Amending what’s not broken: The proposed amendments to the federal Impact Assessment Act

03 Jun Amending what’s not broken: The proposed amendments to the federal Impact Assessment Act

The Supreme Court of Canada (“SCC”) in its reference opinion determined that portions of the federal Impact Assessment Act (“IAA”) are unconstitutional. The federal government has recently proposed amendments to the IAA to align it with federal jurisdiction as the Supreme Court’s decision outlined.  These amendments effectively address many constitutional frailties pointed out by the SCC; if the amendments become law, the act will likely withstand Alberta’s intended constitutional challenge.

However, the amendments go beyond what is required by the reference opinion. The amendments fail to clarify whether significant interprovincial greenhouse gas emissions fall under federal jurisdiction. Additionally, the amendments put a greater emphasis on reducing barriers for industry by reducing the requirement for a detailed project description and limiting extensions to the timeline. Finally, the amendments emphasize allowing substituted processes to replace federal impact assessments.

The SCC decision

On October 13, 2023, a majority of the justices on the Supreme Court of Canada (“the Majority”) released their opinion on the constitutionality of the federal Impact Assessment Act (Click here for further details on the Majority’s constitutionality opinion).

A project is subject to the IAA if it is designated by regulation (Project List) or by Ministerial discretion (the “designation decision”). At the next stage, the project proponent submits information to the Impact Assessment Agency of Canada and the Agency decides whether an impact assessment will be conducted (the “screening decision”). If an assessment is conducted, the entity conducting the assessment collects further information and assesses wide-ranging factors, ultimately producing a report. Finally, the Minister or Governor in Council determines whether the federal impacts of the project, as defined by the act and outlined in the report, are in the public interest (“public interest decision”).

While the Majority upheld many aspects of the IAA, including the broad list of factors to be considered in conducting an impact assessment found in s. 22 of the IAA as well as the Project List approach to designation, it found several key elements of the act to be outside the jurisdiction of the federal government.[1]

The Majority determined the IAA is unconstitutional because

1. the screening decision is not directed at regulating effects within federal jurisdiction,
2. the public interest decision is not directed at regulating effects within federal jurisdiction, and
3. the definition of effects within federal jurisdiction includes areas outside of federal jurisdiction.[2]

Proposed Amendments to the Impact Assessment Act

The federal government has proposed amendments to the IAA in part, aimed at aligning it with federal constitutional jurisdiction as per the Majority’s reference opinion. These amendments were introduced as a part of the federal government’s recent budget bill, Bill C-69. Although overall the amendments are tailored to address the specific constitutional concerns identified by the SCC, there are also changes which are unrelated to the IAA’s constitutionality aimed at efficiency, timeliness, and federal-provincial cooperation.

Amendments aimed at constitutional validity

1. The designation decision

While the SCC found no constitutional issues with the designation power under ss. 9 and 109, Bill C-69 includes minor amendments to these sections. The amendments to the Minister’s designation power in s. 9 removes language that caused some confusion as to whether public concerns related to federal effects could warrant designation on their own. Consideration of public concerns remains in the section: the amendments specify that the Minister “may” consider public concerns related to adverse effects, the rights of Indigenous peoples under s. 35, another means of considering impacts, and “any other factor”.

The amendments to the s. 109 designation specifies that the Minister must make a finding that projects “may … cause adverse effects within federal jurisdiction or direct or incidental adverse effects” in order to designate them as physical activities to which the act applies.

While these amendments make sense given some ambiguity in the original wording, they are unnecessary from a constitutional perspective.[3] However, by specifying the designation power under ss. 9 and 109, the IAA may avoid the constitutional issues in the screening decision by lowering the chances “that projects with little or no potential for adverse federal effects will nonetheless be required to undergo an impact assessment based on less relevant, yet mandatory, considerations”.[4]

2. The screening decision

Section 16 governs the screening decision and details the considerations that must be taken into account by the Agency when deciding whether an impact assessment is required. The current provision mandates the consideration of “the possibility” of adverse effects. The proposed amendments would instead mandate the consideration of the adverse federal effects themselves. Additionally, the section is proposed to be amended to newly include consideration of means alternative to an impact assessment for addressing adverse effects.

Finally, it is proposed that s. 16 be amended to clearly state that an impact assessment is required only where the project may cause adverse effects within federal jurisdiction. The primacy of adverse effects is ensured by this condition precedent, addressing the Majority’s direction that “[t]he decision to require an assessment must be rooted in the possibility of adverse federal effects”.[5]

Fumes from an oil facility – Photo by Marek Piwnicki on Unsplash

3. The public interest decision

Sections 60 to 64 of the IAA outline the public interest decision-making framework which is a single balancing exercise aimed at determining whether adverse effects within federal jurisdiction and adverse direct or incidental effects, and the extent to which they are significant, are in the public interest.  Factors to be considered are outlined in s. 63.

