EDMONTON — The Alberta Court of Appeal has found that the federal government’s amended Impact Assessment Act remains unconstitutional in most applications, renewing the dispute between Alberta and Ottawa over their authority to assess major projects in the province.In an opinion released Friday, the court’s 4-1 majority found the IAA’s “designated projects” scheme and accompanying regulations unconstitutional, except when they apply to primarily federal undertakings.The amended scheme allows the federal government to assess proposed projects, such as pipelines, mines and ports, for environmental, economic, health and social effects that may have “adverse effects within federal jurisdiction.”.Alberta’s government challenged the original IAA in 2019, arguing that it gave Ottawa a veto over projects within provincial jurisdiction, including natural resource development. The Supreme Court of Canada later found most of the designated-projects scheme unconstitutional because it did not sufficiently focus on effects within federal jurisdiction. The Court upheld a separate part of the Act covering certain federal projects.Ottawa amended the Act in 2024, including by adding “adverse” to the definition of effects within federal jurisdiction. Alberta challenged the revised Act and asked the Court of Appeal to weigh in.The court majority said on Friday that, although the federal government narrowed the definition, it did not address all of the court’s concerns about federal overreach into provincial jurisdiction. It also said that, under the IAA, when the federal government has a connection to a project, it may still review the entire project, rather than only the aspects within federal jurisdiction.The court also found that the IAA’s provisions on impacts on Indigenous peoples exceeded federal jurisdiction, saying that the Crown’s obligations do not override the constitutional division of powers..“Ottawa’s attempt to sidestep the Constitution has been defeated once again,” said Christine Van Geyn, interim executive director of the Canadian Constitution Foundation.“For the second time, the courts have rejected the federal government’s attempt to claim powers that belong to the provinces. This is a major victory for Canadian federalism and a powerful affirmation of the constitutional limits on government power.”Friday’s opinion follows an April agreement between Alberta and Ottawa aimed at reducing duplication in project assessments. Under the agreement, Canada will generally rely on Alberta’s assessment process for projects primarily within provincial jurisdiction when Alberta can address relevant federal effects.The opinion finds the designated-projects scheme unconstitutional in most applications, but does not invalidate the entire Act. Its practical effects will depend on how it is implemented and whether the courts proceed further.
