Christine Van Geyn is the Litigation Director at The Canadian Constitution Foundation.

On March 21 and 22, the Supreme Court of Canada heard the highly-anticipated appeal in the Impact Assessment Act (IAA) Reference. The IAA is a complex piece of federal legislation setting out when and on what terms projects will be subject to federal assessment and oversight. Dubbed the “no more pipelines,” the law has generated considerable angst from western provinces and industry, who fear that it further erodes regulatory certainty, dissuades investment, and runs roughshod over provincial resource jurisdiction.

The hearing was contentious and attracted a broad cross section of perspectives and interest, represented by a near-record 29 interveners, including seven provinces. The Court selected a seven judge panel instead of its standard nine members, as a result of Justice Brown’s leave pending an investigation into a complaint arising out of an altercation at a hotel in Arizona. Justice O’Bonsawin, the most junior member of the court and also the Supreme Court’s first indigenous justice, also sat out of the hearing, apparently to achieve an odd number on the panel and avoid a split. The questions from the bench came fast and furious, with some legal observers wondering if the panel was in some way compensating for their missing colleagues.

While on its surface the case is about natural resource development and environmental assessments, at a deeper level, it raised questions fundamental to Canadian democracy: who gets to make choices on what policy issues? The central federal government or the provinces?  The importance of this case cannot be overstated, particularly since it comes at a critical time in Canada’s federation, where competing regional and political policy visions over the environment and resource development have eroded both confidence and consensus in our constitutional division of powers. Because the “environment” is such all pervasive subject, this case has the potential to significantly alter Canada’s federal structure, and the respective roles of Parliament and the provinces. 

The IAA was controversial from the time when it was first enacted by the Trudeau government in 2019, because of its impacts on the provinces’ ability to develop their own natural resources. Namely, the fact that the law supplants the federal government’s preferences for the provinces preferences, even in areas that should be within exclusive provincial jurisdiction. The Alberta government reacted to the controversial legislation by bringing a constitutional challenge, which was successful at the Court of Appeal in a high profile 2022 decision.

The Majority’s decision in the Alberta Court of Appeal captures the attention of legal observers, the media and the public. It went so far as to say that the IAA took a “wrecking ball” to the constitutional right of citizens of Alberta and Saskatchewan to develop their natural resources. The majority continued that the IAA “is a classic example of legislative creep” and it “constitutes a profound invasion into provincial legislative jurisdiction and provincial proprietary rights” which, if upheld, would result in the “centralization of the governance of Canada to the point this country would no longer be recognized as a real federation.” The majority also expressed concern that the IAA “allows the federal government to pick winners and losers” and is “a licence to systematically expand federal powers under the environmental umbrella.” They also said that it would be discriminatory “to deprive Alberta and Saskatchewan, which together have the vast majority of oil and gas reserves in this country, of their constitutional right to exploit those natural resources.” This was a powerfully worded defence of provincial rights.

In recent months, the Canadian public has grown increasingly interested in issues relating to provincial rights, especially in light of the Alberta government’s moves regarding an “Alberta Sovereignty Act” and the federal government’s Carbon Pricing Scheme recently upheld of the Supreme Court. The Supreme Court also recently heard another case on the division of powers, the Reference Re An Act Respecting First Nations, Inuit, and Metis children, youth and families. The Canadian Constitution Foundation’s video explaining that seemingly esoteric case received over 100,000 views on YouTube.

But the public fascination with the division of powers and federalism should come as no surprise. Upholding the division of powers is not a theoretical issue. It has long reaching practical effects. The division of powers directly impacts the lives of Canadians. Laws outside the scope of federal or provincial jurisdiction are what lawyers call ultra vires, a Latin phrase meaning “beyond the powers.” The IAA is one such law. And if allowed to stand, ultra vires laws alter the basic political, economic, and legal foundation upon which Canadians order their lives. Brett Carlson, legal counsel for the CCF in the IAA Reference, commented in the Canadian Constitution Foundation’s book “Freedom Through Federalism,” “ultra vires laws erode public confidence in Canada’s political institutions, undermine government accountability, and trigger further acts of government overreach. These effects directly and materially impact the relationship that Canadian citizens have with their governments and political institutions.”

To use this case as an example, the IAA would have an impact on the economic well-being of Albertans, as it leaves “almost no aspect of a province’s economy” free from federal intrusion.  This has a “corrosive effect on the economic health and wellbeing” of provincial citizens by “taking a wrecking ball” to “capital investments in projects vital to” provincial economies, to use the Court of Appeal’s words.

Ultimately, this case is not about whether the IAA is good or bad policy. It is about interpreting the division of powers, and what level of government is entitled to legislate in specific policy areas. Defending the rules around “who decides” matters. Allowing the IAA to stand would undermine the benefits of diversity and experimentation that federalism allows to flourish. Ignoring the time-tested principles of federalism in favour of centralized power, to use the words of the Court of Appeal, “rarely works in a geographically large country with a diverse population and divergent regional priorities.”