Supreme Court Finds Federal Impact Assessment Act Unconstitutional

Introduction

On October 13, 2023, the Supreme Court of Canada (SCC) issued its highly anticipated decision¹ (the Decision) on the constitutionality of the federal Impact Assessment Act² (IAA) and Physical Activities Regulations³ (Regulations).

A majority of the SCC held that the IAA was "essentially two schemes in one",⁴ and that although "a discrete portion of the scheme"⁵ related to the regulation of "activities on federal lands or outside of Canada" was constitutional (the Federal Projects Scheme),⁶ the balance of the Act related to the regulation of designated projects "plainly overstepped [Parliament's] legislative competence" (the Designated Projects Scheme).⁷

The Decision represents a major victory for Alberta and several other provinces who, from the IAA's inception, argued that it impermissibly intruded into provincial jurisdiction and introduced additional delays and uncertainty into Canada's regulatory approval process.