Trampling on the provinces with C-69
Ottawa’s new rules for environmental assessment under Bill C-69 will enact the Impact Assessment Act (IAA) to replace the current Canadian Environmental Assessment Act 2012 (CEAA 2012). This bill is now before the Senate, and various commentators have raised concerns with this new legislation, including uncertain timelines and unclear criteria.
As Alberta’s Premier Rachel Notley highlighted recently, Bill C-69 also risks exceeding federal jurisdiction under Canada’s Constitution. Courts have so far confined federal environment assessments of provincially regulated projects to assessing impacts within federal jurisdiction.
In contrast, Bill C-69 expressly requires consideration of impacts beyond federal jurisdiction. Bill C-69 raises the prospect that a federal minister might prohibit, for example, an oil sands project on the basis of an environmental impact unconnected with a federal power. This would intrude on provincial jurisdiction for natural resources and matters of local concern. In its “sober second thought” on this IAA, Canada’s Senate must ensure this legislation respects the federal-provincial division of powers in Canada’s Constitution.
Like its predecessor CEAA 2012, the IAA will trigger an impact assessment based on an initial review of impacts of designated projects. Designated projects are physical activities that are identified in a schedule to regulations or a minister’s order. Among other physical activities, the current CEAA 2012 regulations designate construction or expansion of fossil-fuel-powered generating stations and oil refineries, as well as oil sands, metal or diamond mining.
Bill C-69 prescribes a set of mandatory factors for the Impact Assessment Agency of Canada (which would replace the present Canadian Environmental Assessment Agency) to determine whether an environmental assessment is required and for the minister or cabinet to determine whether a project is in the public interest. Notably, the mandatory factors include “adverse effects within federal jurisdiction or adverse direct or incidental effects.” Bill C-69 therefore requires consideration of both adverse effects within federal jurisdiction as well as those outside it.
The addition of adverse or incidental effects beyond the federal jurisdiction broadens the scope of review: in CEAA 2012, environmental effects are defined as those within the legislative authority of the federal Parliament or that are directly or incidentally related to the exercise of federal authority.
Courts are very mindful of the balance between federal and provincial powers under Canada’s constitution — and have so far limited the scope of federal environmental review to impacts within federal jurisdiction. In its 1992 decision in Friends of the Oldman River Society vs. Canada, the Supreme Court cautioned that federal environment review is not to be a “Trojan horse” for conducting a “far ranging inquiry into matters that are exclusively within provincial jurisdiction” or as “a colourable device to invade areas of provincial jurisdiction which are unconnected to the relevant heads of federal power.” The court further stated that federal environmental review must be “truly in relation to an institution or activity that is otherwise within (federal) legislative jurisdiction” and “environmental effects to be studied can only be those which may have an impact on the areas of federal responsibility affected.”
Importantly, the Supreme Court in Oldman also discussed how the extent of federal environmental assessment depends on the relevant federal power: for example, the federal jurisdiction for railways would allow the federal government to weigh environmental and socio-economic considerations of a new railway line; however, a federal approval grounded only in the federal jurisdiction over fisheries and navigation would not extend to environmental impacts without a connection to that federal power.
Additionally, Bill C-69 requires consideration of how a project will impact Canada’s climate change obligations. However, it does not specify whether this assessment would include upstream or downstream greenhouse-gas emissions. Nor indicate how carbon pricing should be considered. Importantly, courts have yet to confirm the federal government’s jurisdiction under the constitution to regulate GHGs.
Canada’s Senate should closely scrutinize the proposed IAA to ensure that it respects the constitutional division of powers. Given the politicization of environmental reviews, major projects in Canada face a high degree of regulatory uncertainty — with a consequent impact on the attraction of investment. The federal government will not allay these concerns by creeping into provincial jurisdiction.
THE BILL EXPRESSLY REQUIRES CONSIDERATIONS BEYOND FEDERAL JURISDICTION.