The Majority found this decision-making structure to be unconstitutional because there was nothing in place preventing adverse effects not in federal jurisdiction from being the driver of the public interest determination.[6] The concern is that insignificant impacts on federal jurisdiction will be used as an excuse to regulate the entire project for an underlying reason that is not in federal jurisdiction.[7]

Amendments are proposed to these decision-making sections which will conceptually split the decision into two parts. The first is a determination of the significance of these adverse federal effects, considering any mitigation measures the decision maker considers appropriate. The second is a determination of whether these effects are “justified in the public interest”, considering both the result of the significance determination in the first part and the factors in s. 63. Amendments are proposed for the sections dealing with impact assessment report requirements in ss. 28(3), 33(2) and 51(1)(d)(ii) to align with the new decision-making structure.

Amendments are also proposed to the factors listed in s. 63 which informs the public interest determination. The proposed amendments would incorporate the consideration of two of these factors, the significance of adverse effects and mitigation measures, into the two-stage decision-making process. The remaining factors found in s. 63 are largely unchanged by the proposed amendments, aside from a specification that the impacts to be considered are those related to “the effects that are likely to be caused by the carrying out of that project” rather than the whole of “the designated project”.

Notably, the proposed amended wording of the s. 63 factors do not expressly exclude the consideration of adverse effects outside of federal jurisdiction. However, the amendment to the decision-making clauses in ss. 60(1)(b) and 62(b) change the decision made from whether impacts are “in the public interest” to whether they are “justified in the public interest”. The word “justified” is pulling a lot of constitutional weight. The Majority made a point to note that the CEAA 2012 wording “justified in the circumstances” is not constitutionally problematic because the factors under consideration could only be used to justify adverse federal effects, not to magnify these effects and become the basis for a negative decision.[8]  As such, this change is likely to be upheld in any future challenge.

4. The definition of effects within federal jurisdiction

The amendments propose to repeal the definitions of direct or incidental effects and effects within federal jurisdiction and replace them with definitions for direct or incidental adverse effects and adverse effects within federal jurisdiction. They also propose to replace the definition of mitigation measures.

These definition changes are a response to the Majority’s opinion that the current definition of effects within federal jurisdiction is unconstitutional.[9] The Majority found that because the definition is overly broad, the decision-making based on these effects and the prohibition against causing these effects as defined violate the bounds of federal jurisdiction.[10] The problem is that the federal government might designate a project, impose conditions, and permanently halt a project based on effects not in federal jurisdiction.[11]

The proposed amendments would add the phrase “non-negligible adverse change” throughout the definition of what is currently affected within federal jurisdiction. This responds to the Majority’s finding that prohibiting any positive or negative change of any magnitude is overbroad.[12] For example, prohibiting any act or thing that may cause a change to fish or fish habitat is overbroad as it does not link to actual or potential harm to fish.[13]

Most notably, the amended definition of adverse effects within federal jurisdiction does not include “a change to the environment that would occur in a province other than the one where the physical activity or the designated project is being carried out”.[14] This is a significant narrowing of scope. Only pollution-caused impacts on boundary waters, international waters, interprovincial waters, or the marine environment outside of Canada are included. This is likely a response to the Majority’s opinion that including any change to the interprovincial environment as an effect within federal jurisdiction is astonishingly broad.[15]

The Majority opined that “defined interprovincial effects lack specificity as to the type or scale of the “change to the environment” that is said to be a federal effect”.[16] The amendments address to some extent the concern with sweeping, overly broad wording by including “non-negligible” within the definition of each “change” or “impact”. The amendments to the definitions also address the Majority’s concerns about the act’s prohibition under s. 7 being based on positive and negative effects of any magnitude.

However, the amendments may go further than is constitutionally necessary by removing potential federal jurisdiction to assess the impacts of nationally significant greenhouse gas emissions. In determining that the interprovincial effects clause was overbroad, the SCC left the door open for a federal aspect of greenhouse gas emissions. The Majority stated clearly that an issue with this clause is that “Canada has made no attempt to apply the clarified national concern framework set out in the References re GGPPA or to lead any evidence on which to base the recognition of a new and broader matter of national concern”.

