Before turning to the dissenting opinion, it may be instructive to note some of the key points made by the Alberta Court of Appeal (ABCA) in their 10 May 2022 reference decision. The reference opinion may be found at CanLit.
ABCA Majority
In the majority ABCA opinion, considerable space was devoted to the history, purpose and scope, of the section 92A resource amendment (paras 74-83). The majority contended
Provincial governments should not be faulted for focussing their attention on matters important to their citizens. That includes not only the environment but also the economy. It is a false dichotomy to suggest that the two are mutually exclusive. Without a strong economy, a province’s ability to respond to the needs of its citizens, including meeting the challenges of climate change, is diminished (para. 83).
This perspective of how economy and environment goals are reconcilable is held in some elite circles- particularly big business, some think tanks, and in some federal department and resource-based provincial governments, and is still in the rhetoric of some progressive politicians.
However, what if the two cannot be reconciled as the cumulative effects of climate heating are experienced? In a money economy, which most of the world is, everything is reducible to dollars and cents. This pecuniary perspective seems to be accepted by most of the courts in this country. While we have a price for carbon, which has been an object of financialization, and hence speculation, we recently are seeing the unravelling of pricing and taxing pollution.
In has been six decades since Rachel Carson’s polemic Silent Spring woke up an affluent society, where chemicals and industrial waste was ignored. In 2023 despite convincing evidence piling up in medical labs about the carcinogenic effects of chemicals, including tobacco, and methane and CO2, nothing effective has been done to reverse the use of fossil fuels.
Next, the Alberta majority (Fraser, Watson, McDonald, concurrence by Strekaf) review the federal environmental impact assessment legislation as well as impact assessment laws in Alberta, and the operational impacts of such legislation in Ontario, Saskatchewan (paras 84 to 144). According to the opinion :
[124] For decades, Alberta has played an international leadership role in developing oil and gas resources in an environmentally responsible manner. Alberta was one of the first jurisdictions in Canada to implement an environmental impact assessment process. It first enacted legislation for this purpose in 1973, more than a decade before federal environmental assessment legislation
The foregoing account can also be found in Alberta briefing books and industry advertising.
The ABCA majority cited Justice Gerard La Forest writing for the majority of the court in Oldman River (Friends of the Oldman River Society v Canada (Minister of Transport), [1992] 1 SCR 3). Justice La Forest argued that
one level of government cannot engage in an environmental assessment of a project unless the project requires the authorization of that government based on a constitutional power or unless the other level of government consents (para 231).
Perhaps the strongest statement is with respect to intra-provincial projects
Parliament does not have the constitutional jurisdiction to regulate intra-provincial designated projects from inception to completion merely because they may, or will, have some effects on a matter otherwise within federal jurisdiction (para. 232).
The majority go on to say
even if the effects of an intra-provincial project are linked to a federal head of power, there is no requirement under this legislative scheme that the effects even be significant before the federal executive can deny a positive public interest determination and effectively end the project (emphasis mine).
The majority carry on saying that if the purpose (pith and substance) of the law is within exclusive provincial jurisdiction, the fact there is a federal law which could involve “substantial impact” on federal jurisdiction is “irrelevant for constitutional reasons” (para 242). Nor is the need for a federal permit for a intra-provincial project mean such a project would fall under the IAA.
[294] To bring this down to reality, there are several ways GHG emissions could be reduced. A few examples, which admittedly are at one end of the extreme, for illustrative purposes only. Limit the number of children per family. Stop eating beef and become vegetarian. Stop drinking dairy milk. Stop living in single family homes. Limit the square footage a person, couple or family can occupy. Stop heating homes above a prescribed temperature and stop cooling homes below a prescribed temperature. Stop using gas appliances. Stop driving vehicles that cannot achieve a stringent mileage level per litre. Stop driving vehicles of any kind. Stop taking holidays that involve leaving home by plane, car or bus. Stop eating as much. Stop spending as much on consumer goods. Shut down all cruise vessels and all plane travel for pleasure. Shut down the dairy and cattle industry. Shut down all cement plants. Shut down the auto industry and aerospace industry. Shut down all electrical power generation plants. Shut down the production and export of coal. And shut down the entire Canadian oil and gas industry.
