Two environmental laws. Two constitutional challenges. Two Supreme Court of Canada (Supreme Court) opinions. Two different outcomes. An examination of two recent environmental law cases demonstrates the reach and limitations of the federal government’s ability to make laws in relation to environmental issues.
In the first case, References re Greenhouse Gas Pollution Pricing Act, the Supreme Court was asked to consider whether the federal government has the authority to pass legislation that puts a price on carbon. The outcome in the case hinged on a rarely used residual power of the Parliament of Canada to make laws on matters of national concern.
In the second case, Reference re Impact Assessment Act, the Supreme Court had to determine whether the federal government’s environmental assessment regime was constitutional.
Together, the two cases and their divergent results highlight the different pathways the Supreme Court may take in determining the constitutionality of environmental legislation. Both reference cases are also examined in detail in two forthcoming HillStudies.
The Problem with “the Environment”
Jurisdiction over the environment is shared between the federal and provincial levels of government. While the Constitution Act, 1867 (the Constitution) divides exclusive legislative authority between either the federal parliament in section 91 or provincial legislatures in section 92, it makes no specific reference to the environment. Rather, the subject matters that fall under the umbrella of “the environment” may be found under federal or provincial powers. In general, federal powers include fisheries, navigation and shipping, the criminal law and “Indians and lands reserved for the Indians.” Provincial powers include property and civil rights in the province, all matters of a merely local or private nature, and non-renewable natural resources, forestry resources and electrical energy. As a result, neither level of government can claim exclusive jurisdiction across the environment and, depending on what is being regulated and how, either can claim constitutional legitimacy. This shared jurisdiction can at times give rise to contested areas of legislative authority.
In addition to enumerating federal powers, section 91 of the Constitution reserves to Parliament a broad residual power that allows it to legislate on any matter for the “Peace, Order, and Good Government of Canada” that is not explicitly given to the provinces. Judicial interpretation has limited the use of this residual power to, among other things, matters of national concern. For example, the residual power has been used when a matter has become so important to Canada as a whole that it goes beyond the abilities of individual provinces to manage it effectively. This is a rarely used power: federal legislation relying on the national concern doctrine has been upheld just seven times since Confederation in 1867.
Both the division of powers and national concern approaches lie at the heart of two recent and significant Supreme Court opinions on environmental law.
References re Greenhouse Gas Pollution Pricing Act
In 2018, as part of efforts to mitigate climate change by reducing greenhouse gas (GHG) emissions in Canada, Parliament enacted the Greenhouse Gas Pollution Pricing Act (the GGPPA). It established minimum national standards for carbon pricing. Provinces and territories could either enact their own legislation with a pricing scheme in compliance with the GGPPA or adopt the federal standard. Provinces and territories that did not implement carbon pricing that met minimum national standards by January 2019 would have the federal standard applied in their jurisdiction.
In three separate references to their respective courts of appeal, the governments of Alberta, Ontario and Saskatchewan challenged the constitutionality of the GGPPA. They argued that, among other things, the GGPPA infringed on exclusive provincial authority to make laws in relation to property and civil rights, matters of a purely local or private nature within the province, and the development, conservation and management of non-renewable natural resources in the province. In split decisions, the courts of appeal for Saskatchewan and Ontario held that the GGPPA is constitutional, while the Court of Appeal of Alberta held that it is unconstitutional.
In March 2021, in a majority opinion in References re Greenhouse Gas Pollution Pricing Act, the Supreme Court held that the GGPPA is constitutional as a valid exercise of Parliament’s ability to legislate for the peace, order and good government of Canada. It noted that provinces and territories could create their own GHG pricing regimes and that the GGPPA would apply only in jurisdictions where the minimum standard was not met. Climate change, it stated, causes a harm that transcends provincial boundaries, and federal action is necessary. Indeed, the majority stated that GHG reduction is “critical to our response to an existential threat to human life in Canada and around the world.” In the majority’s view, taking all these factors into consideration, the GGPPA addressed a matter of national concern.
Reference re Impact Assessment Act
Enacted as part of the omnibus Bill C-69 in 2019, the Impact Assessment Act (the IAA) repealed and replaced the Canadian Environmental Assessment Act, 2012. The IAA and its Physical Activities Regulations set out a scheme for determining whether major projects designated under the IAA required an impact assessment and the components of that assessment. Under the IAA’s stated focus of “effects within federal jurisdiction,” it originally assessed all positive and negative environmental, social, economic and heritage impacts of designated projects. The IAA listed a broad range of mandatory factors to be considered in assessing projects, including a number that were not clearly linked to a recognized federal power.
The Government of Alberta asserted that the IAA was unconstitutional as it went beyond Parliament’s legislative authority. In 2022, the Court of Appeal of Alberta agreed, stating that the IAA “would permanently alter the division of powers” set out in the Constitution. The federal government appealed the decision to the Supreme Court.
In October 2023, in Reference re Impact Assessment Act, the Supreme Court held that most of the IAA was unconstitutional on the grounds that the Act’s decision-making functions were not sufficiently tied to “effects within federal jurisdiction” as defined in the Act. It also found that the term “effects within federal jurisdiction” was overly broad and not clearly limited to matters under federal legislative authority. The Supreme Court held that the IAA enabled an almost “untrammelled power” to regulate entire projects as a whole rather than simply the federal aspects of those projects. Moreover, the Court noted the “astonishing” breadth of certain clauses.
In light of the Supreme Court’s decision, in May 2024, the IAA was amended to restrict the scope of the Act to “non-negligible adverse” changes to matters within clearly identified federal powers.
What Do These Decisions Mean?
These decisions represent a wide spectrum of parliamentary authority over the environment. The GGPPA decision is based on a view that assigns to Parliament a broad residual power that allows it to legislate on subjects of national concern. This power is tempered in at least two important ways: it may be used only for subjects not reserved for the provinces, and its use must be “rare” and “exceptional.” If the threshold to be met under this residual power is an “existential threat to human life in Canada and around the world,” it is difficult to imagine many circumstances that would reach that level.
The IAA decision was the most in-depth review of federal authority over environmental assessment in 30 years. The decision makes at least three important statements. It noted that the subject matter of the environment touches on federal and provincial heads of power; therefore, no one level of government occupies the field. The Supreme Court upheld Parliament’s authority to enact environmental assessment legislation that is directed at the federal aspects of projects, but it also clearly affirmed that Parliament must confine its legislative efforts to its own constitutional sphere.
Most significantly, some commentators have suggested that the IAA decision is a defence of provincial autonomy and a reminder to the federal government that it must respect the Constitution’s division of powers. The decision draws a clear line between, on the one hand, the federal government’s ability to collect information on and assess the environmental impacts of a wide range of effects and activities and, on the other hand, its authority for making decisions about those effects and activities. While Parliament has significant latitude over the former, it must make decisions only with respect to those effects and activities within federal jurisdiction.
Additional Resources
Carlson, Brett, Aidan Paul and Peter D. Banks. “Supreme Court finds Federal Impact Assessment Act Unconstitutional.” BLG, 13 October 2023.
Uukkivi, Raivo et al. “What Now? The Supreme Court of Canada Finds the Federal Impact Assessment Act Largely Unconstitutional.” Cassels, 16 October 2023.
By Sam N.K. Banks, Library of Parliament
Categories: Agriculture, environment, fisheries and natural resources, Law, justice and rights