SCC Rules Federal Impact Assessment Act's "Designated Projects" Component Is Unconstitutional

On October 13, 2022, the Supreme Court of Canada (SCC) issued its decision in Reference re Impact Assessment Act. The majority of the SCC determined that the federal Impact Assessment Act (IAA) and associated Physical Activities Regulations (Regulations) are unconstitutional in part. The decision provides an important clarification to the federal environmental regulatory landscape and further emphasizes the difficulty of allocating jurisdiction over environmental issues to one level of government or the other under Canada's Constitution.

Background

The IAA was introduced in February 2018 and provides for the assessment of environmental, social, economic, cultural, and heritage impacts of certain physical activities carried out in and outside Canada. The range of physical activities includes "designated projects" as listed in the Regulations. Under the IAA, the types of construction, development, business, commerce and other intra-provincial activities that are listed in the