Ottawa weakens impact assessment law to dodge court battles

Fearing the Impact Assessment Act could unravel if the federal government were to lose a court challenge, Ottawa revealed amendments to the legislation Tuesday that critics say marks a retreat from its responsibility to fight climate change.

The proposed changes are part of the federal government’s Budget 2024 implementation bill and will first need to be passed in Parliament to take effect, allowing time for further amendments. Amendments disclosed Tuesday include repealing some sections of the act like certain transboundary effects, such as greenhouse gas emissions, and reworking other sections to make it clear the legislation applies only to areas of federal jurisdiction.

Those jurisdictional concerns were pulled into sharp focus in October when the Supreme Court of Canada found the language of the Impact Assessment Act was too broad, giving way for Ottawa to unconstitutionally regulate areas of provincial jurisdiction. That kicked off a political firestorm, with premiers Danielle Smith, Doug Ford and Scott Moe citing the decision as proof of federal overreach, while Environment and Climate Change Minister Steven Guilbeault claimed there would only need to be “surgical” amendments to bring the act in line with the Supreme Court’s decision.

Tuesday’s proposed amendments are designed to insulate Ottawa from potential court challenges over its authority to regulate major projects in provincial jurisdiction.

Enacted in 2019, Ottawa’s Impact Assessment Act created the Impact Assessment Agency and tasked it with evaluating major projects, like the proposed Highway 413 in Ontario, Ring of Fire mining projects, liquified natural gas export terminals, oilsands expansions and more. The federal review of Highway 413 was cancelled in March owing to unresolved questions of constitutional authority.

Since October, behind-the-scenes discussions about what to do centred on one question: How much does the federal government want to test what the Supreme Court said?

“Some people are saying, I think it's OK to test a little bit, and other people are saying you probably don't want to go there. And I'm torn because part of me obviously wants to be as ambitious as possible, and part of me feels, ‘Oh my God, what if we lose another court case?’” Guilbeault told Canada’s National Observer in an interview before the amendments were tabled. “Our Impact Assessment Act would fall apart and then we would have nothing.”

Since Prime Minister Justin Trudeau’s government passed the Impact Assessment Act, Ottawa has introduced electric vehicle mandates, clean fuel standards, a carbon price and is working to pass clean electricity regulations and a cap on oil and gas sector emissions, Guilbeault said.

“We've beefed up our climate legislation and regulations so much that maybe it's not the end of the world if [greenhouse gas emissions are] not in the impact assessment as criteria to stop projects,” he added.

Lawyer and Ecojustice director Josh Ginsberg says Guilbeault’s reasoning that there are other tools available to deal with climate change falls flat. Ginsberg says those other policies, while important, do not deal with major sources of transboundary greenhouse gas emissions, like new oilsands projects, which would have an enormous impact on Canada’s ability to meet internationally binding commitments. If not an impact assessment, what federal tool can regulate areas of national concern, like greenhouse gas emissions that know no borders, that otherwise fall under provincial jurisdiction? he asked.

“I'd like to hear the answer to that question because I say the answer is none,” he said.

“The Supreme Court said that the federal government has to stay within its jurisdiction … but that doesn't mean the federal government has to run away from jurisdiction that it has under the Constitution,” Ginsberg added.

Groups like Ecojustice pushed the federal government to amend the legislation to include “nationally significant greenhouse gas emissions” as a trigger for federal assessment. That phrasing was an attempt to establish a threshold in line with federal responsibility. That language is not in the proposed amendments, but the phrase “non-negligible adverse change” in certain areas of federal jurisdiction allows for a federal review of projects.

It remains unclear if this will satisfy environmentalists' concerns.

Stephen Hazell, a retired environmental lawyer, former regulatory director with the Canadian Environmental Assessment Agency (a precursor to the Impact Assessment Agency) and founder of consulting firm Ecovision, told Canada’s National Observer there could be “potentially catastrophic impacts” for the federal government’s ability to protect the environment if Ottawa gives up its ability to regulate transboundary impacts.

“The bill repeals transboundary effects except in relation to marine pollution and interprovincial and boundary waters. Transboundary air pollution (GHGs, toxics, etc.) are no longer effects within federal jurisdiction,” he said. “Overall, the bill is a complete federal abdication to address proposed high-carbon projects such as in situ oil mines.”

A better option, Hazell says, would have been to amend the legislation to include “significant” transboundary effects as a trigger for federal review of projects.

Because some provinces claimed Ottawa was using jurisdiction over greenhouse gases to regulate areas of exclusive provincial jurisdiction, establishing a threshold for the emissions impact of a project to trigger a federal review is a way to strike a balance between competing jurisdictions, Hazell said.

‘Erring on the side of stupidity’

Because the impact assessment is wielded by Ottawa, it’s also long been a flashpoint for provincial governments that believe the federal agency was encroaching on areas of provincial jurisdiction. With Justin Trudeau’s government struggling in polls ahead of the next election, there are certainly members of cabinet who want to see political problems like battling provinces over major projects disappear, Hazell said.

Green Party Leader Elizabeth May offered a scathing rebuke to the changes, telling Canada’s National Observer in a recent interview the federal government is “erring on the side of stupidity.”

In May’s view, the constitutional issues with the Impact Assessment Act can be traced back to 2012 when then-prime minister Stephen Harper clawed back environmental protections in the legislation. That legislation replaced an assessment process from the 1990s, and May says when the Trudeau government overhauled Harper’s version, it kept many of the flaws.

“I'm hoping that we can actually restore environmental assessment to what it once was in this once-in-a-lifetime chance we have thanks to the Supreme Court reference case,” May said. “Going back to what we had … instead of trying to fiddle around and continue to try to make Harper's approach work.”

No chance, says Guilbeault.

He says that while May is probably one of the most knowledgeable people in the country about impact assessments, there’s a difference between proposing changes when you’re in opposition or as an non-governmental organization versus being in government and having to assume the consequences.

“There's no way we're getting a version of C-69 adopted in this Parliament with the time we have,” he said. “And Elizabeth, who is an experienced MP, should understand that more than anybody else, so I don't know why she's pushing for this.

“I love her with all my heart, but I profoundly disagree with her. It's impossible,” he said.

Hazell says both are right. He agrees with May that environmental assessments were much stronger before Harper, and that he, May and others “were quite vocal” that Harper’s approach carried “very significant constitutional risks.”

If it were possible to return to the pre-Harper environmental assessments, that would be much better than what the country has today, but there are tradeoffs, Hazell said.

“We agree that's a better law, but we just don't see how we can achieve that and have proper consultation before the next election,” he said. “And then after the next election, [Conservative Party of Canada Leader Pierre Poilievre] has said he's basically going to repeal the Impact Assessment Act and get rid of the Impact Assessment Agency, so it's hard to see how things would improve under a Poilievre government.”