The majority continued at paragraph 295 stressing “the inconvenient fact is that Canada will continue to require oil and gas to meet the daily needs of Canadians for years, measured in double digits, if not three or possibly four decades into the future.” This claim borrows heavily from the toolbox of industry and the Alberta government. Indeed, the Court reprises the Kenney era doctrine of Alberta’s obligation as a “democratic” state to meet the energy security needs of Canada and other democratic nations.
Chief Justice Fraser held that the use of various aspects of exclusive federal jurisdiction such as Indians and lands reserved for Indians could give Parliament almost unbridled authority over provincial jurisdiction of intra-provincial activities. Indeed, it is the province’s “duty to consult and accommodate to the extent necessary and appropriate is with the Indigenous entity involved, not with the federal government (emphasis mine, para. 307). The majority concern being that the IAA could intrude into province’s ability to reach agreements with First Nations and “smacks of paternalism (para 316).” This may clear the runway for intra-provincial SAGD projects with local indigenous support.
The ultimate public interest determination by the Governor in Council does not consider the designated project “as a whole is in the public interest, but whether the adverse effects are in the public interest (emphasis mine).” This type of reverse onus could make it very difficult to get oilsands projects and its energy intensive extraction process through the current federal cabinet- a big worry of the Big Four oilsands producers and the Alberta government which depends heavily on bitumen royalties to balance budgets.
Much attention is also paid to the law’s distinction between effects in the public interest and “adverse effects within federal jurisdiction.” In so determining the public interest, factors including: the project’s contribution to ”sustainability;” whether the adverse effects are “significant;” adverse effects on the rights of “Indigenous peoples of Canada;” and whether the project “hinders” or “contributes” to the federal government’s “ability to meet its environmental obligations and its commitments in respect of climate change.” To the majority the effect is that decisions on projects, including intra-provincial designated projects, “will be made having regard to federal priorities and policies“ (para 333).
The same difficulty with an overbroad usage of the fish and fish habitat head of power brought the Alberta Appeal Court to a reconsideration of the Oldman River decision. The majority notes that while Justice La Forest was clear that the federal government was within its jurisdiction to use a public interest test to grant or relax a federal permit. However, La Forest did not say the federal government could use a public interest determination to deny a federal permit. A federal rejection of the intra-provincial project must be based the federal power “properly engaged,” not a negative, public interest determination.
In the end, the gist of the analysis is that Parliament has given the federal cabinet an “effective veto over intra-provincial designated projects.”
The majority also makes observations that there are no finite time limits for the federal executive to make a public interest determination.
Flowing out of this is a concern that the federal executive can delay economic development within a province through use of this power, potentially indefinitely, giving a de facto veto to the federal government. According to the majority, nor could a court make orders when the permit is still under review, which could be a very, very long time or at least the length of one government opposed to development. And even if the Court looked at the issue of executive discretion, the Court would, by precedent, be compelled not to second guess the subjective judgment of elected politicians.
To cryptically summarize, the majority spell out the practical effects of the IAA as-
- Delay
- Uncertainty
- No appeal or remedy
- De facto expropriation
A cynic might say this is code for chasing away capitalism, or at least capitalism of the extractive sort.and that may well be the unstated agenda of “the Laurentian elite.”right.
The ABCA majority agreed with the federal government’s lawyers that the IAA is “not severable and ought to stand or fall on its own,” in contrast to the Supreme Court’s opinion which upheld sections 81-91 and found parts of the decision-making processes (designation and information gathering) not constitutionally offensive.
Dissent by Justice Karakatsanis and Jamal
According to the two dissenting justices “The IAA’s text, context, and purpose demonstrate that all major decisions under the federal impact assessment scheme must be based on a project’s adverse effects within federal jurisdiction” (para. 22- emphasis mine). They argue that the Act is anchored in several heads of powers including “interprovincial and international pollution,” referencing section 91. They write that even if the IAA “could conceivably be used unconstitutionally in some cases does not mean that the legislation is unconstitutional” (para 224).
Premising their reasoning on the fact that “major environmental risks have only intensified” (para. 226), the dissenting justices rely more heavily than the majority on the presumption of constitutionality and the need for intergovernmental co-operation (paras. 228-229). This can involve “reading down” to confine administrative decisions within
the power of the enacting legislative body (para. 231).
