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Environment (Fed) - Impact Assessment Act (IAA)


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Part 2


. Reference re Impact Assessment Act

In Reference re Impact Assessment Act (SCC, 2023) the Supreme Court of Canada considered (and largely allowed) a constitutional division-of-powers challenge to the federal Impact Assessment Act (IAA).

In these quotes, the court reviews the 'surviving' parts of the IAA regime - ie. the 'non-designated project on federal lands or outside Canada' aspect:
[32] ... Sections 81 to 91 of the IAA, however, establish a secondary scheme covering activities on federal lands or outside Canada that are not designated as “designated projects”.

....

B. Sections 81 to 91: Non-Designated Projects on Federal Lands or Outside Canada

[47] As discussed, the CEAA 2012’s secondary scheme for projects on federal lands or outside Canada has been retained in the IAA, with some modifications (ss. 81 to 91; Olszynski, at p. 473; Northey, at pp. 27-28; J. Kneen, “Impact Assessment for Projects on Federal Lands and Outside Canada: The ‘Federal Projects’ Process”, in M. Doelle and A. J. Sinclair, eds., The Next Generation of Impact Assessment: A Critical Review of the Canadian Impact Assessment Act (2021), 388, at pp. 391-92; see also CEAA 2012, ss. 66 to 72).

[48] The assessment process set forth in ss. 81 to 91 is materially different from that contained in the balance of the IAA. The most significant difference is that the ss. 81 to 91 regime focuses on a narrow set of projects. A “project” under this portion of the scheme is defined as follows in s. 81:
project means

(a) a physical activity that is carried out on federal lands or outside Canada in relation to a physical work and that is not a designated project or a physical activity designated by regulations made under paragraph 112(1)(a.2); and

(b) a physical activity that is designated under section 87 or that is part of a class of physical activities that is designated under that section.


[49] The second major difference is that ss. 81 to 91 do not dictate an “impact assessment” process but rather require the federal authority that carries out or finances the project to decide if the project is likely to cause significant adverse environmental effects (ss. 84 to 89). This retains the CEAA 2012’s focus on significant adverse effects. By contrast, the “designated projects” portion of the scheme has done away with this significance threshold, though the significance of adverse effects remains a consideration in the assessment and decision-making phases (ss. 59(2) and 60(1)). If the non-designated project on federal lands or outside Canada is found to be likely to cause significant adverse environmental effects, it must then be determined whether these effects are justified in the circumstances (s. 90).
. Reference re Impact Assessment Act

In Reference re Impact Assessment Act (SCC, 2023) the Supreme Court of Canada considered (and largely allowed) a constitutional division-of-powers challenge to the federal Impact Assessment Act.

In these quotes the court reviews the legal history of Canadian federal environmental assessment law:
II. The Evolution of Federal Environmental Assessment

A. The Nature and Purpose of Environmental Assessment

[9] For decades, both the federal and provincial governments have engaged in environmental assessment. Canada’s first environmental assessments were carried out in the 1970s, and by the 1990s, most Canadian jurisdictions had enacted mandatory environmental assessment legislation (M. Doelle and C. Tollefson, Environmental Law: Cases and Materials (3rd ed. 2019), at p. 593). Before I canvass the evolution of Canadian legislation in this area, it will be useful to consider the nature and purpose of environmental assessment.

[10] In Oldman River, this Court described environmental assessment as “a planning tool that is . . . an integral component of sound decision-making” (p. 71). The basic idea of environmental assessment is that “certain proposed activities should be scrutinized in advance from the perspective of their possible environmental consequences” (J. Benidickson, Environmental Law (5th ed. 2019), at p. 257). Accordingly, environmental assessment processes are prospective in nature; they “seek to anticipate, prevent or reduce environmental impacts of proposed new activities rather than try to manage the impacts of existing activities” (Doelle and Tollefson, at p. 593; see also O. P. Dwivedi et al., Sustainable Development and Canada: National & International Perspectives (2001), at p. 157).