Finally, for projects on federal land or federal works or undertakings, the definition of adverse effects within federal jurisdiction now includes “the non-negligible adverse effects of that activity or project”. The meaningful difference here is that this includes all other adverse effects whatsoever, creating in practice a more detailed assessment for projects that the federal government has more comprehensive jurisdiction to regulate. This addresses the Majority’s comments that “[t]he scheme treats all “designated projects” in the same way, regardless of whether Parliament is vested with broad jurisdiction over the activity itself or narrower jurisdiction over the activity’s impacts on federal heads of power.”[18]

As mentioned, the amendments also replace the term direct or incidental effects with direct or incidental adverse effects. Currently, the definition of direct or incidental effects involves all effects that result from a federal exercise of authority, or from projects that involved federal financing. With the proposed amendments, the definition only references non-negligible adverse effects from these projects, which aligns with changes to the rest of the act. The constitutionality of the current definition was not commented on by the Majority.[19] Similarly, the definition of mitigation measures is adjusted to reflect a focus on the new definitions for adverse effects within federal jurisdiction and incidental adverse effects.

The IAA amendments unrelated to constitutional validity

1. Eliminating the requirement for a detailed project description in some cases

The current IAA requires the proponent of a project to provide a notice of how issues listed by the agency will be dealt with and a detailed project description.[20] The amendments would make the requirement to provide a detailed project description discretionary based on whether it is necessary for the screening decision. This may be aimed at providing some reduction in time and resources used by project proponents to comply with the act.

2. Broadening substitutions for impact assessments

An approved substitution under s. 31 of the IAA allows another jurisdiction to conduct an impact assessment instead of conducting an assessment under the IAA. The proposed amendments would change the wording of the provisions dealing with substitutions, carving out a greater role for agreements or arrangements made under s. 114(1)(f) in the substituted process. Specifically, the amendments add the discretion to approve a substitute process together with an agreement or arrangement with a jurisdiction. Similarly, it is proposed that s. 33 – a list of conditions for the Minister to approve a substituted process – be amended to include consideration of an agreement or arrangement.

Additionally, amendments to s. 43 would allow the Minister to enter into an agreement or arrangement with a jurisdiction and the Canadian Energy Regulator or Canadian Nuclear Safety Commission when referring the assessments of projects related to the acts they administer to a review panel.

3. Removing discretion to extend time limits indefinitely

Under the current IAA, the Minister can extend the 300-day time limit from posting the notice of commencement to submit a finalized report to the Minister, the 600-day time limit for a review panel to do the same, and the 30 or 90-day time limit from when the report is posted for the Minister to issue a decision statement a single time for a maximum amount of time.[21] However, the Governor in Council can further extend this extension any number of times for any reason. The proposed amendments would limit the Cabinet’s extension power to a single extension of any necessary length for specified purposes.

Conclusions

The proposed amendments directly address each of the constitutional issues raised by the Majority in its reference opinion. The amendments are careful to ensure only federal aspects of activities that are “primarily regulated through the provincial legislatures’ power over local works and undertakings or natural resources” are addressed.[22] However, despite attempting surgical cuts, if amended as proposed the Impact Assessment Act will miss an opportunity to address a national dimension of greenhouse gas emissions, a pressing issue practically and an outstanding legal question.

Additionally, the amended scheme attempts to place a greater focus on predictability and efficiency for project proponents and greater provincial involvement in federal project assessments. The effects of these additional provisions will become known as the government applies the amended act, should it pass into law.

COVER PHOTO – Supreme Court of Canada by Dave Sutherland on flickr.com CC BY-NC-SA 2.0 DEED

[1] Reference re Impact Assessment Act, 2023 SCC 23 at para 215 [IAA Reference].

[2] See IAA Reference at para 6.

[3] IAA Reference at para 147.

[4] IAA Reference at para 154.

[5] IAA Reference at para 150.

[6] IAA Reference at paras 169, 176.

[7] IAA Reference at paras 166, 168, 169.

[8] IAA Reference at para 175.

[9] IAA Reference at paras 179-203.

[10] IAA Reference at para 180.

[11] IAA Reference at para 182.

[12] IAA Reference at para 193.

[13] IAA Reference at para 195.

[14] Impact Assessment Act, SC 2019, c 28, s 1, s 2(b)(ii) [IAA].

[15] IAA Reference at para 183.

[16] IAA Reference at para 186.

[17] IAA Reference at para 189.

[18] IAA Reference at para 132.

[19] IAA Reference at para 139.

[20] IAA, s 15.

[21] IAA, ss 28, 37, 65.

[22] IAA Reference at para 132.

THANKS FOR YOUR SUPPORT

Your support is vital for stronger environmental legislation. As Alberta’s leading environmental charity, the Environmental Law Centre has served our community for over 40 years, providing objective guidance on crucial legislative changes. Your contribution helps protect our environment for future generations. Support the ELC today.