, aboriginal rights and interests, and

the public interest in sport and recreation”: Ward at para 41.

[617] It is true that s 91(12) does not afford Parliament jurisdiction over all aspects of fish. For

instance, Parliament has no ability to legislate in relation to the processing and marketing of fish:

Reference re Certain Sections of the Fisheries Act, 1914, [1930] AC 111 at 122 (PC). However,

the kinds of changes contemplated in s 7(1)(a)(i) are clearly directed to the preservation of fish

and the protection of fish habitat – matters which indisputably fall within s 91(12) – given that

they are restricted to changes caused by proponents of designated projects. The reach of the IAA

is obviously informed by the Regulation, and vice versa. Neither should be read in isolation.

[618] Nor do I read the IAA as even purporting to claim jurisdiction over all aspects of fish.

Rather, s 7(1)(a)(i) is limited to changes to fish and fish habitat “within the legislative authority of

Parliament”, a phrase confined to subsection (a) of s 7(1) rather than applying to the whole

catalogue of effects listed in s 7. This suggests Parliament understood that components of the

environment listed in s 7(1)(a) would not necessarily fall within federal jurisdiction in all aspects

and sought to limit its reach accordingly.

[619] Finally, I reject the contention that s 7(1)(a)(i) of the IAA is inconsistent with Fowler v The

Queen, [1980] 2 SCR 213 [Fowler]. In Fowler, the Supreme Court of Canada struck down s 33(3)

of the Fisheries Act, RSC 1970, c F-14 – which prohibited activities like logging which put “any

slash, stumps or other debris into any water frequented by fish” – because the provision made “no

attempt to link the proscribed conduct to actual or potential harm to fisheries”: 226 [emphasis

added]. Under the IAA, conversely, Parliament is clearly focused on activities thought to cause

harm (i.e., have an adverse effect) to fish and fish habitat. Section 7(1)(a)(i) is in service of

protecting against such harm, even if the harm is only potential and will not materialize in every

case. Moreover, because the public interest determination under ss 60 or 62 of effects listed in s

7(1)(a)(i) must be tied to actual adverse effects on fish and/or fish habitat, designated projects not

linked to the harm of fisheries will not ultimately be prohibited from proceeding under s 7.

[620] Accordingly, s 7(1)(a)(i) of the IAA is properly anchored in Parliament’s authority to

legislate for the protection of fish and regulation of their environment under s 91(12) of the

Constitution Act, 1867.

ii.

Section 7(1)(a)(ii) – change to aquatic species, as defined

in ss 2(1) of the Species at Risk Act, within the legislative

authority of Parliament: the Fisheries Power under

s 91(12) of the Constitution Act, 1867

[621] For similar reasons, I also agree with Canada’s contention that aquatic species fall under

Parliament’s constitutional authority over fish under s 91(12) of the Constitution Act, 1867.

Page: 175

[622] Subsection 2(1) of the Species at Risk Act, SC 2002, c 29, defines “aquatic species” as “a

wildlife species that is a fish, as defined in s 2 of the Fisheries Act, or a marine plant, as defined

in s 47 of that Act.” Section 47 of the Fisheries Act defines marine plants to include “all benthic

and detached algae, marine flowering plants, brown algae, red algae, green algae, and

phytoplankton.”

[623] In Northwest Falling Contractors, at 300, in discussing a protective provision in the same

version of the Fisheries Act considered in Fowler, Martland J wrote that shellfish, crustaceans and

marine animals, which are included in the definition of “fish” by s 2 of that Act, are all part of

the system which constitutes the fisheries resource; the power to control and regulate that resource

“must include the authority to protect all those creatures which form a part of that system”.

[624] Accordingly, s 7(1)(a)(ii) of the IAA is properly anchored in Parliament’s authority to

legislate for the protection of fish under s 91(12) of the Constitution Act, 1867.

iii.

Section 7(1)(a)(iii) – change to migratory birds, as

defined in ss 2(1) of the Migratory Birds Convention Act,

1994, within the legislative authority of Parliament:

Imperial Treaty Power under s 132 of the Constitution

Act, 1867

[625] Section 7(1)(a)(iii) of the IAA prohibits proponents from doing anything to carry out a

designated project if doing so may cause a change to migratory birds, as defined in ss 2(1) of the

Migratory Birds Convention Act, 1994, within the legislative authority of Parliament.

[626] Section 132 of the Constitution Act, 1867 provides:

The Parliament and Government of Canada shall have all powers necessary or

proper for performing the Obligations of Canada or of any Province thereof, as Part

of the British Empire, towards Foreign Countries, arising under Treaties between

the Empire and such Foreign Countries.

[627] As stated in Hogg at § 11.12: “the federal Parliament has the power to implement “Empire

treaties” under s. 132, but no power to implement Canadian treaties under s. 132”. Section 132

authorized the performance of treaty obligations which arose “under Treaties between the Empire

and ... Foreign Countries”, but not those which arose under treaties between Canada and foreign

countries.

[628] Canada submits that s 132 of the Constitution Act, 1867 authorizes legislation

implementing Imperial treaties and includes jurisdiction to enact legislation going beyond the

narrow terms of the treaty so long as it is ancillary to the treaty. One such treaty between the British

Empire and the United States that remains in force today is the 1916 Migratory Birds Convention:

Convention Between the United States and Great Britain for the Protection of Migratory Birds, 16

August 1916, 39 US Stat 1702, TIAS No 628 (entered into force 7 December 1916) [Convention]).

Page: 176

Canada implemented an amended Convention, the Convention for the Protection of Migratory

Birds in the United States and Canada, 14 December 1995, (entered into force 8 October 1999)

Can TS 1999 No 34 [Amended Convention], through the Migratory Birds Convention Act, 1994,

SC 1994, c 22 (MBCA).

[629] Subsection 2(1) of the MBCA defines a “migratory bird” as a bird referred to in the

Amended Convention as set out in the Schedule of the MBCA, and includes sperm, eggs, embryos,

tissue cultures, and parts of the bird. The MBCA was enacted to implement the Amended

Convention by protecting migratory birds and nests.

[630] Section 7(1)(a)(iii) of the IAA is properly anchored in Parliament’s authority to legislate

for the protection of migratory birds as ancillary to the implementation of an Imperial treaty under

s 132 of the Constitution Act, 1867.

iv.

Section 7(1)(a)(iv) – change to components of the

environment within the legislative authority of

Parliament: any other component of the environment set

out in Schedule 3

[631] Section 7(2) provides that the “Governor in Council may, by order, amend Schedule 3 or

add or remove a component of the environment or a health, social or economic matter”. Schedule

3 has not been amended, but in any event, s 7(1)(e) limits these components of the environment to

“any change to a health, social or economic matter within the legislative authority of Parliament

that is set out in Schedule 3” [emphasis added].

v.

Section 7(1)(b)(i) – change to the environment on federal

lands

[632] “[F]ederal lands” are defined in s 2 of the IAA. They include lands that belong to Canada,

and other identified lands and areas, as well as “reserves, surrendered lands and any other lands

that are set apart for the use and benefit of a band and that are subject to the Indian Act”, and all

waters on and airspace above those reserves or lands. Parliament’s jurisdiction to legislate with

respect to environmental effects or changes to the environment on federal lands does not appear to

be in dispute.

vi.

Section 7(1)(b)(ii) – change to the environment in another

province: POGG and s 91 of the Constitution Act, 1867

[633] Section 7(1)(b)(ii) prohibits proponents of designated projects from doing anything to carry

out those projects if doing so may cause changes to the environment in another province. This

provision regulates a project’s extra-provincial environmental effects, something Canada has been

assessing since CEAA, 1992: s 46(1). And again, while s 7 itself covers any change to the

environment, the IAA is ultimately concerned with adverse effects to the environment in another

province.

Page: 177

[634] These effects are the exclusive domain of Canada by virtue of the national concern doctrine

under the POGG power. The Supreme Court of Canada has already confirmed that the problem of

inter-provincial pollution is a matter of national concern for which Canada has jurisdiction to

legislate: Interprovincial Co-operatives Ltd et al v R, [1976] 1 SCR 477 [Interprovincial Co-

operatives]; R v Crown Zellerbach Canada Ltd, [1988] 1 SCR 401 at 445-446, per La Forest J (in

dissent but not on this point) [Crown Zellerbach]; GGPPA SCC at para 99. As a majority of the

Supreme Court recently noted in GGPPA SCC at para 195, “interprovincial pollution is

constitutionally different from local pollution and … may fall within federal jurisdiction on the

basis of the national concern doctrine”.

[635] That Canada must have jurisdiction to consider extra-provincial environmental effects is

confirmed by Interprovincial Co-operatives. In that case, the province of Manitoba brought an

action against two companies for damage caused in Manitoba from the release of mercury into

rivers in Ontario and Saskatchewan. At issue was whether Manitoba had the authority to pass a

statute creating liability for harm sustained from water pollution originating from other provinces,

even where the pollution was given regulatory approval by those other provinces.

[636] A majority of the Supreme Court held that Manitoba had no such authority, Pigeon J

concluding that “in respect of injury caused by acts performed outside its territory, I cannot accede

to the view that this can be treated as a matter within its legislative authority when those acts are

done in another province” (516). Rather, the pollution of interprovincial waters must fall within

federal jurisdiction (513-514) because the jurisdiction from which the interprovincial pollution

originated (in this case, Ontario, and Saskatchewan) likewise lacks the regulatory authority to

authorize such extra-provincial effects. As Pigeon J noted at 511, “it does not appear to me that a

province can validly license on its territory operations having an injurious effect outside its

borders”. It is this reality of provincial incapacity that explains the following remark by Laskin CJ

at 499 (in dissent but not on this point): “if any regulatory authority to have interprovincial effect

is to exist in respect of pollution of interprovincial waters it would have to be established under

federal legislation” [emphasis added].

[637] In short, jurisdiction to consider the extra-provincial environmental effects of a local

project must fall to Canada because the province in which the effects are created lacks the

jurisdiction to authorize them and the province in which the effects are felt lacks the jurisdiction

to protect against them. POGG is a residual power that can only be engaged where the matter does

not fall under any provincial head of power: GGPPA SCC at paras 89, 110, 141. That is certainly

the case with respect to the extra-provincial environmental effects of local projects, as no province

has the jurisdiction to consider them. This also explains why such effects are a matter of “national

concern” specifically. The doctrine relies to a considerable extent on the concept of “provincial

inability”, the idea that “federal jurisdiction should be found to exist only where the evidence

establishes provincial inability to deal with the matter”: GGPPA SCC at paras 152, 164. Here

provincial inability is patent and not reliant upon evidentiary considerations: provinces are simply

constitutionally incapable of acting on the problem. Nor does anything in the reformulation of

Page: 178

“national concern” in GGPPA SCC detract from the conclusion that inter-provincial pollution is a

matter of national concern.

[638] Moreover, the power to address inter-provincial pollution must include the ability for

Canada to limit and potentially prohibit the source of the pollution – even though that source is an

activity located within a province. This was specifically addressed in Crown Zellerbach at 445,

where La Forest J (in dissent but not on this point) said this about the POGG power:

In legislating under its general power for the control of pollution in areas of the

ocean falling outside provincial jurisdiction, the federal Parliament is not confined

to regulating activities taking place within those areas. It may take steps to prevent

activities in a province, such as dumping substances in provincial waters that

pollute or have the potential to pollute the sea outside the province. [Emphasis

added]

Accordingly, there is nothing inappropriate about the IAA seeking to prohibit, first temporarily and

potentially permanently, extra-provincial effects emanating from a designated activity located in

a particular province. Canada has the constitutional authority, if not the moral duty, to protect

provinces and their residents from extra-provincial environmental harm that the province itself is

constitutionally incapable of addressing. It should come as no surprise that Canada would seek to

do so by focusing on the source of that harm.

[639] Accordingly, s 7(1)(b)(ii) of the IAA is properly anchored in Parliament’s authority to

legislate for the “Peace, Order, and good Government of Canada” under s 91 of the Constitution

Act, 1867, inter-provincial harm to the environment being a matter of national concern.

vii.

