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Environment (Fed) - Impact Assessment Act (2)

. Sierra Club Canada Foundation v. Canada (Environment and Climate Change)

In Sierra Club Canada Foundation v. Canada (Environment and Climate Change) (Fed CA, 2024) the Federal Court of Appeal dismissed an appeal of two JRs, one which "challenged the validity of a report resulting from a regional assessment of offshore oil and gas exploratory drilling, conducted under the Impact Assessment Act" and the other to "quash a regulation made under the Act that exempts certain exploratory drilling activities from a number of impact assessment requirements".

Here, the court summarizes the recent constitutional division-of-powers IAA decision:
[2] After our Court heard this appeal, the Supreme Court of Canada released its decision on the constitutionality of the Act: Reference re Impact Assessment Act, 2023 SCC 23 [IAA Reference]. The Supreme Court opined that the federal impact assessment scheme, consisting of the Act and its accompanying Physical Activities Regulations, S.O.R./2019-285 (Activities Regs), is unconstitutional in part.

....

(2) The IAA Reference

[34] In the IAA Reference, the Supreme Court was asked to determine the constitutional validity of the Act and the Activities Regs. The Court held that the entire Act, except sections 81–91, is ultra vires Parliament and therefore invalid; consequently, the Activities Regs are also invalid. The Court conducted a division of powers analysis to reach this conclusion. This analysis has two steps: characterization and classification.

[35] First, at the characterization step, the Court considered the purpose and effects of the Act to identify its pith and substance. The Court concluded that the Act contains two distinct schemes: IAA Reference at para. 109. The first is a "“designated projects”" scheme, which assesses and regulates designated projects to mitigate or prevent their potential adverse environmental, health, social, and economic impacts. The second scheme, in sections 81–91, directs how federal authorities assess the significant adverse environmental effects of projects that they carry out or finance on federal lands or outside Canada.

[36] Second, at the classification step, the Court considered which head of power the Act’s pith and substance relates to. The second scheme (sections 81–91) was upheld for three reasons: (1) its constitutionality was unchallenged, (2) it resembles the legislation the Supreme Court upheld in Friends of the Oldman River Society v. Canada (Minister of Transport), 1992 CanLII 110 (SCC), [1992] 1 SCR 3 [Oldman River], and (3) it is severable from the rest of the Act: IAA Reference at paras. 207–211. However, the Supreme Court determined that the designated projects scheme, which comprises the balance of the Act, is unconstitutional. Two reasons prohibited the designated projects scheme from being classified under a federal head of power: IAA Reference at paras. 131–139. Firstly, truly federal effects do not drive the scheme’s decision-making functions: IAA Reference at paras. 141–178. That is, decision makers could blend their assessment of adverse federal effects with other adverse effects that are not federal. Secondly, decision-making is driven by considerations labeled "“effects within federal jurisdiction”". Despite this label, these considerations far exceed federal jurisdiction: IAA Reference at paras. 179–203. For these reasons, the Supreme Court ruled that the Act—with the exception of sections 81 to 91—and the Activities Regs exceeded Parliament’s jurisdiction.
. Sierra Club Canada Foundation v. Canada (Environment and Climate Change)

In Sierra Club Canada Foundation v. Canada (Environment and Climate Change) (Fed CA, 2024) the Federal Court of Appeal dismissed an appeal of two JRs, one which "challenged the validity of a report resulting from a regional assessment of offshore oil and gas exploratory drilling, conducted under the Impact Assessment Act" and the other to "quash a regulation made under the Act that exempts certain exploratory drilling activities from a number of impact assessment requirements".

Here the court reviews the statutory basis of these proceedings, the Impact Assessment Act - which has had several provisions recently declared unconstitutional:
[2] After our Court heard this appeal, the Supreme Court of Canada released its decision on the constitutionality of the Act: Reference re Impact Assessment Act, 2023 SCC 23 [IAA Reference]. The Supreme Court opined that the federal impact assessment scheme, consisting of the Act and its accompanying Physical Activities Regulations, S.O.R./2019-285 (Activities Regs), is unconstitutional in part.

....

