What’s the “matter” with the IAA? Taking a Closer Look at the Alberta Court of Appeal’s Constitutional Analysis
The Alberta Court of Appeal recently assessed the constitutionality of the federal Impact Assessment Act  and Physical Activities Regulations  (collectively the “Assessment Regime”). The case is summarized here. The majority, led by Chief Justice Fraser, found the Assessment Regime to be unconstitutional . Justice Greckol, writing in dissent, found the Assessment Regime to be constitutionally valid. Although the respective approaches of the Justices do not follow identical paths, both decisions contain a thorough division of powers analysis, and it is those analyses that we will explore in this post.
The reference question
The question referred to the Court by the Government of Alberta was:
- 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?
- 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)
Despite arriving at different conclusions, both the majority and dissent utilized the same framework in analyzing the jurisdictional validity of the IAA – the long-established “pith and substance” test, first characterizing the “matter” of the impugned law (considering both purpose of the law and its effects), and then classifying that matter under one (or more) of the established heads of legislative power. Both the majority and the dissent considered the Physical Activities Regulations to be an integral part of the statutory scheme, such that the Assessment Regime had to be considered as a whole.
The majority found that the purpose of the Assessment Regime was to establish a federal regime to review and regulate all effects of designated projects , both federal and intra-provincial, noting that this regime applies even in cases where the intra-provincial designated projects otherwise fell within exclusive provincial jurisdiction and despite all effects of such projects not being within federal heads of power. Moving to the effects of the Assessment Regime, the majority found that its legal and practical effect was to, in essence, authorize the federal executive to regulate all intra-provincial designated projects from inception to completion. As such, the majority concluded that the pith and substance of the Assessment Regime was “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” .
At the classification stage, the majority concluded that the subject matter of the Assessment Regime, when applied to intra-provincial designated projects, fell clearly within provincial jurisdiction, including the provinces’ powers over development and management of natural resources; proprietary rights as owners of public lands; local works and undertakings; management of public lands; property and civil rights; and local or private matters. Here, the majority noted that, if upheld, the unavoidable effect of the Assessment Regime would be the centralization of governance to the point that Canada would no longer be recognized as a true federation .
The majority further noted that while the “environment” is not a head of power assigned to either Parliament or provincial Legislatures, when either level of government 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 was not entitled to require federal oversight and approval of intra-provincial activities otherwise within provincial jurisdiction on the basis that the environmental effects of those projects affected a federal head of power.
Justice Greckol concluded that the Assessment Regime is a valid exercise of Parliament’s authority to legislate on the matter of the environment. This conclusion was largely based on her interpretation of the Assessment Regime as the regulation of effects. She concluded that the purpose of the IAA 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” . The effects of the law are simply the requirement for affected projects to comply with the Assessment regime, the time and resource costs to do so, and the penalties and permit rejections that might result from not doing so. As such, she concluded that the pith and substance of the Assessment Regime 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” (emphasis added) . In other words, the Assessment Regime targets effects in federal jurisdiction.
At the classification stage, Justice Greckol found that “the language used in [the IAA] is jurisdiction-limiting” . Some designated projects, such as those within national parks and offshore oil and gas facilities were not controversial, as they clearly fell within areas of federal jurisdiction. However, the controversial set of designated projects (i.e. those that are intra-provincial and prima facie within provincial jurisdiction, such as mines and metal mills and oil and gas facilities), may still have effects on areas of federal jurisdiction, such as fish habitat, federal lands, or Indigenous peoples. She found that the Assessment Regime therefore fell within many federal heads of power.
Justice Greckol further supported her decision with the principles of the presumption of constitutionality, double aspect doctrine, and cooperative federalism. She noted that the Supreme Court of Canada has held that the environment “is a diffuse subject” that cuts across both provincial and federal jurisdiction and that governments should work cooperatively on issues of overlapping jurisdictions such as this . As provincial resources and environments do not exist in isolation, effects from provincial projects will necessarily have impacts across the country .
It will come as no surprise to anyone that there is a continued push-and-pull between the Federal and Provincial governments when it comes to jurisdiction over the environment. There is no disagreement that environmental protection is critically important, or that there is a role for both the Federal and Provincial governments in effecting this goal. The contentious point is where the limits of cooperative federalism lie.
It is noteworthy that when the majority of the Court assessed the “matter” (pith and substance) of the IAA, the emphasis was on the activities being regulated, while Greckol, JA, focused on the effects of those activities. It is therefore not entirely surprising that, despite using a similar analytic approach, the opinions diverged significantly on the ultimate constitutionality of the IAA. Evidently, each approach is underpinned by a distinctly different philosophy, with the majority warning that “[t]he concept is cooperative, not coercive, federalism” , and Greckol, JA noting that “[w]e 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” .
This case is sure to draw parallels between the dissenting judgments in References re Greenhouse Gas Pollution Pricing Act (both in the Supreme Court of Canada  and the Courts of Appeal below ) and given the Federal Government’s pledge to appeal the present case to the Supreme Court of Canada, it will be interesting to see which approach to federalism prevails.
 SC 2019, c 28, s 1.
 In a concurring opinion, Justice Strekaf agreed with the majority, noting only a reservation (on which she explicitly made no comment) on the narrow point of de facto expropriation.
 Reference re Impact Assessment Act, 2022 ABCA 165 at para 205; emphasis in original.
 Ibid at para 372.
 Ibid at para 423.
 Ibid At para 582.
 Ibid at para 593.
 Ibid at para 605.
 Ibid at paras 444, 451.
 Ibid at paras 446-448.
 Ibid at para 189.
 Ibid at para 451.
 2021 SCC 11.
 2020 ABCA 74; 2019 ONCA 544; and 2019 SKCA 40.