Canada’s Impact Assessment Act: A Constitutional Conundrum

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Article2023 | 11 | 21

Canada's Impact Assessment Act: A Constitutional Conundrum

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In 2019, the Canadian Parliament enacted the Impact Assessment Act (IAA) alongside the Physical Activities Regulations, aiming to strengthen and bring clarity to federal environmental impact assessment in Canada. This IAA sought to scrutinize the environmental, health, social, and economic impacts of significant projects, extending its reach both within Canada and internationally. However, this broad regulatory ambition was ultimately misguided and overreaching and triggered a constitutional challenge, raising critical questions about the reach of federal authority over the environment.

The IAA introduces a dual-layered framework: the first layer, under sections 81 to 91, deals with federal projects or those on federal lands or outside Canada. The first layer was confirmed to be constitutional. The second broadly encompasses “designated projects” as defined within the Act itself. It was the “designated projects” portion of the Act that was deemed unconstitutional. For designated projects, the IAA stipulates a three-stage process:

  1. planning
  2. impact assessment, and;
  3. decision-making.

The planning phase starts with the project description submitted to the Impact Assessment Agency, followed by a potential impact assessment demanding rigorous analysis, culminating in a report which feeds into the decision-making phase.

The constitutionality of the IAA and the Regulations was put to the test, precipitating a referral to Alberta’s Court of Appeal. The Court of Appeal’s majority declared the IAA and the Regulations unconstitutional in their entirety, a verdict that was then escalated to the Supreme Court of Canada.

Central to the controversy is the constitutional legitimacy of the federal impact assessment mechanism. The Court of Appeal held that while sections 81-91 are constitutionally sound, the broader scope of the IAA oversteps Parliament’s legislative competence. The ruling hinged on two primary points: the Act’s decision-making processes not being directed predominantly at “effects within federal jurisdiction,” and a misalignment between the IAA’s definition of “effects within federal jurisdiction” and the limits of federal legislative power.

The Supreme Court decision highlighted that the constitutional scrutiny process involves characterizing and classifying the law. Characterization examines the law’s purpose and effects to determine its “pith and substance,” considering both intrinsic and extrinsic evidence. Classification then allocates the characterized law into a category under sections 91 or 92 of the Constitution Act, 1867.

Through the “pith and substance” analysis, the Court aimed to ascertain the core purpose of the law and its effects to determine its jurisdictional validity. It found that the main intent of the IAA’s “designated projects” component—to assess and mitigate the adverse impacts of projects—extends beyond the federal scope because it does not adequately focus on federal concerns alone.

The ruling pointed out two primary constitutional issues with the IAA. Firstly, it argued that the Act’s criteria for initiating an impact assessment are too broad and not strictly related to federal effects. Secondly, the final decision-making process, meant to serve the “public interest,” improperly integrates non-federal impacts, potentially overshadowing federal considerations.

Furthermore, the definition of “effects within federal jurisdiction” in the IAA was deemed too expansive, potentially encompassing a wide array of interprovincial environmental changes. The Supreme Court concluded that the federal government’s justification for this breadth under the Peace, Order, and Good Government (POGG) clause was inadequate.

The Supreme Court’s decision emphasizes that environmental governance must maintain a delicate balance. While Parliament has the power to legislate environmental assessments, it must do so respecting the constitutional division of powers. By declaring parts of the IAA unconstitutional, the courts reiterate that environmental protection must be pursued without overstepping constitutional boundaries.

The legal intricacies surrounding the IAA reveal the tension in Canada’s approach to environmental legislation. The Act’s “designated projects” scheme, although designed to rigorously assess environmental impacts, has been deemed to extend beyond federal jurisdiction. The court found that the IAA, particularly in its decision-making processes, potentially asserts undue regulatory control over projects, including aspects traditionally within provincial jurisdiction. Furthermore, the definition of “effects within federal jurisdiction” in the IAA is criticized for being overly broad.

In contrast, the sections of the IAA from 81 to 91 stand constitutionally unchallenged, akin to processes validated in previous court cases like the Friends of the Oldman River Society v. Canada (Minister of Transport), [1992] 1 S.C.R. 3 decision. These sections are severable in the division of powers disputes and maintain constitutional integrity, separate from the challenged portions of the Act.

Justices Karakatsanis and Jamal provided a dissenting opinion, positing that the Impact Assessment Act (IAA) stands as a legitimate exercise of the federal parliament’s jurisdiction. They argue that environmental matters, inherently complex, straddle the line between federal and provincial governance, necessitating a collaborative approach to legislation.

Within their analysis, the justices stressed the imperative for mutual respect and presumed integrity between the different governmental tiers when crafting environmental assessment laws. Such legislation, they contend, should not be approached with an assumption of constitutional non-compliance nor be prematurely deemed unconstitutional based on its potential for misuse.

The justices advocate for a judicial interpretation that aligns with constitutional boundaries, advocating for an interpretation that allows for the concurrent functioning of statutes passed by both federal and provincial governments.


This case serves as a potent reminder of the intricate balance between environmental stewardship and constitutional law. It demonstrates the necessity for legislation to navigate the complex jurisdictional authority landscape, requiring legislative nuance and judicial oversight to preserve the constitutional equilibrium in Canada’s federal structure.


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Simon Garfinkel
Simon Q.K. Garfinkel

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Jonathan Katz
Jonathan Katz