Section 7(1)(b)(iii) – change to the environment outside

Canada: POGG and s 91 of the Constitution Act, 1867

[640] Parliament likewise has legislative authority over environmental effects that occur outside

Canada under s 7(1)(b)(iii) of the IAA. The reason is much the same as with extra-provincial

effects: authority must fall to Canada as a residual power under POGG because provinces have no

legislative jurisdiction beyond their own borders.

[641] This is evidenced in Reference re Newfoundland Continental Shelf, [1984] 1 SCR 86, 5

DLR (4th) 385 [Newfoundland Continental Shelf cited to SCR], where the Supreme Court of

Canada considered whether Canada or Newfoundland had legislative jurisdiction over natural

resources on the continental shelf offshore Newfoundland. The Court had little difficulty deciding

that legislative jurisdiction falls to Canada under the POGG power and that Newfoundland’s

legislative competence, like that of all the other provinces, is confined to legislation operating

within the provinces, a restriction found expressly in s 92(13) and s 92A(1) of the Constitution

Act, 1867 (127-128).

Page: 179

[642] The significance of Newfoundland Continental Shelf in terms of Canada’s jurisdiction

under POGG is not confined to the exploitation of natural resources offshore. La Forest J (in

dissent but not on this point) relied on the case when he said the following about the POGG power

in Crown Zellerbach at 445: “I have no doubt that [Canada] may also, as an aspect of its

international sovereignty, exercise legislative jurisdiction for the control of pollution beyond its

borders” [emphasis added].

viii. Section 7(1)(c)(i)-(iii) – change to the environment of

Indigenous Peoples, with impact on

a)

b)

physical and cultural heritage.

the current use of lands and resources for

traditional purposes.

c)

any structure, site or thing that is of historical,

archeological, paleontological, or architectural

significance.

and

Section 7(1)(d) – any change occurring in Canada to the

health, social or economic conditions of the Indigenous

peoples of Canada.

[643] Section 7(1)(c) prohibits proponents of designated projects from doing anything to carry

out the project that will cause a change to the environment of Indigenous peoples, where that

change will have an impact on physical and cultural heritage, use of lands and resources for

traditional purposes, or structures or sites of historical, archaeological, paleontological, or

architectural significance. Section 7(1)(d) prohibits activity that will cause a change in Canada to

the “health, social or economic conditions” of Indigenous peoples.

[644] Pursuant to s 91(24), Canada has exclusive authority to make laws in relation to “Indians,

and Lands reserved for the Indians”. Much has been written about the reason for reserving

legislation in relation to these subjects exclusively to the federal government. One explanation is

that it was considered that “Indians and their lands required the protection of a centralized authority

from the adverse interests of local settlers”.²²⁶The Supreme Court of Canada in Daniels v Canada

(Indian Affairs and Northern Development), 2016 SCC 12 at para 25, [2016] 1 SCR 99 described

the purpose of s 91(24) as supporting the expansionist goals of Confederation, including the

226

Kerry Wilkins, “Life Among the Ruins: Section 91(24) after Tsilhqot’in and Grassy Narrows” (2017) 55:1 Alta

L Rev 91 at 97; see also Hogg at § 28:1.

Page: 180

building of a national railway, which required a relationship between the federal government and

Aboriginal groups.

[645] Like other federal effects defined in the IAA, the provisions in ss 7(1)(c) and (d) are not

new additions to federal environmental legislation. They largely track the language of s 5(1)(c) of

CEAA, 2012.

[646] The validity of s 5(1)(c) of CEAA, 2012 was challenged in Taseko Mines Limited v Canada

(Environment), 2017 FC 1100 [Taseko Mines], where it was argued that the effect of the provision

was to render provincial approval of a project inoperative if there was an effect on Aboriginal

peoples. The Federal Court dismissed the judicial review application on other grounds and did not

find it necessary to address the constitutionality of the provision. However, in obiter, Phelan J

stated that he would have found it to be intra vires the federal government, noting that the purpose

clause of CEAA, 2012 speaks to the “promotion of communication and cooperation with

[A]boriginal people”, that the legislature recognized the environmental assessment process is

designed to satisfy the Crown’s duty to consult, and that the language of s 5(1)(c) is intended to

draw out the impacts to be considered: paras 150-151. He found that the pith and substance of the

provision comes within “Parliament’s power to legislate for ‘Indians, and Lands Reserved for the

Indians’ in s 91(24)”: para 152. These same considerations are true of the current ss 7(1)(c) and

(d) of the IAA.

[647] Relevant to the effects on Indigenous peoples described by ss 7(1)(c) and (d) is the Crown’s

duty to consult, an obligation imposed as part of the constitutional principle of the honour of the

Crown: Mikisew Cree First Nation v Canada (Governor General in Council), 2018 SCC 40 at

paras 24-27, [2018] 2 SCR 765 [Mikisew Cree]. The duty to consult arises where “the Crown

contemplates executive action that may adversely affect s 35 rights” and has also been applied in

the “context of statutory decision makers that ... act on behalf of the Crown”: Mikisew Cree at

para 25. The decision of whether to approve a project that has the potential to adversely affect

Aboriginal rights gives rise to a duty to consult: Taku River Tlingit First Nation v British Columbia

(Project Assessment Director), 2004 SCC 74 at paras 27-28, [2004] 3 SCR 550 [Taku River]. The

obligation is owed by both levels of government (Grassy Narrows First Nation v Ontario (Natural

Resources), 2014 SCC 48 at para 50, [2014] 2 SCR 447 [Grassy Narrows]) and, depending on the

circumstances, may be owed by both levels of government at once.

[648] The duty may be met where the affected Indigenous group participates in an environmental

assessment process related to the project, as was the case in Taku River. In that case, the relevant

assessment process, under British Columbia’s Environmental Assessment Act, included

participation by the affected Aboriginal groups, the provincial government, and the federal

government, and was adequate to satisfy the Crown’s duty to consult: paras 39-41. The role of

environmental assessment and regulatory processes in satisfying the Crown’s constitutional

obligations to Indigenous peoples was also discussed in Clyde River (Hamlet) v Petroleum Geo-

Services Inc, 2017 SCC 40 at paras 30-34, [2017] 1 SCR 1069, where the Supreme Court of Canada

Page: 181

found the procedures of the National Energy Board could be relied upon by the Crown “to

completely or partially fulfill its duty to consult”: para 34.

[649] Like environmental assessment generally, this is an area where cooperative federalism can

and should be encouraged. The purposes of the IAA include promoting communication and

cooperation with Indigenous peoples in the impact assessment process (s 6(1)(f)) and ensuring

respect for the s 35 rights of Indigenous peoples in the course of the assessment process (s 6(1)(g)).

The provisions of the IAA that contemplate involvement of Indigenous groups and facilitate

information gathering to identify effects on Indigenous peoples and their lands are in keeping with

the stated purposes of the legislation and facilitate the federal government’s duty to consult. In

Taseko Mines, the Federal Court was of the view that a purpose of s 5(1)(c) of CEAA, 2012 was to

garner information for the environmental assessment process, in furtherance of the Crown’s duty

to consult. I agree, and the same can be said of the equivalent provisions of the IAA.

[650] In addition, the consultation and cooperation provisions of the IAA can apply to ensure the

sharing of information among jurisdictions where a project is subject to both the federal regime

and another jurisdiction’s environmental assessment regime, and where constitutional obligations

are owed by both levels of government.

[651] The duty to consult aside, no one has offered a serious articulation as to why the interests

protected in ss 7(1)(c) and (d) of the IAA somehow fall outside the scope of “Indians, and Lands

reserved for the Indians”. It may be true that these interests fall outside the “core” of s 91(24) such

that interjurisdictional immunity does not prevent provincial legislation of general application

from authorizing projects which impact upon them and ultimately infringe Aboriginal and treaty

rights under s 35 of the Constitution Act, 1982: see Grassy Narrows; Tsilhqot’in Nation v British

Columbia, 2014 SCC 44, [2014] 2 SCR 256. However, the applicability of provincial legislation

to Indigenous peoples says nothing about the validity of federal legislation like the IAA. A local

project authorized by a provincial legislative regime can nonetheless have adverse effects on

Indigenous interests, where those effects are understood as effects within federal jurisdiction.

[652] A case in point is the circumstances in Oldman River, which Hogg describes this way: “The

dam on the Oldman River had an effect on navigable waters, fisheries and lands reserved for the

Indians (there was an Indian reserve downstream from the dam site). These effects justified a wide-

ranging environmental assessment encompassing the impact of the dam on those three subject

matters as well as any other federal matters that turned out to be implicated” (§30:32). It was in

this context that Hogg ultimately characterized the decision in these terms: “The effect of the

Oldman River decision is to confer on the federal Parliament the power to provide for

environmental impact assessment of any project that has any effect on any matter within federal

jurisdiction” (ibid). In other words, adverse effects on Indigenous peoples from a local project are

said to constitute effects within federal jurisdiction.

[653] A particularly compelling image is painted in an Alberta case, Fort McKay First Nation v

Prosper Petroleum Ltd, 2020 ABCA 163, of what may be at stake for First Nations peoples when

Page: 182

resource development encroaches on their traditional lands. In 2013, Prosper Petroleum sought

authorization from the Alberta Energy Regulator to construct a bitumen recovery project that

would produce 10,000 barrels a day. This oil extraction plant would be 5 kilometers from the First

Nations border, adjacent to an area used as traditional fishing and hunting lands. In the land use

planning process under municipal authority, in 2003 Alberta had promised to preserve a buffer

zone to protect these traditional lands. Nonetheless, under the predecessor to the current EPEA,

the Alberta Energy Regulator granted approval to Prosper Petroleum to build its oil extraction

facility next to the traditional lands. Due to the extensive industrial and resource development

surrounding Fort McKay First Nation, the Nation was concerned about the ability of its members

to pursue their traditional way of life in their community which had been “the most severely

affected of all First Nations by oil sands development in the region”: para 6.

[654] This is the kind of situation where ss 7(1)(c) and (d) might apply: the “designated project…

may cause effects…with respect to Indigenous peoples” … “resulting from any change to the

environment” on “cultural heritage” … “use of lands and resources for traditional purposes” …or

“any change … to the health, social or economic conditions of the Indigenous peoples of Canada”.

[655] For such circumstances, the IAA contemplates a multilateral process that would involve the

Agency, Indigenous groups, provincial, and even regional jurisdictions, in a process to determine

what is in the public interest. There can be little doubt that environmental effects from such a

project – and there are environmental effects from bitumen recovery projects – would impact the

neighbouring First Nation’s environment, broadly construed, and that these effects are directly

linked to a matter within federal jurisdiction: “Indians, and Land reserved for the Indians” under s

91(24) of the Constitution Act, 1867. Paragraphs 7(1)(c) and (d) provide Indigenous peoples with

a way to assert their constitutional and other rights and interests, whether to protect traditional

homelands for pursuit of cultural interests or for advancement of economic interests.

ix.

Section 7(4) – the proponent may cause a change referred

to in s 7(1)(d) in relation to Indigenous peoples that hold

rights affirmed by s 35 of the Constitution Act, 1982 if the

change is not adverse and the Indigenous peoples and

proponent agree the act or thing may be done.

[656] Section 7(4) allows for a proponent of a designated project to carry out an activity that may

cause a change in relation to an Indigenous group that holds rights affirmed by s 35 of the

Constitution Act, 1982 “if the change is not adverse and the council … authorized to act on behalf

of the Indigenous group, community or people and the proponent have agreed that the act or thing

may be done”. Canada cites s 7(4) as an example of cooperation and consultation with Indigenous

peoples.

[657] Where this provision is engaged, a question may arise as to whether an anticipated change

is “adverse”, and whether Indigenous groups have the autonomy to consent to “effects” that are

“adverse”. Decisions made under the IAA environmental assessment regime ultimately balance

Page: 183

positive and negative effects to determine whether a project is in the public interest. The same

approach might apply to a decision on a project where s 7(4) is engaged; an agreement by an

Indigenous group to develop resources might weigh in the balance whether the effects are adverse.