[11] As many of the interveners in this appeal highlighted, the environment is of concern not only to the federal government but also to the provincial governments and to communities from coast to coast. There exists a great diversity of provincial environmental assessment legislation across the country. At the federal level, environmental assessment legislation has evolved substantially over the last four decades. I turn now to this evolution.

B. A History of Federal Environmental Assessment

[12] As a prelude to evaluating the constitutional validity of the scheme, it will be helpful to situate it within the broader history of federal environmental assessment frameworks. In the sections that follow, I canvass the evolution of federal environmental assessment since the 1980s. Two key trends emerge from this discussion.

[13] First, over time, the federal environmental assessment process has undergone a dramatic shift from employing a decision-based trigger to employing an effects- or project-based trigger. The first iterations of the process required an environmental assessment when the federal government had a decision-making responsibility in respect of a particular activity. This responsibility arose under separate federal legislation, such as provisions of the Fisheries Act, R.S.C. 1985, c. F-14, or Navigable Waters Act, R.S.C. 1985, c. N-22, related to the granting of permits. In contrast, more recent iterations of the environmental assessment process have applied on the basis of the types of projects involved or the types of effects these projects may cause.

[14] The second key trend is evident from the title of the impugned statute: Impact Assessment Act. Whereas previous federal enactments focused on environmental effects specifically, the current scheme focuses on “impacts” of various kinds — including but not limited to environmental impacts. Although the “environment” was already understood broadly under previous schemes, this recalibrated focus makes it clear that social, health and economic impacts are also included in the assessment process.

[15] The federal environmental assessment process traces its roots back to 1973, when the federal Cabinet approved a recommendation for an Environmental Assessment and Review Process that was to apply to “all federal development proposals” (Dwivedi et al., at p. 157). Then, in 1984, the federal government issued the Environmental Assessment and Review Process Guidelines Order, SOR/84-467 (“Guidelines Order”), through an order in council, to set out and clarify roles, responsibilities and procedures under the Environmental Assessment and Review Process (Dwivedi et al., at p. 158). I will begin my review of the federal assessment schemes with this Guidelines Order.

(1) The 1984 Guidelines Order

[16] The goal of the Guidelines Order was to ensure that the environmental effects of all proposals for which the federal government had a decision-making responsibility were considered fully and as early in the planning process as possible (J. B. Hanebury, “Environmental Impact Assessment in the Canadian Federal System” (1991), 36 McGill L.J. 962, at p. 969). The Guidelines Order applied to any proposed “initiative, undertaking or activity for which the Government of Canada has a decision making responsibility” (s. 2 “proposal”).

[17] Under the Guidelines Order’s approach, a federal department would conduct an initial assessment of a proposal for which it was the decision-making authority. If the department determined that the project was likely to have significant environmental effects, then it would refer the project to the Minister of the Environment, who in turn would request an independent assessment from the Federal Environmental Assessment and Review Office. That office would establish a panel, which would ultimately submit an advisory report (Dwivedi et al., at p. 158; see also Federal Environmental Assessment Review Office, The Federal Environmental Assessment and Review Process (1987), at pp. 2‑4).

[18] While there was initially some debate as to the binding force and constitutional validity of the Guidelines Order, this Court held in Oldman River that it was mandatory in nature and intra vires Parliament. Justice La Forest, writing for the Court on the vires issue, interpreted the Guidelines Order as applying where the federal government has “an affirmative regulatory duty pursuant to an Act of Parliament which relates to the proposed initiative, undertaking or activity” (p. 47). He reasoned that “[i]t cannot have been intended that the Guidelines Order would be invoked every time there [was] some potential environmental effect on a matter of federal jurisdiction” (p. 47). Rather, the Guidelines Order “has merely added to the matters that federal decision makers should consider” (p. 71).

