Canada is set to make changes to an existing environmental law that has come under scrutiny from the Supreme Court, with the federal government insisting its Impact Assessment Act of 2019 is still valid despite a court ruling.
The Supreme Court of Canada ruled on 13 October that while Parliament has the power to legislate on environmental issues, the provinces and territories have the upper hand in the approval process for projects because, under the Constitution, ownership of non-renewable natural resources rests with them.
The federal government would be “overstepping its constitutional authority” if it stood in the way of approving projects that fall under provincial jurisdiction, the court said in its ruling.
“We developed the IAA to create a better set of rules to respect Indigenous rights and we will now take this back to Parliament to quickly improve the legislation,” Environment Minister Steven Guilbeault told reporters in a webcast late October 13.
Natural Resources Minister Jonathan Wilkinson made similar comments on the same webcast, adding: “The court has confirmed that the federal government has the authority to legislate on environmental matters that are areas of shared jurisdiction with the provinces, and we will be bringing forward the necessary amendments to the act to comply with the court’s decision.”
Wilkinson did not provide a timeline for when the federal government would make the changes, nor what the changes would entail.
Given that the Liberal Party, which is currently in power in Canada, is a minority government, there are doubts as to whether it will be able to get the changes to the IAA Act through Parliament.
“The changes can be done in a relatively surgical way,” Wilkinson said, without elaborating. “We’re going to make the project assessment and approval process more thoughtful and more efficient.”
As of May 2023, there are 495 major projects in various stages of development in Canada, including critical minerals and energy projects with a total capital value of C$572 billion ($420 billion), Wilkinson said, noting that “some of these are at the environmental assessment stage and some are at the pre-approval stage”.
The federal government will continue to use the IAA Act to approve projects in the pipeline, which Guilbeault said “remains in place” and which Ottawa plans to implement in a “spirit of cooperation” with the provinces and territories.
“We will make adjustments as suggested by the Supreme Court and there are various ways forward, including new legislation,” Guilbeault said, without giving details.
Alberta ready to approve projects
“The Supreme Court decision has provided an opportunity to restore investor confidence that has been challenged by the IAA,” Alberta Premier Danielle Smith told reporters late October 13.
Alberta is open for business and the province will be asking “those who have been delayed in getting their projects approved to start their applications now because we are going to approve them [without federal interference]. We have the constitutional authority to do this and we will move full steam ahead,” Smith said.
The ruling won’t immediately translate into applications, but it’s a significant win for the province and will result in several oil and gas producers looking favourably at expanding existing capacity or starting new projects, Greg Stringham, a former vice-president of markets for the Canadian Association of Petroleum Producers, said separately on Oct. 16.
In the oil sands sector, Suncor Energy is widely expected to move forward with its base mine project, while other producers such as Cenovus, Canadian Natural Resources and Imperial Oil will move forward with their bite-sized projects of 30,000 b/d to 45,000 b/d each, Vijay Muralidharan, director of R-Cube Economic Consulting, said Oct. 16.
“We have almost no natural gas projects in the queue for approval in Alberta, and that’s a direct result of the federal government interfering in the market and creating uncertainty about whether projects will go ahead,” Premier Smith said, noting: “That is now going to change.”