But when and whether a project that engages s 7(4) will be approved cannot be decided in the

abstract; and in any event, the s 7(4) language reflects a federal policy choice rather than a

constitutional conundrum.

d.

Section 8: Federal Decisions

[658] Section 8 of the IAA prohibits a federal authority from exercising any power or performing

any duty or function that permits a designated project to be carried out, and from providing

financial assistance, unless the Agency decides that no impact assessment is necessary, or the

project is approved following an impact assessment. This provision applies to federal decisions

external to the operation of the IAA, as the Court found to be within the constitutional power of

the federal authority in Oldman River.

e.

Sections 81-83: Federal Projects on Federal Lands and Projects

Outside Canada

[659] Similarly, federal projects carried out on federal lands and outside Canada (IAA, ss 81-83)

are indisputably within federal constitutional authority. These provisions mirror s 6 of Guidelines

Order, found to be within federal constitutional authority in Oldman River.

f.

Sections 32-33 of the Regulation Schedule: GHG Emissions may

be “Effects” in Federal Jurisdiction; and Identify Threshold

Levels for Project Inclusion on the Project List

[660] Alberta suggests that if “the production of GHG emissions or the potential for accidental

spills are sufficient from a constitutional perspective to support impact assessment … then the

potential application of the IAA becomes virtually limitless” (Alberta’s Factum at para 81). This is

the extent to which Alberta challenges the reference to GHG emissions in ss 32-33 of the

Regulation Schedule.

[661] GHG emissions is not itself a federal trigger under s 7 of the IAA (or anywhere else).

Indeed, Canada explicitly declined to adopt a proposal from certain Indigenous groups

which “[r]ecommended a greenhouse gas emissions trigger that designates a project where project-

related GHG emissions may affect Canada’s ability to meet its international commitments to

reduce GHG emissions”: RIAS at 5671. Accordingly, neither the IAA nor the Regulation assert

GHG emissions are a matter of federal jurisdiction in the way that effects on fish or Indigenous

peoples are said to be matters of federal jurisdiction. There is no language in the IAA claiming

federal jurisdiction to assess a “provincial” project anytime that project emits GHGs. If that were

true, essentially every project would be subjected to a federal assessment (which is not the case)

and there would be no need for a “screening” decision in s 16 of the IAA.

Page: 184

[662] Section 32 of the Regulation Schedule applies to the:

construction, operation, decommissioning and abandonment of a new in situ

oilsands extraction facility that has a bitumen production capacity of 2 000 m³/day

or more and that is

(a) not within a province in which provincial legislation is in force to limit the

amount of greenhouse gas emissions produced by oil sands sites in the province; or

(b) within a province in which provincial legislation is in force to limit the amount

of greenhouse gas emissions produced by oil sands sites in the province and that

limit has been reached.

Section 33 of the Regulation Schedule says the same with respect to the “expansion of an existing

in situ oil sands extraction facility, if the expansion would result in an increase in bitumen

production capacity of 50% or more and a total bitumen production capacity of 2 000 m3/day or

more”.

[663] Section 7(1)(b) of the IAA operates in conjunction with ss 32 and 33 of the Regulation

Schedule and the screening decision in s 16 of the IAA to trigger a federal assessment of certain in

situ oil sands extraction facility projects if carrying out such a project may cause adverse effects

to the environment on, for example, federal or First Nations lands, in another province, or outside

of Canada. In my view, the reference to GHG emissions in these sections demarcates a threshold

for particular in situ projects to be placed on the Project List to trigger s 7 of the IAA, just as certain

capacity thresholds identify other projects in the Project List; and just as certain thresholds of

activity identified projects for the Project List under CEAA, 2012, as discussed in Part II above.

[664] It was important in GGPPA SCC that the matter of GHG emissions generally was not a

“matter of national concern” because of the mechanics of the POGG power: once something is a

matter of national concern, the provinces are precluded from legislating on that matter. Clearly,

provinces have the jurisdiction to legislate on GHG emissions. Indeed, something can only be a

matter of national concern if provinces lack the jurisdiction to deal with it. Accordingly, a narrow

aspect of GHG emissions was carved out for purposes of POGG, namely “establishing minimum

national standards of GHG price stringency to reduce GHG emissions”: GGPPA SCC at para 207.

[665] First, the emission of GHGs from certain very large projects could in principle have

adverse effects outside Canada or outside the province in question, thus triggering a federal

assessment under s 7(1)(b)(ii)-(iii). However, if that were the case (a question of fact and evidence

beyond the scope of this Reference), the jurisdiction would not be based on GHGs generally – it

would be based on whatever the extra-provincial effects happened to be, something that Canada

must have jurisdiction over under POGG because, as noted, individual provinces lack the

jurisdiction to regulate them. The nature of the substance causing the extra-provincial effect

is irrelevant. Moreover, the extra-provincial effect triggers are longstanding and are best illustrated

by concern not with GHGs or climate change but with rivers running between provinces or

Page: 185

between Canada and the United States. Indeed, federal assessments over inter-provincial rivers

date back to EARPGO: see for example Can. Wildlife Fed. Inc. v Can. (Min. of the Environment),

[1989] 4 WWR 526 (FC) at 540, [1989] 3 FC 309:

I agree that unwarranted duplication should be avoided but it seems to me that a

number of federal concerns were not dealt with by the provincial environment

impact statement, including a review of the impact of the project in North Dakota

and Manitoba. As such, I do not think that applying the EARP Guidelines Order

would result in unwarranted duplication but would fill in necessary information

gaps.

[666] Second, GHG emissions and climate change are constitutionally permissible factors in

decision-making to the extent they are relevant or rationally connected to valid federal triggers. As

noted by author Martin Z Olszynski, “[s]o long as the “pith and substance” of the legislation falls

within the scope of a federal head of power, and the factors considered by the decision-maker are

relevant, or rationally connected, to his or her decision, then decision-making pursuant to that

legislation will be constitutional”.²²⁷This raises the distinction between legislating on a matter and

making decisions under that legislation, discussed in more detail under heading V.B.2.i.i. herein.

Clearly, the factors that a decision-maker can take into account are broader than the subject matter

which triggered the jurisdiction to make the decision. A federal Minister who has jurisdiction to

consider whether a project’s harm to fish is in the public interest is not limited to “fish-related”

considerations, otherwise approvals would rarely, if ever, be granted because adverse effects will

rarely, if ever, be beneficial to fisheries. The decision-maker must be able to consider outside

benefits to counterbalance the harm, including, for example, economic benefits in the form of jobs

and revenue to the local economy. However, once this is accepted, the question becomes how far

a decision-maker can go to develop a complete economic picture.

[667] Take “sustainability”, for example, a factor in s 63 of the IAA to be considered when

determining whether “adverse federal effects” are in the “public interest” under s 60. Sustainability

is defined in the IAA as “the ability to protect the environment, contribute to the social and

economic well-being of the people of Canada and preserve their health in a manner that benefits

present and future generations”: s 2. Carbon pollution is relevant to sustainability for all sorts of

reasons, including economic reasons. For example, it has recently been suggested that federal

assessments under the IAA consider the “social cost of carbon”, the “dollar figure representing the

estimated cost of damages that result from an additional ton of carbon dioxide (CO2) emitted into

the atmosphere”.²²⁸The idea is that carbon pollution is not only an obstacle to our continued

227

Martin Z Olszynski, “Reconsidering Red Chris: Federal Environmental Decision-Making after Miningwatch

Canada v Canada (Fisheries and Oceans)” in The Honourable Mr. Justice William A Tilleman and Alastair R Lucas,

Q.C., eds, Litigating Canada’s Environment: Leading Canadian Environmental Cases By the Lawyers Involved

(Toronto: Thomson Reuters, 2017) 267 [Reconsidering Red Chris] at 271.

228

David V Wright & Meinhard Doelle, “Social Cost of Carbon in Environmental Impact Assessment” (2019) 52:3

UBC L Rev 1007 at 1020.

Page: 186

survival as a species (no small matter) – it is also really expensive. It creates financial costs that

ultimately must be borne by all of us, regardless of where the emissions originate.

[668] Accordingly, when one is determining the economic benefit of a project, some

consideration of GHG emissions as part of the metric creates a richer picture by internalizing what

would otherwise be an economic externality. As noted by authors Martin Z Olszynski & Marie-

Ann Bowden:

[T]here seems to be little room for doubt that the federal government weighs what

can be considered conventional economic benefits of resource projects in its

decision-making – even seemingly local ones. If this is the case, the only change

brought about by the CEAA is to broaden the federal government’s previously

narrow metric for measuring benefits – by reference to jobs and revenue, for

example – with the concept of sustainable development, which necessitates the

incorporation of environmental costs and benefits into the equation.²²⁹[emphasis

added]

[669] Indeed, it would be ironic if a federal decision-maker were allowed to consider a primarily

local concern like “jobs created” as part of the “public interest” determination but not economic

considerations like the cost of carbon which transcend local concerns into the realm of the national.

[670] In summary, if a designated project, even in the natural resources sector, may produce

GHGs with effects in federal jurisdiction, then it is properly subject to the IAA just as is any other

designated project on the Project List that may have effects extra-provincially or beyond the

borders of Canada. However, there is no evidence in this Reference to consider to what extent an

in situ oil sands extraction facility produces GHGs, and whether GHGs emitted from any particular

in situ project may cause effects that change the environment on federal lands, in another province,

or outside Canada. This issue remains for another day. In any event, ss 32-33 of the Regulation

Schedule simply identify a threshold required to put particular in situ projects on the Project List

so as to trigger s 7 of the IAA. The references to GHG emissions on the Project List would seem

to be a red herring or irrelevant to whether federal regulation of such designated projects’ effects

on areas of federal jurisdiction is constitutional.

g.

Project-Based Assessment: An External Legislative Trigger

(Affirmative Regulatory Duty) tied to a Specific Head of Power

is not a Constitutional Prerequisite

[671] Alberta argues that EARPGO and CEAA, 1992 expressly relied on a federal ground of

jurisdiction with an “affirmative regulatory duty” to trigger the federal regime, as in Oldman River,

for example, the need for an authorization under the Navigable Waters Protection Act for a project

that was otherwise regulated entirely by a province. The federal assessment power was tethered to

229

Marie-Ann Bowden & Martin Z P Olszynski, “Old Puzzle, New Pieces: Red Chris and Vanadium and the Future

of Federal Environmental Assessment” (2011) 89 Can Bar Rev 445 [Bowden & Olszynski] at 484.

Page: 187

an affirmative regulatory duty under a federal head of power. On the other hand, goes the

argument, the IAA does not contain a federal trigger and instead relies on a list of designated

projects in the Project List that become prima facie subject to federal assessment, such as the

potential for accidental oil spills, so that the reach of the IAA “becomes virtually limitless”:

Alberta’s Factum at para 81. The majority agrees.

[672] However, the federal government is not confined in its approach to environmental

assessment, so long as it stays within its constitutional lane. The project-based approach in the IAA

(and which likewise existed in CEAA, 2012) contains multiple safeguards to ensure that federal

assessments remain focused on effects within federal jurisdiction. First, the trigger in s 7 limits its

application to effects within federal jurisdiction, as previously outlined. Second, designated

projects on the Project List are chosen based on their likelihood of causing effects within federal

jurisdiction. And third, that a project is on the Project List does not necessarily mean an assessment

will even occur. The screening decision in s 16 is designed to weed out individual designated

projects not thought to have effects on federal jurisdiction, thereby addressing the concern that if

triggers are not tied to an independent federal permit or authorization, then projects may be

subjected to a federal assessment even if they do not ultimately have any adverse effects on federal

jurisdiction.