(2) Canadian Environmental Assessment Act (1992)

[19] The Canadian Environmental Assessment Act, S.C. 1992, c. 37 (“CEAA 1992”), was enacted in 1992 and came into force in 1994 and 1995. Like the Guidelines Order, the operation of the CEAA 1992 was triggered by exercises of federal decision-making responsibility, including where the federal government proposed a project, where it provided financial assistance to a project, where the project involved federal lands, or where the federal government issued a permit or authorization for a project (s. 5(1)).

[20] Although there were similarities between the Guidelines Order and the CEAA 1992, the latter nonetheless introduced major changes to the federal environmental assessment regime. A key innovation of the CEAA 1992 was that the bounds and steps of the federal environmental assessment regime were now set out in legislation. Placing the federal scheme on statutory footing made the environmental assessment process “less susceptible to interference by government without the approval of Parliament” (Doelle and Tollefson, at p. 597; see also R. B. Gibson, “The Major Deficiencies Remain: A Review of the Provisions and Limitations of Bill C-19, an Act to Amend the Canadian Environmental Assessment Act” (2001), 11 J.E.L.P. 83, at p. 85).

[21] The scope of environmental assessment under the CEAA 1992 was broad. The CEAA 1992 defined “environmental effect” as including “any change that the project may cause in the environment” as well as any health and socioeconomic effects of such a change (s. 2(1)). Assessments considered a variety of factors, including comments from the public, mitigation measures, the purpose of the project and alternative ways of carrying out the project (s. 16). These assessments could take one of four forms: screening, comprehensive study, panel review and mediation (s. 14; see also A. Koehl, “EA and Climate Change Mitigation” (2010), 21 J.E.L.P. 181, at p. 185). Projects that did not require a specific federal decision could be referred to a mediator or review panel if the Minister of the Environment was of the opinion that the project might cause significant adverse effects in another province, outside of Canada or on federal lands (ss. 46 to 48).

(3) Canadian Environmental Assessment Act, 2012

[22] The CEAA 1992 was repealed and replaced in 2012 as part of omnibus budget legislation (Jobs, Growth and Long-term Prosperity Act, S.C. 2012, c. 19 (assented to on June 29, 2012)). In at least five respects, the Canadian Environmental Assessment Act, 2012, S.C. 2012, c. 19, s. 52 (“CEAA 2012”), represented the next generation of federal environmental assessment.

[23] First, the CEAA 2012 introduced a new triggering process that dictated when that statute applied (M. Doelle, “CEAA 2012: The End Of Federal EA As We Know It?” (2012), 24 J.E.L.P. 1, at p. 3). The CEAA 2012 was the first federal assessment scheme that involved a project-based approach. It applied to projects that were designated by regulations or ministerial order (ss. 2(1) “designated project”, 14(2) and 84(a); Regulations Designating Physical Activities, SOR/2012-147). This project-based scheme created an “out unless included” model; only designated projects were subject to the CEAA 2012, and all other projects were excluded.

[24] Second, the CEAA 2012 granted the Canadian Environmental Assessment Agency broad discretion to screen designated projects for an assessment (s. 10). As a result, not all designated projects were automatically subject to an assessment. Indeed, far fewer environmental assessments were conducted under the CEAA 2012 than under the former scheme (Doelle and Tollefson, at pp. 621-22; R. B. Gibson, “In full retreat: the Canadian government’s new environmental assessment law undoes decades of progress” (2012), 30 Impact Assess. and Proj. Apprais. 179, at pp. 181-82).

[25] Third, the CEAA 2012 significantly narrowed the scope of federal environmental assessments. The CEAA 2012 limited the definition of “environmental effects” to a small number of environmental components listed in s. 5. Some commentators have written that this was perhaps the most fundamental change to the federal environmental assessment process (Doelle, at p. 11; Gibson (2012), at p. 182).

