Alberta appeals court rules federal Impact Assessment Act still unconstitutional after Ottawa's revisions

Alberta's Court of Appeal ruled Friday that the federal Impact Assessment Act is still unconstitutional, the second time the province has defeated the legislation in court despite Ottawa's revisions following a 2023 Supreme Court ruling.

The 4-1 decision found that even after changes, the act grants the federal government power to stop projects in provincial jurisdiction if they have even a small impact on federal matters. The court said this violates the Constitution's division of powers.

"While Parliament may have the power to create an impact assessment scheme that complements existing regulation in environmental matters, the [Impact Assessment Act] creates great uncertainty due to the potential for previously unpronounced standards to apply to designated projects," the court wrote. It added that the scheme "might enable the federal government, on the pretext of some narrow ground of federal jurisdiction, to conduct a far-ranging inquiry into matters that are exclusively within provincial jurisdiction."

The act sets out the process to review environmental, economic, health and social effects of proposed projects including ports, mines and pipelines. After the Supreme Court struck down much of the original version in 2023, Ottawa modified it. The Court of Appeal found some changes were not constitutionally problematic but that the law still gave Ottawa overly broad powers.

Specifically, the court said the decision-maker can "regulate the project causing the impacts through imposition of conditions and followup programs, or indefinite prohibitions on entire projects and matters within provincial jurisdiction rather than confining oversight to federal effects caused by the project."

Ontario and Saskatchewan backed Alberta in the case. The ruling arrives as Ottawa and Alberta partner on the Pacific Link pipeline project to the West Coast, which became the first to receive a national interest designation under the Building Canada Act, granted this month.