Next, following constitutional jurisprudence the justices characterize and classify the impugned federal statute. Citing the Canadian Western Bank, PHS Community Services, and Global Securities v. BCSC cases, the justices note the “law’s secondary objectives or incidental effects do not affect its constitutionality, even though they may be of significant practical importance,” adding from the CWB case ““it is in practice impossible for a legislature to exercise its jurisdiction over a matter effectively without incidentally affecting matters within the jurisdiction of another level of government” (para 253).
On characterization, the dissent sees the IAA as narrower in scope than the majority-
the pith and substance of the designated projects scheme is, more specifically, to establish an environmental assessment process to (1) assess the effects of physical activities or major projects on federal lands, Indigenous peoples, fisheries, migratory birds, and lands, air, or waters outside Canada or in provinces other than where a project is located, and (2) determine whether to impose restrictions on the project to safeguard against significant adverse federal effects, unless allowing those effects is in the public interest (para 257).
This position is backed up by numerous references in the legislation tying the decision-making process to “adverse federal effects” (paras. 261-3). In the view of the dissenting justices, effects within federal jurisdiction do not encompass trivial effects (para 270-280) as the majority held and the ABCA. Karakastansis and Jamal argue “(T)he word “change” in relation to the environment necessarily connotes a materiality threshold” (para. 273) and that “the purpose and context of the legislation confirms that effects does not include trivial or insignificant effects,” citing the long title of the Act (para. 274) and variety of sections which contain the words “significant effects.”
With respect to industry and provincial governments’ concerns around prohibitions on physical activity when a project is designated, the law requires that a “precautionary principle” be used and “prohibitions do not extend to all activities in relation to designated projects; they extend only to those that “may cause” non-trivial federal effects” (emphasis in original paras. 286-287).
In the decision-making process, “(T)o be in the public interest, adverse federal effects must be outweighed on the other side of the ledger by public interest factors in s. 63, which include both negative and positive effects” (para. 293). This requires a cost-benefit analysis, analogous to what Chief Justice Wagner referred to as a “ledger”. Accordingly, the public interest decision must be “reasonable and proportionate “(emphasis in original- para. 294).
They challenge the majority’s argument that the pith and substance of legislation “results in delays of indeterminate duration”, and “the impact assessment process requires the Agency, the project proponent, federal authorities and other implicated jurisdictions to expend resources” (paras. 106-107). They write “(S)uch concerns relate to the efficacy or wisdom of the legislation. They may be important policy matters for Parliament, but they (expenditure of resources) are irrelevant for constitutional purposes” (para. 297).
On classification, “(U)nder the double aspect doctrine, “Canada and the provinces are both free to legislate in relation to the same fact situation” (para.301). In applying the classification test, the dissent emphasizes coexistence of responsibility and environmental regulation as a legitimate concern of governments (para 303-4). The justices disagree with the majority view -that the adverse federal effects do not drive decision-making, the federal effects are overbroad and do not align with federal jurisdiction, and the screening and decision-making “junctures” are ultra vires – “because adverse federal effects do not drive the scheme’s decision-making functions.”
With respect to the screening function, the project proponent must “set out information that includes the project’s potential adverse federal effects and the way the proponent is considering to mitigate them.” According to the majority, section 16 deals with the factors to be taken into account in the screen and characterizes them as an “open-ended list of factors, all of seemingly equal importance.” The dissenters argue contrary that the discretionary factors (a-c) are rooted in adverse federal effects, clause d) deals with indigenous groups consulted and section e) is largely irrelevant for most provincially regulated projects unless on federal lands or related to federal policies, programs, or plans (paras. 312-313). The dissenters also place considerable significance on the judiciary’s power to safeguard project proponents’ interests if federal regulation is “unreasonable.” However, access to courts are both costly and timely.
With respect to decision-making, the justices refer to the Oldman River case-
As a matter of precedent and constitutional principle, this Court’s decision in Oldman River highlighted the importance of not just integrated federal information collection at the impact assessment stage, but also integrated federal decision making at the public interest determination stage. Justice La Forest stated that it would be “unduly myopic” to confine environmental decision making to questions of the “biophysical environment alone”, and highlighted the need to have integrated “[e]conomic and environmental planning and management” (para. 322 – emphasis mine).