[673] In addition, while s 7 has the effect of tying up projects before a screening decision is made,

the focus is still that of determining whether a project has federal effects. The benefit of this kind

of “anticipatory” approach is that it clarifies early in the life of a project whether a federal

authorization is required or not. Under the prior “decision-based” framework, a proponent might

get years into a project before realizing that it required a federal license or permit. Often it is not

known in advance whether a project will have adverse federal effects or the magnitude of those

effects – indeed, the fact of imperfect knowledge is the whole reason why assessment regimes

exist in the first place. Given the centrality of the “precautionary principle” in modern

environmental law, it is understandable that Parliament would want to focus on potential harm in

areas of federal jurisdiction. Certain groups may not like this approach as a matter of policy, but

that does not mean it is a problem constitutionally. Parliament is under no obligation to structure

its environmental laws in ways that developers find optimal. Intervenors siding with Alberta

expressed concerns and highlighted aspects of the law they found problematic. However, the

efficacy of a law is not the concern of the courts in a division of powers analysis: Reference re

Firearms Act (Can), 2000 SCC 31 at para 18, [2000] 1 SCR 783 [Firearms Reference].

[674] Moreover, and in any event, jurisprudence subsequent to Oldman River “has confirmed

that the ‘affirmative regulatory duty’ concept applied only to the EARPGO and did not establish

Page: 188

any kind of constitutional limit on the triggering of federal environmental assessment”.²³⁰Cited

for this proposition is Moses (sometimes called Vanadium).²³¹

[675] In Moses, as previously discussed, a proponent wanted to develop a mine in Quebec. One

of the issues was the applicability of CEAA, 1992. Canada’s position was that a federal assessment

was required because the mine would impact fish, requiring an authorization from the Minister of

Fisheries under s 35(2) of the Fisheries Act. Quebec’s position was that no federal assessment was

required because there was not a valid trigger – notwithstanding that s 35(2) was clearly one of the

triggers listed in the Law List Regulations pursuant to s 59(f) of CEAA, 1992. Quebec argued that

the “affirmative regulatory duty” described in Oldman River was a constitutional imperative and

was lacking here. (In Oldman River at 49, only the decision of the Minister of Transport under the

Navigable Waters Protection Act was said to constitute an “affirmative regulatory duty” – the

decision of the Minister under the Fisheries Act was merely an “ad hoc legislative power”).

[676] Canada argued that CEAA, 1992 had overtaken Oldman River on this point, such that

authorization under the Fisheries Act was now a valid trigger, a position Quebec said “ignores the

sharing of powers under the Constitution Act, 1867 and enables federal environmental legislation

to be used as a Trojan horse to invade provincial jurisdiction”: 2008 QCCA 741 at para 68

[emphasis added]. The Quebec Court of Appeal rejected Quebec's argument, finding that CEAA,

1992 applied. The majority of the Supreme Court of Canada agreed, rejecting Quebec’s argument

that it would be unconstitutional for the federal Fisheries Minister to refuse to grant the necessary

permits under s 35(2) of the Fisheries Act without first complying with CEAA, 1992: 2010 SCC

17 at para 13. The Court went on to state that both federal and provincial assessment laws “should

be allowed to operate within its assigned field of jurisdiction”: Ibid. This was so notwithstanding

Quebec's claim that the mine should be regulated only provincially because it falls under s 92A

(para 36):

There is no doubt that a vanadium mining project, considered in isolation, falls

within provincial jurisdiction under s. 92A of the Constitution Act, 1867 over

natural resources. There is also no doubt that ordinarily a mining project anywhere

in Canada that puts at risk fish habitat could not proceed without a permit from the

federal Fisheries Minister, which he or she could not issue except after compliance

with the CEAA. The mining of non-renewable mineral resources aspect falls within

provincial jurisdiction, but the fisheries aspect is federal" [emphasis added].

[677] It is true that the triggering mechanism in CEAA, 1992 is still much closer to EARPGO

than the trigger in CEAA, 2012 and the IAA. In CEAA, 1992, a federal assessment of a project

(or an aspect thereof) was triggered by that project needing some sort of permit or the federal

230

Martin Z Olszynski, “Impact Assessment” in William A Tilleman et al, eds, Environmental Law and Policy, 4th

ed (Toronto: Emond Montgomery Publications, 2020) 453 [Olszynski] at 462-463; see also Bowden & Olszynski at

472-474.

231

The decision is described in Bowden & Olszynski at 445-446, 460-462, 465-466.

Page: 189

government making some sort of decision (though federal assessments were permitted in other

cases, including with respect to projects having extra-provincial effects). In CEAA, 2012 and the

IAA, the potential for an assessment is triggered (subject to being screened out) if the project is

on the Project List. But while all of this may be true, it is not clear why it is important – at least

from a constitutional perspective. If Canada indeed has the authority to assess “any project that

has any effect on any matter within federal jurisdiction”, as Hogg states (§ 30:32), then the focus

on a Project List of “major projects” in CEAA, 2012 and in the IAA appears to be essentially a

policy choice designed to put different limits on how Canada will exercise that authority.

[678] Choices must be made (and accordingly limits put in place) in terms of which projects may

(potentially) be assessed. In EARPGO and CEAA, 1992, the limit generally (but not exclusively)

came in the form of projects requiring a separate authorization. At first blush, the move to a

major Project List may be seen as expanding the number of projects over which Canada has some

sort of involvement. However, the move to such a list under CEAA, 2012 coincided with

Parliament having “drastically reduced the scope of Canada's Fisheries Act, and the protections

for fish habitat in particular” as well as amending the Navigable Waters Protection Act to apply

“to only a fraction of the water bodies that were subject to the pre-2012 regime”: Olszynski at 467.

Accordingly, had the pre-2012 trigger remained the same, there would have been fewer federal

assessments since there were fewer projects requiring federal decisions. Moreover, since the

trigger post-2012 is limited to a handful of matters (e.g., fish, migratory birds, but excluding pre-

2012 matters like navigable waters), the number of projects undergoing federal assessment has

been reduced from around 3000 per year to around 70 per year: ibid.

[679] The reason Parliament might have moved away from the “decision-based” triggers in s 5

of CEAA, 1992 (at least in part) is explained by authors Meinhard Doelle & Chris Tollefson in

Environmental Law: Cases and Materials, 3rd ed (Toronto: Thomson Reuters, 2019) [Doelle &

Tollefson] at 599:

The requirements of section 5 created practical difficulties in cases where it was

unclear for one reason or another whether a section 5 decision would be required.

For example, section 35 of the Fisheries Act, R.S.C. 1985, c. F-14, required an

approval in cases of harmful alteration of fish habitat. Whether a project would

cause a sufficient alteration of fish habitat may not be known for certain until the

late design stages of the project, much later than an EA process should ideally be

initiated.

[680] The majority suggests Canada only has the constitutional jurisdiction to assess a local

project – even where that project is not disputed to have effects on areas of federal jurisdiction –

if federal legislative decision-making authority exists independent of the assessment process. I

disagree. In my view, this confuses the jurisdiction Parliament has been granted under the

Constitution Act, 1867 with how it chooses to exercise that jurisdiction. That Parliament has not

chosen to exercise its full legislative power over fisheries in external legislation under the Fisheries

Page: 190

Act does not mean it is precluded from doing so now in the IAA.²³²Indeed, La Forest J was clear

in Oldman River at 47 when discussing the application of EARPGO that federal decision-making

responsibility in an external statute is by no means co-extensive with matters falling within federal

jurisdiction.

[681] Nor is such legislative decision-making authority (whether as an “affirmative regulatory

duty” or otherwise) needed to ascertain whether a local project will have effects within federal

jurisdiction. Again, a case in point is Oldman River itself. While a federal decision under the

Navigable Waters Protection Act was found to have triggered the federal assessment given how

EARPGO was structured, the Court had no trouble concluding that the assessment should include

effects on federal matters for which Canada had no independent legislative decision-making

authority. Noting that “the scope of assessment is not confined to the particular head of power

under which the Government of Canada has a decision-making responsibility” (73), La Forest J

directed a consideration of “the environmental implications on all areas of federal jurisdiction

potentially affected” (ibid), including the environmental impact of the dam on “Indians and Indian

lands” – notwithstanding that the project did not require that Canada make any decision external

to EARPGO in relation to “Indians and Indian lands”.

[682] I do not dispute that a federal assessment must be tied to a federal decision. Assessments

are not done in the abstract or for no reason; they are done for the purpose of providing a decision-

maker with the information needed to make an informed decision. However, Parliament can,

within its constitutional limits, structure federal decision-making as it sees fit. That includes by

protecting against adverse effects in federal jurisdiction through decisions in the assessment

process itself rather than in external legislation, and by making decisions with respect to certain

kinds of projects and not others. In the case of the IAA, that involves the “public interest” decision

in ss 60 and 62 authorizing or not authorizing a proponent to proceed with a designated project

found to have adverse effects in one or more areas of federal jurisdiction.

[683] Were it otherwise and the majority correct, Canada would never have jurisdiction to, for

example, assess a local project on the basis of its adverse environmental effects in another province

– effects not contemplated in external legislation but which have been included in federal

assessment legislation since CEAA, 1992. Canadians might be surprised to learn that no level of

government in this country has jurisdiction to address the environment effects in their province

from mercury dumped in a river by a project located in another province.

232

As noted in Anna Johnston, “Federal Jurisdiction and the Impact Assessment Act: Trojan Horse or Rational

Ecological Accounting?” in The Next Generation of Impact Assessment, Meinhard Doelle & A John Sinclair, eds

(Toronto: Irwin Law, 2021) 97 [Johnston] at 111, “[f]ailure to have enacted the Fisheries Act would not have nullified

the federal fisheries power, and Parliament would still have authority to assess projects based on potential impacts on

fish”.

Page: 191

h.

Review of all Aspects of a Project is Permitted

[684] Nor is it constitutionally impermissible for the IAA to allow the Agency or a review panel

to assess all the effects of a designated project, both positive and negative, and regardless of

whether those effects fall within federal jurisdiction. Assessing the whole of a project is simply a

means of obtaining as much information about the project as possible. This in turn allows for a

more fulsome analysis of the factors used to determine whether adverse effects within federal

jurisdiction are in the public interest. As elaborated upon below, the public interest determination

requires a consideration of costs and benefits which themselves transcend purely “federal” matters,

best achieved by an assessment process that does not attempt to limit its scope at an early stage.

[685] The approach is also not new. It was considered and sanctioned by the Supreme Court of

Canada under CEAA, 1992 in MiningWatch (sometimes called Red Chris). In that case, Red Chris

Development Company sought to develop a copper and gold open pit mine and milling operation.

Red Chris proceeded through the provincial environmental regulation process. The British

Columbia Environmental Assessment Office released a positive environmental assessment

certifying that the project was not likely to cause adverse environmental, heritage, social,

economic, or health effects. Red Chris applied to the federal Department of Fisheries and Oceans

as the dam required a tailings pond to store the mine’s effluent. Fisheries concluded that an

environmental assessment was required and would be conducted by it on the basis that the project

fell within the Comprehensive Study List Regulations, SOR/94-638 under CEAA, 1992. Fisheries

decided to conduct a screening with narrow scope including the tailings pond rather than a

comprehensive study, relying on steps completed by the provincial process, including public

consultations. The Screening Report was issued to that effect and the project allowed to proceed.

[686] MiningWatch, a public interest group, filed for judicial review based on a breach of the

duty under CEAA, 1992 to conduct a comprehensive study and to consult the public. Rothstein J,

writing for the Court, characterized CEAA, 1992 this way, at paras 1-2:

The Canadian Environmental Assessment Act, S.C. 1992, c. 37 (“CEAA” or

“Act”), is a detailed set of procedures that federal authorities must follow before

projects that may adversely affect the environment are permitted to proceed. The

Act and its regulations provide for different levels of intensity with which

environmental assessments are to be performed depending upon the nature of the

project under scrutiny. In practice, the intensity with which an environmental

assessment should be conducted determines the “track” on which the assessment

proceeds, whether by screening, comprehensive study, mediation or review panel.

The issue in this appeal is whether the environmental assessment track is

determined by the project as proposed by a proponent or by the discretionary

scoping decision of the federal authority. In my opinion, the Act and regulations

require that the environmental assessment track be determined according to the

project as proposed; it is generally not open to a federal authority to change that

level [emphasis added].