[26] Fourth, the CEAA 2012 reinvented the decision-making phase of the environmental assessment process. Following the assessment, the decision maker (typically the Minister of the Environment, the National Energy Board or the Canadian Nuclear Safety Commission) would decide whether the project was likely to cause significant adverse environmental effects (s. 52(1)). If it was, then the matter would be referred to the Governor in Council to decide whether the effects were justified in the circumstances (s. 52(2) to (4)). Conditions could be imposed if the project was not likely to cause significant adverse environmental effects or if the significant adverse environmental effects it was likely to cause were justified in the circumstances (s. 53). Section 52(1) and (4), which grant the authority to make the decisions, did not enumerate the factors that could or had to be considered in the exercise of that authority.

[27] Finally, the CEAA 2012 contained a secondary regime for projects carried out on federal lands or outside Canada (ss. 66 to 72; M. Z. Olszynski, “Impact Assessment”, in W. A. Tilleman et al., eds., Environmental Law and Policy (4th ed. 2020), 453, at p. 473). The provisions in question did not set out a formal assessment process. Rather, the relevant federal authorities had to be satisfied that no significant adverse environmental effects were likely or, if they were likely, that they were justified in the circumstances. This process harkened back to the Guidelines Order and the CEAA 1992, which similarly required federal decision makers to consider adverse environmental effects in discharging their responsibilities in respect of certain activities.

[28] Many of the significant innovations introduced by the CEAA 2012 have been retained in the impugned statute. I note, as did the court below, that the provinces did not challenge the constitutionality of the CEAA 2012, and the only challenge to its constitutionality was addressed briefly and in the alternative (2022 ABCA 165, 470 D.L.R. (4th) 1, at para. 93; R.F., at para. 45; but see Taseko Mines Limited v. Canada (Environment), 2017 FC 1100, 15 C.E.L.R. (4th) 53, at para. 6).

(4) IAA

[29] The IAA was the result of a four-year review of the federal environmental assessment process. The federal government established the Expert Panel for the Review of Environmental Assessment Processes, which recommended a major overhaul of the CEAA 2012 (Building Common Ground: A New Vision for Impact Assessment in Canada (2017), at pp. 2-7; Olszynski, at p. 468; see also Natural Resources Canada, Environmental and Regulatory Reviews: Discussion Paper (2017) (“2017 Discussion Paper”), at p. 7). Whether the IAA actually reflects the recommendations for reform has, however, been questioned (see, e.g., Olszynski, at p. 469).

[30] The IAA was enacted as Part 1 of An Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act, to amend the Navigation Protection Act and to make consequential amendments to other Acts, S.C. 2019, c. 28, assented to June 21, 2019. The Governor in Council has made regulations under the IAA, including the Regulations at issue in this appeal.
. Mikisew Cree First Nation v. Canadian Environmental Assessment Agency

In Mikisew Cree First Nation v. Canadian Environmental Assessment Agency (Fed CA, 2023) the Federal Court of Appeal considered the nature of environmental assessments, here in relation to a dismissed judicial review of the then federal Minister of Environment and Climate Change declining "to designate an extension of the Horizon Oil Sands Mine (the Horizon Mine) owned by the respondent, Canadian Natural Resources Limited (CNRL), as a reviewable project under subsection 14(2) of the now-repealed Canadian Environmental Assessment Act":
[136] The distinction between potential and likely is not a superficial one in this context. At the heart of this distinction is the fact that environmental assessments are evidence-based processes to identify, predict, and evaluate the likelihood of potential environmental effects of a proposed project, and respond to them: Bow Valley Naturalists Society v. Canada (Minister of Canadian Heritage) (C.A.), 2001 CanLII 22029 (FCA), [2001] 2 FC 461 at para. 17; Greenpeace Canada v. Canada (Attorney General), 2014 FC 463, 242 A.C.W.S. (3d) 842, rev’d (on other grounds) 2015 FCA 186 at paras. 106-107, leave to appeal to SCC refused, 36711 (28 April 2016). The body conducting the environmental assessment is meant to have the expertise, resources available to it, and the processes in place to conduct that analysis. On the basis of the information received as to the likelihood of particular effects, the Minister or GIC ultimately decides whether or not a project subject to a federal environmental assessment can proceed: see ss. 31, 52, 53 of CEAA, 2012. In this way, environmental assessment is a cornerstone for sustainable development. It is “a planning tool that is now generally regarded as an integral component of sound decision-making”: Friends of the Oldman River Society v. Canada (Minister of Transport), 1992 CanLII 110 (SCC), [1992] 1 S.C.R. 3, [1992] S.C.J. No. 1 at 71.
. Prairie Pride Natural Foods Ltd. v. Canada (Attorney General)