Justice La Forest gave as an example that it would “defy reason” if Parliament would be precluded from considering provincial harms in deciding whether to allow the an interprovincial railway line to proceed (para 324). The Justices add that the decision-making process allows for federal provincial co-operation allowing the federal government to substitute a provincial assessment for the federal assessment if requested by a province or to delegate a federal assessment to provincial authorities.
The minority disagree that that effects within federal jurisdiction are overly broad countering these adverse effects are legitimately anchored within federal jurisdiction (paras. 337– 35) namely, fish, migratory birds, species and risk, Indians and Indians and land, interprovincial and international pollution.
The Next Bataille Royale -Greenhouse Gases
Notably, the dissent states that with respect to GHG emissions, the federal government “would need to show that an individual project’s GHG missions would cause a non-trivial change to the environment in another province or outside Canada”(para. 351-emphasis mine). Letters from Guilbeault and Wilkinson and cited by the majority have referenced GHG emissions but GHG emissions were excluded in the Act or the regulation.
Proposed electricity regulations which the Alberta government is battling with a major advertising campaign “Tell the Feds” are expected to lead to further constitutional challenges.
[352] But to repeat: if particular exercises of federal authority under the IAA seek to stretch the boundaries of Parliament’s constitutional authority to regulate international and interprovincial pollution, including potentially GHG emissions, such instances can be addressed in future cases reviewing concrete government action and with the benefit of a well-developed evidentiary record. It is “neither necessary nor desirable” to address “speculative concern[s]” regarding potential misuse of the IAA in this reference (References re GGPPA, at para. 220).
Concluding Thoughts
We are entering the late innings of a classic federal -provincial struggle over property rights versus social, health and environmental well-being. This “bataille royale” will push Alberta separatism to a fever boil as Alberta’s preeminent industry faces lawsuits, increasing public criticism, and intense competition from renewable forms of energy generation. It is not clear that the “Tell the Feds” advertising is changing minds in the rest of the country. Add to this campaign is the unnecessary and ill-considered Alberta Pension Plan which pits a “greedy,” grievance driven Alberta against Canadians outside Quebec and Alberta.
As this drama unfolds, attention and resources must turn to novel legal arguments which may include fossil fuels industry’s effects on health and the environment and especially vulnerable First Nations living downstream of the oilsands. In the Supreme Court’s decision on the Greenhouse Gas Pollution Pricing Act, the Supreme Court acknowledged the existential crisis which is climate change. The related phenomena of wildfires, flooding and global heating may be put forward as products of cumulative GHG emissions.
As the industry’s main players such as EXXON and Chevron has doubled down on major fossil fuel company acquisitions, there is growing political frustration in Ottawa that the industry refuses to “get with the program.” The failure of Alberta’s energy regulator as well as Ottawa’s refusal to act on the tailings ponds issue may convince higher courts that more, not less, strengthening of environmental laws needs to happen.
Finally, in the dissent Karakatsanis and Jamal write
To give a concrete example, on the majority’s view, there is (properly) no constitutional objection to federal authorities prohibiting a nickel refinery in a province — a provincially regulated project — which has substantial economic benefits that are outweighed by substantial environmental harms to Indigenous peoples, Indigenous lands, or the rights of Indigenous people protected under s. 35 of the Constitution Act,1982 because such harms are adverse federal effects under the IAA. But, on the majority’s view, if the same project caused less substantial but still significant harm to Indigenous interests (thus triggering an adverse federal effect), federal authorities could not constitutionally prohibit the project on the basis that it might cause cancers or respiratory diseases to non-Indigenous peoples in neighbouring communities, because this would be to consider a constitutionally impermissible non-federal effect. To quote La Forest J. in Oldman River, this approach “defies reason” (p. 66).
Once again Albertans and Canadians will be confronted with the dilemma, the devil’s bargain, whether to continue accepting that our lifestyle;e will continue to improve or to face the reality that our planet and its climate can longer grant the material blessings we have for so long believed we are entitled to.
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