Page: 192

[687] The Court rejected the idea that CEAA, 1992 allowed “scoping to trigger”, the practice of

a federal Minister or “responsible authority” limiting the scope of a federal assessment to a

narrow component of a proposed project thought to fall within federal jurisdiction rather than the

scope of the project as proposed by the proponent. The idea of “scoping to trigger” originated in

case law from the Federal Court of Appeal that was premised on constitutional concerns over the

jurisdiction of federal assessments²³³, however the Supreme Court opted not to follow that law in

interpreting the legislation: para 26.

[688] The Court observed that responsible departmental authorities can and should minimize

duplication by using the coordination mechanisms, encouraging federal and provincial

governments to adopt mutually agreeable terms for coordinating environmental assessments, to

reduce unnecessary, costly, and inefficient duplication. Cooperation and coordination were

expressly recognized in CEAA, 1992: para 41. MiningWatch obtained a declaration as to the

federal government’s obligation to conduct a full assessment under CEAA, 1992.

[689] While MiningWatch was not a constitutional case, nonetheless the Supreme Court would

have been alive to the constitutional issues when it concluded that for federal environmental

assessment purposes under CEAA, 1992, a “project” will include the entire project as proposed.

i.

A Project in the Public Interest vs all Aspects of a Project in the

Public Interest

[690] While environmental assessment of the whole project may be within federal constitutional

authority under the IAA and Regulation, the next inquiry concerns whether the IAA provisions for

decision-making based on that assessment are within federal constitutional authority. Does the IAA

purport to confer power on the Minister and Governor in Council to use the federal impact

assessment regime to authorize or not authorize a project by determining whether the project as a

whole is in the public interest without qualification (not solely by reference to its effects in federal

jurisdiction), in a fashion that exceeds its constitutional authority?

[691] The provision relevant to this question, s 60(1), is set out at para 509 above. In brief, after

considering an impact assessment report for a designated project, the Minister or the Governor in

Council must determine whether the adverse effects within federal jurisdiction and the direct or

incidental effects detailed by the report are in the public interest: ss 60, 62.

[692] Both the Minister and Governor in Council must base their decisions on the impact

assessment report, the factors set out in s 63, and the extent to which they are in the public interest:

see para 512 above. In brief, they include (a) the project’s contribution to sustainability, (b) the

significance of the projects adverse effects within federal jurisdiction and its adverse direct or

incidental effects, (c) appropriate mitigation measures, (d) the impact the designated project may

have on any Indigenous group and their s 35 rights, and (e) the extent to which the designated

233

Bowden & Olszynski at 452-455.

Page: 193

project will help or hinder the federal government’s ability to meet its environmental obligations

and climate change commitments.

[693] If either decision-maker determines that the relevant effects are in the public interest, it

must impose any condition it thinks appropriate. Following a decision that the designated project

is in the public interest, the project may proceed.

[694] The question is whether only the “adverse effects within federal jurisdiction” must be in

the public interest, or, as Alberta contends, the project as a whole must be in the public interest,

because the factors to be considered are either i) themselves outside of federal jurisdiction or ii)

sufficiently broad that the public interest determination extends beyond effects within federal

jurisdiction.

i.

Consideration of broad factors in federal decision-

making is constitutional

[695] As noted, a distinction must be drawn between legislating on a matter and decision-making

pursuant to that legislation. Canada relies on this distinction, and it has been considered in

academic commentary,²³⁴recently expressed in this way:

... there is a distinction between legislating on a matter and making decisions under

that legislation. So long as a statute is intra vires, La Forest J indicated that the

considerations that may inform decision making under it are not restricted to the

jurisdictional root anchoring that legislation.²³⁵

[696] An example La Forest J gives in Oldman River at 69-70 is the Australian case, Murphyores

Incorporated Pty. Ltd. v Commonwealth of Australia (1976), 136 CLR 1 (HC), which describes a

Minister being able to make an export decision under his trade and commerce power that includes

considerations which do not themselves relate to trade and commerce.

[697] Environmental impacts, by their very broad and pervasive nature, require broad,

multifactorial consideration. “Quite simply, the environment is all around us and as such must be

part of what actuates many decisions of any moment”: Oldman River at 70.

ii.

Consideration of broad factors in federal decision-

making does not mean the decision – the public interest

determination – extends beyond effects within federal

jurisdiction

[698] It is important to bear in mind that the jurisdictional questions shift as one goes through the

impact assessment process:

234

Reconsidering Red Chris at 272. See also La Forest J himself in Oldman River at 69.

Johnston at 114.

235

Page: 194

[W]e need to consider federal jurisdiction at three key stages: (1) in deciding

whether to do an assessment; (2) in deciding the scope of an assessment, and (3) in

the post-assessment decision-making processes. With respect to the decision to

carry out a federal assessment, the process would need a trigger that gives careful

consideration to the potential of a proposed activity to affect an area of federal

jurisdiction. It seems clear that in principle, the federal government has the

constitutional authority to carry out an assessment where a proposed activity has

a realistic potential to affect an area of federal jurisdiction. With respect to the

scope of the assessment, it seems unlikely in light of cases such as Oldman, Red

Chris, and Syncrude that once a federal EA is triggered, courts would impose limits

on its scope. And with respect to post-assessment decision-making, there is some

uncertainty about the precise limits of federal jurisdiction, but it is clear that the

results of the assessment need to lay a proper foundation for federal decision-

making. If the assessment identifies clear impacts on areas of federal jurisdiction,

there would be a solid basis for federal jurisdiction that implements an integrated

approach to addressing the impacts identified.²³⁶[emphasis added]

[699] There is an important distinction between the impact assessment stage and the decision-

making stage. Section 22(1)(a) allows a federal assessment to consider “the changes to the

environment or to health, social or economic conditions and the positive and negative

consequences of these changes that are likely to be caused by the carrying out of the designated

project” [emphasis added]. However, this does not mean that the IAA sanctions a federal decision-

maker deciding whether a project as a whole is in the public interest. It is important to note that

s 22 sets out factors to consider at the impact assessment stage. At the impact assessment stage,

the Agency is trying to obtain as much information about the project as possible.

[700] However, the decision-making stage is different, and the relevant considerations are

narrower (at least in terms of mandatory factors set out in the IAA) and centred upon whether the

effects within federal jurisdiction are in the public interest (ss 60, 62, 63), though the decision-

maker must also take the assessment report into account: ss 60, 63.

[701] That is not to say that a federal Minister or the Governor in Council at the decision-making

stage need necessarily only consider “positive” effects of the project (e.g., jobs created) to offset

the adverse effects within federal jurisdiction (e.g., harm to fish). But it is possible for a federal

decision-maker to consider certain factors like those in s 63 (e.g., sustainability) because they are

relevant to “adverse effects within federal jurisdiction” without the “public interest” decision being

merely the sum total of all the positive and negative aspects of the project. Negative effects of the

project which are not themselves within federal jurisdiction may inform concepts like

sustainability that are used to determine whether adverse federal effects are deemed to be

acceptable in the circumstances. However, because one side of the ledger is always adverse federal

236

Jason MacLean, Meinhard Doelle & Chris Tollefson, “Polyjural and Polycentric Sustainability Assessment: A

Once-In-A-Generation Law Reform Opportunity” (2016) 30 J Env L & Prac 3 [MacLean, Doelle & Tollefson] at 44-

45.

Page: 195

effects, very minor adverse effects within federal jurisdiction are unlikely to outweigh

countervailing considerations and a designated project will not be prohibited from proceeding

merely because it has negative effects outside federal jurisdiction of which the Minister or

Governor in Council may disapprove.

[702] It is true that after compliance with the IAA regime, a local project such as a new in situ oil

sands extraction facility could fail to obtain authorization because the environmental effects in

federal jurisdiction are not in the public interest. However, that result does not mean the IAA regime

is unconstitutional or has squeezed out the operation of the EPEA. There are three junctures at

which the two processes may intersect – substitution (s 31(1)), delegation (s 29) and joint review

(s 39(1)) - under which the assessment processes address the adverse environmental effects in

federal jurisdiction, and the project may be authorized. There is nothing in the IAA to suggest that

the federal assessment regime is simply duplicating the provincial assessment process and thus

occupying the entire field of environmental assessment so as to block resource development. As

noted in GGPPA SCC at para 65, “[c]ourts should generally hesitate to attribute to Parliament an

intention to occupy an entire field” [emphasis added].

j.

Materiality and the Incidental Effects Doctrine

[703] The majority suggests that even if the effects of an intra-provincial designated project are

linked to a federal head of power, federal jurisdiction is not engaged until the point at which the

effects become “significant”. Significance being a kind of constitutional pre-requisite, the IAA is

unconstitutional, at least in part, because it allows federal decision-makers to prohibit adverse

effects within federal jurisdiction from taking place even if those effects do not attain this

threshold.

[704] The theory relies on the vernacular of the “incidental effects doctrine”, using the term

“incidental” to mean that if a local project wholly within provincial legislative authority, such as

an oil sands extraction facility, has only an “incidental” qua “insignificant” impact on a federal

matter, such effects are constitutionally irrelevant, and cannot be subject to federal constitutional

authority. As I understand this in practical terms: if a few Canada geese meet their death in the

tailings pond of a mega oil sands project authorized under provincial legislation, Parliament lacks

the constitutional authority to protect them by environmental regulation to the extent the project’s

effects on geese are merely “incidental effects” of the province’s exercise of authority.

[705] With respect, this use of the concept of “incidental effects” is misplaced. The majority

seeks to equate insignificant effects with incidental effects – and as a corollary, significant effects

with non-incidental effects – in hopes of creating a clean dividing line (significance) to determine

when effects become constitutionally relevant. However, whether or not the effects of a project

are “significant” says nothing about whether they are “incidental effects” for purposes of the

division of powers. Indeed, from the point of view of valid provincial legislation, the effects of a

provincially authorized project on federal heads of power will always be incidental effects,

regardless of the degree of materiality or significance.

Page: 196

[706] The incidental effects doctrine provides that if an impugned law is in “pith and substance”

within a head of power assigned to the enacting legislature, the fact that such law may have

“incidental effects” on another head of power outside the jurisdiction of the enacting legislature is

irrelevant for constitutional purposes: Hogg at §15:5; Paul v British Columbia (Forest Appeals

Commission), 2003 SCC 55 at para 14, [2003] 2 SCR 585; Firearms Reference at para 49. It is

crucial to parse these terms of art. In the constitutional context, the term “incidental effects” means

“consequential effects”: Reference re Upper Churchill Water Rights Reversion Act, [1984] 1 SCR

297 at 332. It also means effects which are “collateral and secondary to the mandate of the

enacting legislature”: Canadian Western Bank v Alberta, 2007 SCC 22 at para 28, [2007] 2 SCR

3, emphasis added [Canadian Western Bank].

[707] Because “incidental effects” refer to consequences which are collateral or secondary to a

law’s dominant purpose and effects, it does not necessarily speak to the magnitude of the effect on

the head of power of the other level of government. Such effects can be minor in nature; however,

they can equally constitute a “substantial impact” (Hogg at §15.5) or be of “significant practical

importance” (Canadian Western Bank at para 28). Accordingly, when a provincial law authorizing

a local project has effects in areas of federal jurisdiction (e.g., migratory birds), those effects will

be “incidental” regardless of whether they are significant because they are collateral or secondary

to the provincial law’s pith and substance.

[708] If effects being “significant” were indeed synonymous with effects being more than merely

incidental, and thus constitutionally relevant for purposes of triggering federal jurisdiction, on the

majority view, federal assessments of local projects would only ever be triggered in instances

where provincial legislation authorizing such projects was itself ultra vires. The point of incidental

effects as a doctrine is to condone as proper and expected “incidental intrusions into matters subject

to the other level of government’s authority” (Canadian Western Bank at para 28) without thereby

rendering that law unconstitutional. Although the effects of a law may reveal its pith and substance,

incidental or consequential or collateral effects “will not disturb the constitutionality of an

otherwise intra vires law”: Global Securities Corp. v British Columbia (Securities Commission),

2000 SCC 21 at para 23, [2000] 1 SCR 494. Once the effects of a provincial law on a federal head

of power are no longer merely “incidental”, however, it becomes a law that in “pith and substance”

relates to a federal subject matter and is invalid.