[5] The Act and the Activities Regs form part of a regulatory scheme for assessing and safeguarding against the adverse effects of physical activities on the environment, or on health, social or economic conditions and their ensuing consequences. Other stated purposes of this scheme include (1) fostering sustainability; (2) ensuring respect for the rights of Indigenous peoples; (3) establishing a fair, predictable, and efficient impact assessment process that creates opportunities for sustainable economic development; (4) ensuring that decisions are based on science, Indigenous knowledge, and other sources of evidence; and (5) assessing cumulative effects within a region: see Preamble, section 6.

(1) Designated Projects

[6] One way of safeguarding against the adverse effects of physical activities is the identification of "“designated projects”" either in the Activities Regs or in ministerial orders: see section 2, subsection 9(1), and paragraph 109(b). If a proponent wishes to carry out a designated project, but the project may cause one of the effects listed under subsection 7(1), a project-specific impact assessment may be required: subsections 7(1) and (3). Offshore exploratory drilling is one type of designated project listed in the Activities Regs: section 2 of the Activities Regs and section 34 of the Activities Regs’ Schedule. The impact assessment process for designated projects contains three main phases: the planning phase, the impact assessment phase, and the decision-making phase. I will briefly explain each phase.

(a) Planning Phase

[7] After the proponent of a designated project has provided the required information to the Impact Assessment Agency of Canada (Agency), the Agency decides whether the project requires an impact assessment: sections 10–16. An affirmative decision triggers the impact assessment process: IAA Reference at paras. 38–41.
(b) Impact Assessment Phase

[8] Either the Agency or a review panel carries on the assessment. The assessment considers the proposed project’s potential environmental, health, social, and economic impacts, including the project’s benefits: sections 18, 22, 41, 42. The Agency or review panel uses the gathered information to develop an impact assessment report: sections 28, 51; IAA Reference at paras. 42–45.

(c) Decision-Making Phase

[9] The decision maker can be either the Minister of the Environment (Minister) or the Governor in Council (Governor). The Governor becomes the decision maker when a review panel conducts the assessment or when the Minister refers the decision to the Governor: sections 60–62. The decision maker, after considering the impact assessment report, determines whether "“the adverse effects within federal jurisdiction—and the adverse direct or incidental effects—that are indicated in the report are […] in the public interest”": paragraphs 60(1)(a) and (b). If so, the Minister establishes conditions that he considers appropriate with which the proponent of the designated project must comply: section 64; IAA Reference at para. 46.

(2) Regional Assessment Mechanism

[10] In the case of multiple designated projects that are or will possibly be carried out in the same area, the Act provides for a regional assessment mechanism that may result in these projects being exempted from project-specific impact assessments. This regional assessment mechanism, like the scheme governing designated projects, contains three phases: planning, assessment, and decision-making.

(a) Planning Phase

[11] Sections 92 and 93 allow the Minister, alone or together with the government of a province, to appoint a committee or ask the Agency to conduct a regional assessment. The Minister must establish the committee’s terms of reference and appoint one or more persons as members of the committee: subsection 96(1).

(b) Assessment Phase

[12] Once a committee is appointed, the following rules are relevant to the conduct of the regional assessment:
. The committee must take into account any scientific information and Indigenous knowledge provided with respect to the assessment (subsection 97(2));

. The committee must ensure that the information it uses when conducting the assessment is made available to the public (section 98);

. The committee must ensure that the public is provided with an opportunity to participate meaningfully in the assessment (section 99); and

. Upon completing the assessment, the Committee must provide a report to the Minister. The report must demonstrate how the Indigenous knowledge provided was taken into account and used in the regional assessment (section 102).
(c) Decision-Making Phase

[13] After considering a regional assessment, the Minister may make a regulation to exempt physical activities in a specified area from undergoing project-specific assessments if those projects meet the conditions prescribed in the regulation: paragraph 112(1)(a.2), subsection 112(2), and section 112.1 of the Act.

[14] The Minister opted for this regional assessment mechanism in the case at bar, which involves offshore exploratory drilling activities in a defined area east of Newfoundland and Labrador (Study Area).



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Last modified: 13-05-24
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