In Prairie Pride Natural Foods Ltd. v. Canada (Attorney General) (Fed CA, 2023) the Federal Court of Appeal considered a JR against a administrative monetary penalty (issued under the Agriculture and Agri-Food Administrative Monetary Penalties Act) that had been appealed unsuccessfully to the Canada Agricultural Review Tribunal. In the course of it's analysis the court considered a Regulatory Impact Analysis Statements (RIAS), issued under the authority of the Impact Assessment Act:
[28] With respect to the purpose of subsection 14(3), I have reviewed the Regulatory Impact Analysis Statements (RIAS) concerning the relevant provision, in its current and earlier versions. The original version of subsection 14(3) had no fixed deadline and the RIAS did not discuss the purpose of the provision. Subsection 14(3) was amended in 2016 to provide for a fixed deadline. The relevant RIAS related to a number of amendments, including subsection 14(3), that were made to improve clarity and consistency of the Regulations. Subsection 14(3) was amended again in 2020 with the effect of slightly extending the deadline. The RIAS for this amendment stated that it was for clarity and consistency.

[29] Since the RIAS for the original version does not state the purpose of subsection 14(3), the RIAS’ as a whole may not provide much assistance in determining the purpose of the provision.

[30] I conclude that these considerations concerning the text, context and purpose of subsection 14(3) may impact the Decision and that if they had been considered by the Tribunal, it may have reached a different result. Accordingly, in accordance with the teaching in Vavilov, the Decision is unreasonable insofar as the Tribunal failed to take these considerations into account.
. Canada (Minister of Environment and Climate Change) et al v Ermineskin Cree Nation et al

In Canada (Minister of Environment and Climate Change) et al v Ermineskin Cree Nation et al (Fed CA, 2022) the Federal Court of Appeal reviewed basics of the Impact Assessment Act (IAA):
(1) The Designation Process

[13] The IAA, along with the Physical Activities Regulations, S.O.R./2019-285, create a comprehensive regime where the federal government evaluates the potential for physical activities to cause adverse environmental effects. As with other impact assessment regimes, the IAA is meant to reconcile a "“proponent’s development desires with environmental protection and preservation”" (Friends of the Oldman River Society v. Canada (Minister of Transport), 1992 CanLII 110 (SCC), [1992] 1 S.C.R. 3, 88 D.LR. (4th) 1, at para. 71).

[14] Under subsection 9(1) of the IAA, the Minister can "“designate”" a physical activity to be subject to the IAA, deeming it a "“designated project”". A designated project undergoes an initial assessment of its impacts, environmental and otherwise, and is subject to further federal oversight and approval where appropriate. Once a project is designated, the proponent is prohibited from doing any acts or things connected with carrying out the projects that may have effects on federal jurisdiction until the federal assessment process is completed (IAA, s. 7).

[15] Requests for the Minister to designate a physical activity can be made by an Indigenous nation, a non-governmental organization, a federal authority, another jurisdiction or any member of the public. Upon receiving a designation request, the Impact Assessment Agency of Canada (the Agency) first considers the request, seeks input from those affected including "“potentially affected Indigenous groups”" and various governmental departments with relevant expertise. The Agency then issues a recommendation to the Minister, which is "“informed by science, Indigenous and community knowledge, input from the proponent, and consultations with other jurisdictions, as applicable”" (Appeal Book, Tab 6, pp. 1208-1209, 1215-1216; IAA, ss. 9(2), 9(3)).



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