[709] The incidental effects doctrine does not mean that merely “insignificant” effects – whether

relative to the magnitude of the intra-provincial undertaking, or absolutely – put such effects

beyond the pale of Parliament’s legislative authority. Moreover, in my view, that incidental effects

may be discounted in the constitutional analysis does not mean that the opposing constitutional

authority must show that the impact is material vis-a-vis the magnitude of a project or activity, or

in absolute terms. Public policy concerns militate against a high threshold to trigger protection

under environmental legislation in any event. It is not for the courts to tell Parliament at what point

it is allowed to be concerned about harm to the environment in areas within its constitutional

jurisdiction.

Page: 197

k.

IAA: Cooperative Federalism, not Federal Veto

[710] Provincial environmental assessment regimes vary from province to province.²³⁷The

EPEA governs the regime in Alberta.²³⁸Under the EPEA, regulations prescribe what types of

activities require an environmental assessment.²³⁹Not all projects are subject to an assessment.

For example, a surface coal mine producing more than 45,000 tonnes per year would require an

environmental assessment, but the drilling or operation of an oil or gas well would not.²⁴⁰

[711] The IAA purposes are detailed above, but generally, the legislative purpose is to foster

sustainability and to protect the environment and health, social, and economic conditions within

Parliament’s legislative authority from adverse effects caused by designated projects. Some of the

EPEA purposes are to protect the environment, support sustainable development, predict social,

environmental, and economic consequences, and consult with stakeholders: EPEA, s 40.

[712] The IAA employs an environmental impact assessment approach culminating in a report

that sets out the effects that may be caused by the designated project and from among those effects,

those that are adverse effects within federal jurisdiction: s 28(3).

[713] The EPEA employs an environmental impact assessment approach culminating in an

“environmental impact assessment report” that must describe the proposed activity and its various

effects. The EPEA sets out 15 requirements for the report, including a description of the proposed

activity, the need for the activity, as well as potential positive and negative environmental, social,

economic, and cultural impacts: s 49.

[714] The EPEA impact assessment report will be used for decision-making by the appropriate

regulator (such as Alberta Environment and Parks, the Alberta Energy Regulator, or the Alberta

Utilities Commission) to decide whether the activity is in the public interest.²⁴¹

[715] Alberta submits that its environmental assessment regime and the federal environmental

regime cannot comfortably co-exist: a project could be subject to a rigorous and full assessment

under the Alberta assessment regime, resulting in an approval, perhaps with significant conditions,

but that provincial process could be entirely frustrated by an IAA review arriving at a different

237

Doelle & Tollefson at 594.

238

Affidavit of Corinne Kristensen (“Kristensen Affidavit”), Alberta Record, Vol 1, paras 13-17, A3-A4.

239

See Environmental Assessment (Mandatory and Exempted Activities) Regulation, AR 111/1993 [Activities

Regulation]. The EA Director also has discretion to subject a proposed activity to an environmental assessment, see

EPEA, s 44.

240

Activities Regulation, Schedules 1 & 2.

241

Kristensen Affidavit, Alberta Record, Vol 1, para 19, A5.

Page: 198

decision about the public interest, and withholding federal approval to proceed. This would

constitute a significant “displacement” of the provincial regulating regime and impairment of

provincial jurisdiction: Alberta’s Factum at para 129.

[716] Alberta submits that environmental, social, economic, and Indigenous benefits and impacts

are already addressed under its provincial regulatory regime which considers local and regional

concerns arising from the exercise of exclusive provincial jurisdiction over resource management,

provincial lands, and undertakings. Instead of being a planning tool in aid of federal decision-

making, Alberta sees the IAA as broadly regulating all “effects” of a designated project allowing

for a veto of projects that provincial review processes approve as in the public interest. In this way,

Alberta submits the IAA is a “Trojan horse” - a “colourable device to invade areas of provincial

jurisdiction which are unconnected to the relevant heads of federal power”: Ibid at para 132, citing

Oldman River at 72.

[717] It is true that a federal decision under the IAA can halt a project. But there are several

problems with Alberta’s characterization of this federal role as a “veto”. It fails to recognize the

legitimate role of the federal government in assessing projects that cause effects within federal

jurisdiction, manifest in different ways: (1) a true interpretation of the IAA shows it has

strengthened its control over adverse environmental effects in federal jurisdiction rather than

sought to control outcomes of the federal and provincial processes; (2) federal and provincial

decision-makers make different decisions, rather than one exercising a “veto” power; (3) the

approach that a project cannot proceed as proposed without endorsement by both levels of

government has been in place since at least Oldman River; and (4) both the IAA and EPEA are

designed to facilitate cooperation between levels of government rather than one holding a “veto”

power over the other.

i.

IAA strengthens control over environmental effects in

federal jurisdiction

[718] Rather than adopting a “veto” approach, the IAA has carved out its areas of environmental

concern in federal jurisdiction and focussed on controlling those effects. It is fair to observe that

the federal government has strengthened its control over its own assessment process in the IAA.

An example is the IAA’s elimination of the concept of equivalency. Under CEAA, 2012,

equivalency allowed the federal government to exempt a project from the federal environmental

assessment process if the project was undergoing an equivalent provincial assessment: s 37.²⁴²This

exemption meant there would be no federal decision with respect to the project. Under the IAA,

even if a different jurisdiction carries out the impact assessment, it appears that there will always

be a federal decision to approve or deny the project.²⁴³

242

Doelle & Tollefson at 609, 612.

243

Ibid at 618.

Page: 199

[719] Though the IAA allows the Minister to substitute a provincial process for impact

assessment, the Minister still maintains certain controls over the assessment. Before approving a

substitution, the Minister must be satisfied the provincial assessment meets certain criteria: ss 31,

33. It must consider the same factors as a federal impact assessment, provide federal authorities

with an opportunity to participate, allow for public consultation, and identify the adverse effects

within federal jurisdiction: s 33. The Minister also has the power to seek additional information

from a proponent or province after reviewing the report from a substituted assessment: s 35.

[720] Though this may be increased federal oversight of provincial assessments, it is also a way

for the Minister to ensure that the federal effects of a project are assessed in accordance with

federal standards. The IAA deems that a substituted assessment is an impact assessment for the

purposes of the IAA and satisfies all statutory and regulatory requirements: s 34. Since the federal

government will use a substituted assessment to make its decision about whether the effects of the

project within federal jurisdiction are in the public interest, it is reasonable for the federal

government to ensure that its own environmental standards are met.

ii.

Federal and provincial decision-makers make different

decisions, rather than a “veto” of one by the other

[721] The concept of a “veto” signifies one decision-maker over-ruling another with respect to a

single decision. That is not the result here. Rather, the provincial and federal decision-makers are

making different decisions (albeit with overlap). One is deciding whether effects within provincial

jurisdiction are in the public interest, while the other is deciding whether effects within federal

jurisdiction are in the public interest. These are distinct inquiries and decisions.

iii.

The approach that a project cannot proceed as proposed

without endorsement by both levels of government has

been in place since at least Oldman River

[722] To the extent a “veto” simply means that a given project cannot go ahead as proposed

without both levels of government “signing off” on the project (assuming it engages federal

jurisdiction), this has always been the case, certainly at least since Oldman River. In academic

commentary on Oldman River, Steven Kennett describes the federal government as having a

“veto” over projects. ²⁴⁴As discussed, Kennett then makes the case for federal-provincial

cooperation in such circumstances.²⁴⁵

iv.

The IAA and EPEA are designed to facilitate cooperation

rather than a competitive veto, one over the other

244

See Steven A Kennett, “Federal Environmental Jurisdiction After Oldman” (1993) 38:1 McGill L J 180 at 191 at

200.

245

Ibid at 203.

Page: 200

[723] Both the IAA and EPEA are expressly designed to permit and encourage inter-jurisdictional

cooperation in the conduct of assessments and sharing of information across agencies and

governments. Both are drafted to work harmoniously to achieve these aims. Both recognize among

their purposes, the importance of inter-jurisdictional cooperation: EPEA, s 2(h); IAA, s 6(1)(e).

[724] Both statutes contain general provisions permitting the respective Minister to enter into

agreements with the government or agency of another jurisdiction on various matters pertaining to

environmental assessment: see EPEA, s 19; IAA, s 144(c)-(d). In practice, federal-provincial

cooperation has existed between Canada’s and Alberta’s environmental assessment regimes for

decades. An early agreement to coordinate through a bilateral agreement is the Canada-Alberta

Accord for the Protection and Enhancement of Environmental Quality, OC 8775, (1975). Later

came the 1993 Canada-Alberta Agreement for Environmental Assessment Cooperation, the most

recent iteration of which was from 2005. It continues to be used by Canada and Alberta in

establishing joint review panels. For instance, the recent Joint Review Panel decision regarding

the Grassy Mountain Coal Project references the 2005 bilateral agreement in the agreement to

establish the joint review panel.²⁴⁶This project was reviewed under CEAA, 2012. The 2005

bilateral agreement was signed when CEAA, 1992 was in force and yet it clearly continued to apply

after CEAA, 1992 was replaced by CEAA, 2012. Nothing presented in this Reference suggests that

the bilateral agreement does not apply now under the IAA.

[725] Several provisions of the IAA are designed specifically to avoid duplication of effort in the

assessment process. The Agency may delegate any part of an impact assessment and report

preparation to another jurisdiction: s 29. The Minister may substitute the assessment process of

another jurisdiction for the process under the IAA, upon request (s 31) and upon being satisfied of

certain aspects of the process: s 33(2). Every federal authority in possession of expert information

or knowledge with respect to a designated project must make that information available to a

government or agency conducting a substituted assessment: s 23(c). Section 36 requires the

Minister, when deciding whether to refer an impact assessment to a review panel, to consider

opportunities for inter-jurisdictional cooperation: see also ss 21(1)(p), 92-93. Section 39 provides

for the joint establishment of a review panel with another jurisdiction.

[726] Similarly, the EPEA contemplates overlap and permits inter-jurisdictional agreements to

allow the assessment process to be carried out jointly (s 57(b)); or to provide for the adoption by

one or both jurisdictions of all or part of the assessment process and reports of the other: s 57(c).

Section 55 permits the Minister, following the submission of an environmental impact assessment

report, to make any recommendations in respect of the activity to the government or agency of

another jurisdiction.

²⁴⁶Alberta Energy Regulator & Impact Assessment Agency of Canada, Decision 2021 ABAER 010: Benga Mining

Limited, Grassy Mountain Coal Project, Crowsnest Pass (Report), by the Joint Review Panel Established by the

Federal Minister of Environment and Climate Change and the Alberta Energy Regulator, CEAA Reference No 80101

(17 June 2021).

Page: 201

[727] Both the federal and provincial statutory schemes envision and support consultation and

the sharing of information relating to environmental assessments and related matters: see IAA,

ss 21, 22(1)(o); EPEA, ss 10, s 12(b).

[728] That a goal of the IAA is to promote cooperation and coordinated action between federal

and provincial jurisdictions is shown by the Minister’s statements during the Bill C-69 legislative

debates. In Second Reading in the House of Commons, the Minister made the following

comments:

I am very pleased that we are bringing forward better rules for reviewing major

projects. That is not just pipelines. That is hydro projects. That is mines ...

[W]e will have a single agency, the impact assessment agency of Canada, which

will lead all impact assessments for major projects. That will ensure the approach

is consistent and efficient. That is something the industry made very clear that it

needed. Also, our goal is one project, one review. We need to streamline the

process and coordinate with provinces and territories to reduce red tape for

companies and avoid duplicating efforts in reviewing proposed projects. We have

also reduced the timelines.²⁴⁷[emphasis added]

[729] These goals were reiterated at Third Reading in the House of Commons.²⁴⁸

[730] In summary, the IAA and EPEA contain provisions that contemplate cooperation between

various jurisdictions and agencies, including Canada’s Agency, Alberta’s agencies, and

Indigenous jurisdictions. The IAA and EPEA schemes can cooperate and are “not incompatible

with the boundaries dictated by the Constitution Act, 1867”: Pan-Canadian Securities Reference

at para 18. The principle of co-operative federalism supports such an interpretation that will, in

turn, foster and support the division of powers: Ibid at paras 17-18. An interpretation of the IAA

that permits interlocking federal and provincial environmental processes to coexist is also

consonant with the double aspect principle and the presumption of constitutionality.

v.

