Alberta political leaders were ecstatic, if not a bit gobsmacked, by the Supreme Court of Canada ruling Friday saying Ottawa’s law for assessing the environmental effect of major projects is largely unconstitutional. It was the settling of a legal question in favour of provincial rights, but also a political boost for those who believe federal rules have gone to far and have dampened enthusiasm for new resource development in the country.
In the name of regulatory clarity, the clock starts ticking now for Ottawa to amend the Impact Assessment Act to put it in line with the Supreme Court’s opinion. While Alberta hailed the ruling as a new era in project development, the federal government suggested that tweaks to the existing legislation will suffice. This all, again, will be confusing to Canadians and outsiders – particularly investors – alike.
In a 5-2 ruling, the Supreme Court said Friday the four-year-old environmental law – at times referred to in Alberta as the “no more pipelines act” – is an exercise in federal overreach. Ottawa, the high court said, has the power to take actions to protect the environment, but still must stay in its lane when it comes to “the enduring division of powers” as laid out in the Constitution.
Even amongst those who wished for it, this Supreme Court outcome wasn’t widely expected. This is the same court that sided with Ottawa two years ago, citing the urgency of climate change as a reason to give the federal government the ability to set a minimum carbon price.
The mood of celebration in Alberta was palpable. Premier Danielle Smith said, “Alberta is once again open for business.” She called on proponents of roads and power plants within the province to submit their project plans. Specifically, the Premier said if Teck Resources Ltd. wants to rethink its 2020 shelving of its Frontier oil sands mine, have at it.
“Start now. Because we’re going to approve them. We have the constitutional authority to do it.”
But Ms. Smith’s interpretation of the ruling is far from Ottawa’s.
In a news conference, federal Environment Minister Steven Guilbeault and Natural Resources Minister Jonathan Wilkinson cautioned that the Supreme Court gave an advisory opinion, and their law is not struck down – adding that the concerns can be dealt with in a “surgical way.” They also emphasized the court upheld the federal government’s jurisdiction over development as it applies to areas such as fisheries, navigable waters, and Indigenous rights – wherever those projects are being assessed.
There’s also the question of what this means for other Alberta-Ottawa energy battles. Ms. Smith said Friday’s ruling strengthens the province’s legal position on other challenges, and the federal government should take a lesson from it.
“We will continue to fight against Ottawa’s unfair overreach that continues with their uninformed and unrealistic electricity regulations, and oil and gas emissions cap,” Ms. Smith told reporters.
In an interview, Mr. Wilkinson said the court is not asking for fundamental changes to the way Ottawa has conducted itself in terms of environmental assessments.
“I don’t think it’s actually going to make any kind of fundamental change in terms of how we thought about this,” he said, adding that he doesn’t believe it introduces “significant uncertainty.”
He also said he’s not completely surprised by the ruling, and he understands that Ms. Smith “wants to take a bit of a victory lap here.”
“But what I would say is it would be far better for all of us if we actually sit down and work with each other.”
Finding common ground on an array of energy and environmental issues will still be difficult. Alberta has long argued that the Impact Assessment Act, along with other federal laws, creates an overly onerous system that gives Ottawa an unfair and detached ability to deny or delay developments, such as a natural gas power plant, or an oil sands project. On the other side, environmental groups and some Indigenous communities have had their voices subsumed by industry’s wishes. They have called on Ottawa to play a greater role in environmental assessment processes, with the belief that the federal government is not as tied to business interests in resource-focused provinces.
Heather Exner-Pirot – director of energy, natural resources and environment at the Macdonald-Laurier Institute, and critic of the federal government’s assessment law – noted a Pierre Poilievre-led Conservative victory in the years ahead could change that calculation for those groups. She said no matter who is in charge, Ottawa needs to be focused not only on what is constitutional, but what is good policy in an era where energy security weighs into decisions alongside climate.
Beyond the significant legal ruling, the Supreme Court reproach on federal overreach could prompt a wider discussion about how important resource development of all types is to Canada.
There is a wide gulf between how Ottawa interprets this Supreme Court ruling and how Alberta views it. That difference of opinion introduces new uncertainties about how development in this country takes place – including questions about who calls the shots in green-lighting projects.
This applies not only to fossil fuel projects that Alberta and some other provinces would like to see go ahead, but also for critical mineral mines that both the federal and provincial governments want to see started. And for that reason, Mr. Guilbeault and Mr. Wilkinson will have to move quickly in the months ahead to make sure their law meets the Supreme Court test.