Canada to amend environmental law, in line with Supreme Court ruling: ministers

Canada will bring about changes to an existing environmental legislation that came under scrutiny by the Supreme Court, with the federal government insisting its Impact Assessment Act of 2019 is still valid despite a court ruling.

The Canadian supreme court ruled on Oct. 13 that although parliament has the powers to legislate on environmental issues, with the ownership of non-renewable natural resources resting with provinces/territories – as per the constitution – the latter had an upper hand in the approval processes of projects.

The federal government would be "overstepping its constitutional competence", if it were to come in the way of approving projects that were in the jurisdictions held by provinces, the court said in its ruling.

"We developed the IAA to come up with a better set of rules to respect indigenous rights and we will now take this back to parliament to quickly improve the legislation," Environment Minister Steven Guilbeault told reporters on a webcast late-Oct. 13.

Natural Resources Minister Jonathan Wilkinson made similar statements on the same webcast, adding: "The court confirmed that the federal government has the authority to legislate in environment matters which are areas of shared responsibility with the provinces and we will be bringing forward the necessary amendments to the act to align with the court's decision."

Wilkinson did not indicate a timeline on when the federal government will bring about the changes and also on what the amendments would include.

Given that the Liberal Party currently in power in Canada is a minority government, there are lingering doubts if it will be able to get the changes to the IAA Act approved in parliament.

"The changes can be dealt with in a relatively surgical way," Wilkinson said without elaborating. "We will make project assessment and approval processes work even more thoughtfully and more efficiently."

As of May 2023, there are 495 major projects in various stages of development in Canada which include critical minerals and energy projects with a combined capital value of C$572 billion ($420 billion), Wilkinson said, noting that "some of these are at the environmental assessment stage and others at the pre-approval level."

For approving projects in the pipeline, the federal government will still go by the IAA Act, which Guilbeault said "continues to be in place" and Ottawa plans to implement in a "spirit of collaboration" with the provinces and territories.

"We will make adjustments as suggested by the supreme court and there are various path forward, including new legislation," Guilbeault said without providing details.

Alberta ready to approve projects

"The supreme court ruling has provided an opportunity to rebuild investor confidence that has been challenged by the IAA," Alberta Premier Danielle Smith said told reporters late-Oct. 13.

Alberta is open for business and province will ask "for those who have faced delays in getting projects approvals to start their applications now as we are going to approve them [without federal government interference]. We have the constitutional authority to do it and we will proceed full-steam ahead," Smith said.

The ruling will not immediately translate into applications, but it's a substantial win for the province and will result in multiple oil and gas producers looking favorably in mounting on the drawing board expansions to existing capacity or taking up new projects, Greg Stringham, a former vice president for markets for the Canadian Association of Petroleum Producers, said separately Oct. 16.

In the oil sands sector, Suncor Energy is widely expected to move forward with its base mine project, while fellow producers like Cenovus, Canadian Natural Resources and Imperial Oil will move ahead with their bite-sized projects each of capacity 30,000 b/d to 45,000 b/d, Vijay Muralidharan, director of R-Cube Economic Consulting, said Oct. 16.

"We have almost zero natural gas projects in the queue for approval in Alberta and that's because of a direct result of the federal government interfering in the market and creating uncertainty on whether projects will go ahead," Premier Smith said, noting: "This will now start changing."