Section 92A(1): Exclusive Jurisdiction over Natural

Resources?

[731] Alberta’s position is effectively that s 92A of the Constitution Act, 1867, sometimes called

the “resource amendment”, creates an enclave for non-renewable resources that is immune from

247

“Bill C-69 An Act to enact the Impact Assessment Act and the Canadian Energy Regulatory Act, to amend the

Navigation Protection Act and to make consequential amendments to other Acts”, 2nd reading, House of Commons

Debates, 42-1, No 267 (27 February 2018) at 17401 (Hon Catherine McKenna).

248

“Bill C-69 An Act to enact the Impact Assessment Act and the Canadian Energy Regulatory Act, to amend the

Navigation Protection Act and to make consequential amendments to other Acts”, 3rd reading, House of Commons

Debates, 42-1, No 313 (12 June 2018) at 20774-8.

Page: 202

federal assessment. This would mean there is no “federal aspect” to “provincial” natural resource

projects which nevertheless impact federal matters, such as fish, because s 92A(1) grants the

provinces exclusive jurisdiction over all aspects of environmental consequences from exploration

and management of natural resources.

[732] The starting point for considering s 92A must be first principles.

[733] The fact that provinces have exclusive jurisdiction to legislate “in relation to” a subject

does not mean federal legislation of general application cannot apply to that subject. This is a

crucial distinction in Canadian constitutional law which acts to ensure that a subject within the

exclusive jurisdiction of one level of government (e.g., “Indians, and Lands reserved for the

Indians”) does not become an enclave immune from the application of all legislation of the other

level of government: Cardinal v Attorney General of Alberta, [1974] SCR 695 at 702-703. Indeed,

it is this distinction that allowed federal assessment legislation to apply to a local work and

undertaking like the dam in Oldman River without it being legislation in relation to a local work

and undertaking. Where a local project has a “federal aspect” (i.e., an effect on an area of federal

jurisdiction), Canada can legislate in relation to that aspect without usurping the “exclusivity” of

provincial jurisdiction.

[734] The same is true of s 92A(1), which is the only “exclusive” power in s 92A. There is no

reason why s 92A(1) should be interpreted differently from other provincial powers in s 92, such

that the “double aspect” doctrine does not apply to natural resource projects. First, there is no

significance to the placement of s 92A as a standalone provision, which was necessitated by the

fact that two of its three legislative powers – inter-provincial trade (s 92A(2)) and taxation (s

92A(4)) – are not exclusive powers but concurrent powers and thus incapable of being listed

amongst the exclusive powers in s 92. Second, the reference to “conservation” in s 92A(1)(b) does

not relate to “the environment” generally, but “non-renewable natural resources and forestry

resources” only.

[735] Moreover, there is no support for the view that s 92A(1) creates an enclave of exclusive

provincial power, either in decided cases or academic authorities. Instead, it is well established

that the powers in s 92A, in affirming provincial powers over exploration, development,

conservation and management of non-renewable natural resources, do not diminish any pre-

existing powers of Parliament: Westcoast Energy Inc v Canada (National Energy Board), [1998]

1 SCR 322 at paras 80-84, 156 DLR (4th) 456; Ontario Hydro v Ontario (Labour Relations Board,

[1993] 3 SCR 327 at 376-378 (per La Forest J), 410 (per Iacobucci J, dissenting), 107 DLR (4th)

457; GGPPA SCC at para 346, per Brown J (in dissent but not on this point); Robert D Cairns,

Marsha A Chandler & William D Moull, “Constitutional Change and the Private Sector: The Case

of the Resource Amendment” (1986) 24:2 Osgoode Hall L J 299 at 299-300; Robert D. Cairns,

Marsha A. Chandler & William D. Moull, “The Resource Amendment (Section 92A) and the

Political Economy of Canadian Federalism” (1985) 23:2 Osgoode Hall L J 253 at 272.

Page: 203

[736] Subsection 92A(1) authorizes provincial legislation with intra-provincial purpose and

effect, but federal powers remain intact:

Unlike the other subsections of section 92A, subsection 92A (1) states that its

enumerated powers are conferred ‘exclusively’ on the provincial legislatures.

Because of this, it could be suggested that subsection 92A (1) restricts federal

legislative powers to the extent that it may have amplified provincial legislative

powers. But this is not really the case. For one thing, nothing in subsection 92A

(1) – or in the rest of section 92A, for that matter – limits the extraordinary powers

of Parliament over natural resources. These considerable powers include the

authority to assume legislative jurisdiction over intra-provincial subject-matters in

emergencies, or by invoking the federal declaratory power in section 92(10)(c),

under which Parliament can unilaterally declare a local work wholly within a

province to be ‘for the General Advantage of Canada’ and thus transfer that work

to exclusive federal jurisdiction. Further, the more ordinary constitutional powers

of Parliament (such as its jurisdiction over extra-provincial trade and commerce)

do not usually allow it to legislate directly ‘in relation to’ intra-provincial subject-

matters, such as those listed in subsection 92A (1). Thus, the entrenchment of those

intra-provincial powers in the Constitution ‘exclusively’ in favour of the provinces

does not seem to take from Parliament any jurisdiction that it had before section

92A. In any event, the judicially developed doctrine of ‘paramountcy’ (by which

federal legislation prevails over provincial legislation in any event of direct

conflict) grants precedence to any federal measure that is at odds with a provincial

measure enacted under subsection 92A (1), notwithstanding that both orders of

government may be exercising ‘exclusive’ legislative powers.

…

Section 92A does not appear to diminish federal legislative powers. By subsection

92A (3), those powers are expressly preserved in relation to the new provincial

‘export’ jurisdiction under subsection 92A (2). They are preserved by implication

with respect to the new provincial taxation jurisdiction under subsection 92A (1),

because these taxation powers are not said to be ‘exclusive’ to the provinces. And

they are preserved by implication with respect to the regulatory powers conferred

on the provinces by subsection 92A (1), even though the provincial powers are there

said to be ‘exclusive’: this is because nothing in that provision restricts either the

extraordinary purposes of Parliament to legislate for intra-provincial purposes or

the ordinary powers of Parliament to legislate for extra-provincial purposes. In

any event, the judicially developed doctrine of paramountcy will continue to accord

precedence to any federal legislative measure in the event of a direct conflict with

249

any provincial measure enacted under subsection 92A(1).

[Emphasis added]

²⁴⁹William D Moull, “The Legal Effect of the Resource Amendment – What’s New in Section 92A?” in J Peter

Meekison, Roy J Romanow, and William D Moull, eds, Origins and Meaning of Section 92A: The 1982 Constitutional

Amendment on Resources (Montreal: Institute for Research on Public Policy: 1985) 33 at 53-54, 61.

Page: 204

[737] Nor is the view that s 92A creates an enclave of exclusive provincial power consistent with

the extrinsic evidence found in the constitutional debates leading up to the passage of s 92A.²⁵⁰

[738] And finally, an interpretation of s 92A as an enclave of provincial powers is plainly

inconsistent with the Supreme Court of Canada decision in Moses at para 36:

There is no doubt that a vanadium mining project, considered in isolation, falls

within provincial jurisdiction under s. 92A of the Constitution Act, 1867 over

natural resources. There is also no doubt that ordinarily a mining project anywhere

in Canada that puts at risk fish habitat could not proceed without a permit from the

federal Fisheries Minister, which he or she could not issue except after compliance

with the CEAA. The mining of non-renewable mineral resources aspect falls within

provincial jurisdiction, but the fisheries aspect is federal.

[739] In short, the fact that provinces have exclusive legislative jurisdiction over natural

resources in s 92A(1) of the Constitution Act, 1867 does not preclude federal legislation from

applying to natural resource projects located solely in one province. Just as the provision does not

prohibit the application of the Fisheries Act, it does not immunize local natural resource projects

from federal assessment legislation like the IAA. Accordingly, such natural resource projects are

not enclaves immune from federal environmental legislation any more than federal undertakings

are enclaves immune from provincial environmental legislation: Reference re Environmental

Management Act (British Columbia), 2019 BCCA 181 at para 93, aff’d 2020 SCC 1.

3.

Conclusion as to Validity of the IAA and Regulation

[740] In my opinion, the IAA and its Regulation are a valid exercise of Parliament’s authority to

legislate on the matter of the environment. Section 7 of the IAA prohibits proponents of physical

activities or designated projects on the Project List (or by Ministerial order) from doing anything

to advance the project if it may cause effects within federal jurisdiction until it can be determined

whether any such adverse effects are in the public interest. Most of the designated projects involve

activities within areas of federal jurisdiction and prima facie within s 91 of the Constitution Act,

1867 – such as national parks, interprovincial railways, or offshore oil and gas facilities – that may

have effects upon areas also within federal jurisdiction, such as fish habitat, federal lands, or

Indigenous peoples. The remainder of the designated projects are intra-provincial and prima facie

within s 92 or 92A of the Constitution Act, 1867 – such as certain mines and metal mills, and oil

and gas facilities – that may have effects upon areas of federal jurisdiction, such as fish habitat,

federal lands, or Indigenous peoples. In either case, the project-based federal environmental

assessment regime in the IAA and Regulation target adverse environmental effects in federal

jurisdiction.

250

Canada, Parliament, Minutes of Proceedings and Evidence of the Special Joint Committee of the Senate and of the

House of Commons on the Constitution of Canada, 32nd Parl, 1st Sess, No 54 (5 February 1981) at 54:38 to 54:76.

Page: 205

[741] The history, extrinsic and intrinsic evidence, and the literal interpretation of the IAA and

Regulation support its constitutionality, as do the presumption of constitutionality, double aspect

doctrine, and imperatives of cooperative federalism.

C.

Inter-Jurisdictional Immunity

1. Issue not Raised by Reference Questions

[742] Alberta submits that the IAA should be declared ultra vires in its entirety, but if found valid

as limited to activities under federal jurisdiction, the doctrine of interjurisdictional immunity

applies so that this Court should declare that the IAA does not apply to activities and undertakings

exclusively under provincial jurisdiction, including those “designated activities” listed in the

Regulation. Alberta contends there is a minimum unassailable core of federal and provincial heads

of power into which the other level of power cannot intrude. Its argument comes back to the

position that the IAA and Regulation constitute a federal veto power over provincial projects; that

the core of the power to manage and develop natural resources must include the final determination

of whether a given project should proceed based on an evaluation of its benefits and effects. The

federal approval process therefore impairs the provinces’ exclusive legislative competence.

[743] Canada replies that the doctrine of interjurisdiction immunity presumes the law is valid, so

that this argument is beyond the scope of the specific Reference questions.

[744] Professor Hogg recounts the ways to attack a law said to be outside the jurisdiction of the

enacting legislature. The first is to argue “that the law is invalid because the matter of the law (or

its pith and substance) comes within a class of subjects that is outside the jurisdiction of the

enacting legislative body”: Hogg at § 15:16. The question posed by this Reference is: are the IAA

and Regulation “unconstitutional in whole or in part, as being beyond the legislative authority of

the Parliament of Canada under the Constitution of Canada?” The question before us involves the

first method of attack: it asks whether the law is invalid because it is beyond Parliament’s

jurisdiction.

[745] The second approach is to “acknowledge that the law is valid in most of its application, but

to argue that the law should be interpreted so as not to apply to the matter that is outside the

jurisdiction of the enacting body … the law is not held to be invalid but simply inapplicable to the

extra-jurisdictional matter”: Ibid. This approach of limiting the applicability of a law by reading it

down is defined by Professor Hogg, and others, as the doctrine of interjurisdictional immunity.

[746] The third approach is to argue “that the law is inoperative through the doctrine of

paramountcy … that, where there are inconsistent federal and provincial laws, it is the federal law

that prevails; paramountcy renders the provincial law inoperative to the extent of the

inconsistency”: Ibid [emphasis in original]. This method of attack is not used in this case.

Page: 206

[747] This Reference questions the constitutional validity of the IAA and Regulation. The answer

to the questions posed is that the IAA and Regulation are either invalid as unconstitutional or are

valid. Alberta’s submission that this Court should declare the IAA and Regulation inapplicable to

the extent of their application to activities and undertakings it says are exclusively under provincial

jurisdiction – natural resources, for example – raises a question not within the scope of this

Reference. Our jurisdiction is limited to the question asked. This is a full answer to the

interjurisdictional immunity argument raised by Alberta: application of the doctrine is beyond the

scope of this Reference. The argument that interjurisdictional immunity was beyond the scope of

the Reference questions was accepted in Reference Re Greenhouse Gas Pollution Pricing Act,

2019 SKCA 40 at paras 206-209.

2.

If the Application of the Doctrine of Interjurisdictional Immunity is

Not Beyond the Reference Scope, In Any Event, It Does Not Apply Here

[748] The IAA and Regulation are either constitutionally valid or invalid. If they are valid, and

the application of the doctrine of interjurisdictional immunity is not beyond the scope of this

Reference, then a preliminary issue is whether the doctrine applies to federal legislation at all, such

that a federal law can be found inapplicable for having intruded too deeply into provincial

jurisdiction. The doctrine serves to determine whether the valid law is applicable or operative in

these specific circumstances: Canadian Western Bank at para 76. In my view, the

interjurisdictional immunity doctrine does not apply in the circumstances of this case.

[749] Alberta relies on Canadian Western Bank to submit that the IAA meets both parts of the

test for application of the doctrine of interjurisdictional immunity: the IAA encroaches on Alberta’s

exclusive jurisdiction over development and management of natural resources under s 92A of the

Constitution, 1867, and profoundly impairs it by creating a federal veto power over natural

resources projects. A law that trenches on the core of power of another level of government must

be read down so as not to apply to the matter within the other level of government’s jurisdiction.

[750] Canada submits that the Supreme Court of Canada has limited the application of the

interjurisdictional immunity doctrine and rejected its application to protect provincial legislation

from the application of federal legislation on the occasions when it has been argued, citing Canada

(Attorney General) v PHS Community Services Society, 2011 SCC 44 at paras 61-64, 67-70, [2011]

3 SCR 134 [PHS] and Carter v Canada (Attorney General), 2015 SCC 5 at paras 49-53, [2015] 1

SCR 331.

[751] The parties join issue over whether the doctrine of interjurisdictional immunity applies to

federal legislation at all, such that a federal law can be found inapplicable for having intruded too

deeply into provincial jurisdiction. The Supreme Court of Canada has never found an instance

where a province has been able to avail itself of the interjurisdictional immunity doctrine, though

it has suggested that the doctrine is theoretically reciprocal: Canadian Western Bank at para 35.

However, the Court in that case also called for a restrained approach to the doctrine, noting that

Page: 207

“interjurisdictional immunity is of limited application and should in general be reserved for

situations already covered by precedent”: Canadian Western Bank at para 77 [emphasis added].

[752] What this “means in practice”, said the Court more recently, is “that we will usually not

expand the doctrine to protect the core of legislative powers that have not already been so defined

in our jurisprudence”: Desgagnés Transport at para 93. In my view, since there is no precedent to

date on protecting the “core” of s 92A(1), this case, involving as it does the environment and

environmental protection legislation, already found by the Supreme Court of Canada to cut across

heads of both federal and provincial power, is not the circumstance in which to expand the doctrine.

[753] Second, and alternatively, if it is decided that s 92A(1) is an appropriate candidate for the

application of the doctrine of interjurisdictional immunity, it would still have to be determined

what the “core” of s 92A (1) is and whether the IAA and Regulation impair that core.

[754] The test for application of the interjurisdictional immunity doctrine is summarized

in Desgagnés Transport at para 92: “Two conditions must be met for the doctrine to apply. First,

the impugned provision must trench on the core of an exclusive head of power under the

Constitution Act, 1867. Second, the effect of this overlap must impair the exercise of the core of

the head of power”.

[755] Alberta contends that even if the IAA is valid, federal assessments should be inapplicable

to natural resource projects falling under s 92A because the IAA impairs the “core” of s 92A(1). It

is incumbent upon Alberta to delineate a “core” of an exclusively provincial power: PHS at para

68. The issue in the PHS case was “whether the delivery of health care services constitutes a

protected core of the provincial power over health care in s. 92(7), (13) and (16) . . . and is

therefore immune from federal interference”: at para 66. The Court concluded that it did not. In

PHS, the Court rejected the proposed core of the “provincial health power” because such “a vast

core would sit ill with the restrained application of the doctrine called for by the jurisprudence”:

Ibid at para 68.

[756] Alberta’s identification of the core of its power to manage and develop natural resources is

“the ultimate decision over whether and when resources will be developed, and the balancing of

the interests central to such decisions” (Alberta’s Factum at para 154).

[757] Alberta identifying the “core” of s 92A(1) as the ultimate decision over the development

of natural resources is too broad, since it would then immunize natural resource projects from

federal legislation such as the Fisheries Act, clearly a function of the federal fisheries power under

s 91(12). A “core” is meant to be a subset of the overall power: Canadian Western Bank at para

51; Desgagnés Transport at para 95. Conversely, the ultimate decision over whether and when

resources will be developed, and the balancing of the interests central to such decisions, seems to

subsume the entirety of the power itself.

Page: 208

[758] Alberta identifying the “core” of the natural resources power more specifically as the

issuance of ultimate approval or permits for natural resource projects is also problematic since the

IAA does not impair a province’s ability to issue approval or permits – what the IAA does, at least

in certain circumstances, is make those permits insufficient for the project to proceed as planned.

But so does the Fisheries Act in certain cases. The logical extension of Alberta’s analysis rendering

the IAA inapplicable to natural resource projects would likewise render federal legislation like the

Fisheries Act inapplicable, directly contrary to express federal powers under s 91.

[759] In these two ways, Alberta’s position seeks to turn natural resource projects that fall under

s 92A into “enclaves” immune from federal legislation. The notion of an “enclave” of power runs

contrary to modern federalism, with its emphasis on the double aspect doctrine, overlapping

jurisdiction, and cooperative federalism, in favour of the long discarded “watertight

compartments” doctrine. In the words of the Chief Justice writing for the Court in PHS: “the

doctrine of interjurisdictional immunity is narrow” and its “premise of fixed watertight cores is in

tension with the evolution of Canadian constitutional interpretation towards the more flexible

concepts of double aspect and cooperative federalism”: para 70. Indeed, as noted above,

environmental assessment legislation is itself a quintessential example of these modern trends

because shared jurisdiction over “the environment” has required that Canada and the provinces

work together – often through bilateral agreements – to properly deal with multifaceted

environmental concerns.

VI.

Conclusion

[760] It is my opinion that the IAA, establishing a federal environmental impact assessment

regime, is a valid exercise of federal constitutional authority. The answers to the questions are:

Is Part 1 of An Act to enact the Impact Assessment Act and the Canadian Energy Regulator

Act, to amend the Navigation Protection Act and to make consequential amendments to

other Acts, S.C. 2019, c. 28, unconstitutional in whole or in part, as being beyond the

legislative authority of the Parliament of Canada under the Constitution of Canada? No.

Is the Physical Activities Regulations, SOR/2019-285, unconstitutional in whole or in part

by virtue of purporting to apply to certain activities listed in Schedule 2 thereof that relate

to matters entirely within the legislative authority of the Provinces under the Constitution

of Canada? No.

[761] The federal environmental assessment regime in the IAA and Regulation prohibits projects

on the Project List that may have effects in federal jurisdiction – on fish and fish habitat, aquatic

species, migratory birds, on federal lands or federally funded projects, between provinces, outside

Canada, and with respect to Indigenous peoples – from proceeding unless and until the proponents

engage the process and a decision is made that an assessment in unnecessary or that it is in the

public interest for the project to proceed.

Page: 209

[762] The IAA and Regulation are the product of broad community consultation and the result of

effectuating the collective views of many stakeholders, including Indigenous groups, NGOs,

provinces, territories and municipalities, industry associations and companies.²⁵¹The IAA and

Regulation comprise Canada’s effort to move towards sustainability while balancing the interests

of the economy, communities, Indigenous peoples, and international commitments. Regulation of

environmental impacts to capitalize upon the earth’s resources with minimal impact is the way of

the future in a world where fresh air and clean water will be seen as fundamental human rights,

requiring a balance between the interests of a thriving economy and the interests of protecting the

environment and people from its harmful effects.

[763] In a thought-provoking cri de coeur written prior to promulgation of the IAA and

Regulation, environmental academics envisioned a future where sustainability assessments are

responsive to the interests of both the economy and the citizenry, calling for harmonization of

environmental assessment regimes among multiple jurisdictional actors, including the federal

government, provinces, territories, municipalities, Indigenous peoples, NGOs, academia, project

proponents and industry groups, as well as the Canadian public. This approach is anticipated to

have “the potential not only to resolve intensifying multijurisdictional disputes over the direction

of energy and economic development in Canada in a manner that is effective, efficient, and socially

inclusive, but also to develop widely-shared commitments about Canada’s future”.²⁵²

[764] All this to say, the complexities and urgency of the climate crisis call for co-operative,

interlocking environmental protection regimes among multiple jurisdictions, each functioning at

its highest and best within their constitutional jurisdiction.

[765] In my opinion, in enacting the IAA and Regulation, Parliament has established a federal

environmental assessment regime designed to regulate effects within federal jurisdiction caused

by physical activities or designated projects; and to authorize such projects when it is in the public

interest to do so, in cooperation with other jurisdictions that bear responsibility for the

environment, especially the provinces and First Nations. The IAA confines its reach to protection

of the environment and the health, social and economic conditions within Parliament’s legislative

authority from the adverse environmental effects of select activities that in its view, have the

greatest potential for adverse effects on areas of federal jurisdiction. Having done so, the

legislative regime prescribed in the IAA and Regulation is a valid exercise of Parliament’s authority

and compliant with the Constitution Act, 1867, as amended.

Special Hearing heard February 22-25, 2021

Opinion filed at Calgary, Alberta

251

See Canada, Canadian Environmental Assessment Agency, Building Common Ground: a new vision for impact

assessment in Canada (Final Report of the Expert Panel for the Review of Environmental Assessment Processes)

(Canadian Environmental Assessment Agency, 2017) at 86-106.

252

MacLean, Doelle & Tollefson at 66.

Page: 210

this 10th day of May, 2022

Greckol J.A.

Page: 211

Appearances:

E.B. Mellett

B.S. Gilmour

R.C. Steele

S.R. Assie

for the Appellant Attorney General of Alberta

B.F. Hughson

K.E. Boyd

J.R. Elford

for the Respondent Attorney General of Canada

J. Hunter

Y. Ranganathan

for the Intervenor Attorney General of Ontario

T. Irvine

N.S. Wernikowski

for the Intervenor Attorney General of Saskatchewan

R. Lindgren

J. Castrilli

for the Intervenor Canadian Environmental Law Association, Environmental Defence

Canada Inc. and Miningwatch Canada Inc.

A. Johnston

for the Intervenor Nature Canada

R.H. Reynolds, Q.C.

E.A. Picard

for the Intervenor Woodland Cree First Nation

P.G. Chiswell

R.L. Martz

B. Downey

for the Intervenor Canadian Association of Petroleum Producers and the Explorers and

Producers Association of Canada

M.A. Marion

B.R. Carlson

for the Intervenor Canadian Energy Pipeline Association

Page: 212

Page: 213

L.D. Rae

for the Intervenor Indian Resource Council

M. Price

A. Laskin

for the Intervenor Mikisew Cree First Nation

J.L. Ginsberg

A. McIntosh

for the Intervenor Ecojustice Canada Society

R.B.E. Hallsor, Q.C.

H. Felix

for the Intervenor Canadian Taxpayers Federation

P.A. Gall, Q.C.

A. Zwack

for the Intervenor Independent Contractors and Businesses Association and the Alberta

Enterprise Group

E.P. Murphy

M. Hulse

for the Intervenor Athabasca Chipewyan First Nation