Court headnote

Reference re Impact Assessment Act
Collection
Supreme Court Judgments
Date
2023-10-13
Neutral citation
2023 SCC 23
Case number
40195
Judges
Wagner, Richard; Karakatsanis, Andromache; Côté, Suzanne; Rowe, Malcolm; Martin, Sheilah; Kasirer, Nicholas; Jamal, Mahmud
On appeal from
Alberta
Subjects
Constitutional law
Notes
Case in Brief SCC Case Information
Decision Content
SUPREME COURT OF CANADA
Citation: Reference re Impact Assessment Act, 2023 SCC 23
Appeal Heard: March 21, 22, 2023 Judgment Rendered: October 13, 2023 Docket: 40195
Between:
Attorney General of Canada Appellant
and
Attorney General of Alberta Respondent
- and -
Attorney General of Ontario, Attorney General of Quebec, Attorney General of New Brunswick, Attorney General of Manitoba, Attorney General of British Columbia, Attorney General of Saskatchewan, Attorney General of Newfoundland and Labrador, Indian Resource Council, File Hills Qu’Appelle Tribal Council, Pasqua First Nation, World Wildlife Fund Canada, Nature Canada, West Coast Environmental Law Association, Canadian Association of Petroleum Producers, Canadian Taxpayers Federation, Athabasca Chipewyan First Nation, Business Council of Alberta, Ecojustice Canada Society, Woodland Cree First Nation, Mikisew Cree First Nation, Hydro-Québec, Canadian Constitution Foundation, Independent Contractors and Businesses Association, Alberta Enterprise Group, Canadian Association of Physicians for the Environment, Advocates for the Rule of Law, Oceans North Conservation Society, Canadian Environmental Law Association, Environmental Defence Canada Inc., MiningWatch Canada Inc., Explorers and Producers Association of Canada, First Nations Major Projects Coalition Society, Centre québécois du droit de l’environnement and Lummi Nation Interveners
Coram: Wagner C.J. and Karakatsanis, Côté, Rowe, Martin, Kasirer and Jamal JJ.
Reasons for Judgment: (paras. 1 to 216)
Wagner C.J. (Côté, Rowe, Martin and Kasirer JJ. concurring)
Joint Reasons Dissenting in Part: (paras. 217 to 361)
Karakatsanis and Jamal JJ.
Note: This document is subject to editorial revision before its reproduction in final form in the Canada Supreme Court Reports.
IN THE MATTER OF a Reference by the Lieutenant Governor in Council to the Court of Appeal of Alberta concerning the constitutionality of the Impact Assessment Act, S.C. 2019, c. 28, s. 1, and of the Physical Activities Regulations, SOR/2019-285
Attorney General of Canada Appellant
v.
Attorney General of Alberta Respondent
and
Attorney General of Ontario,
Attorney General of Quebec,
Attorney General of New Brunswick,
Attorney General of Manitoba,
Attorney General of British Columbia,
Attorney General of Saskatchewan,
Attorney General of Newfoundland and Labrador,
Indian Resource Council,
File Hills Qu’Appelle Tribal Council,
Pasqua First Nation,
World Wildlife Fund Canada,
Nature Canada,
West Coast Environmental Law Association,
Canadian Association of Petroleum Producers,
Canadian Taxpayers Federation,
Athabasca Chipewyan First Nation,
Business Council of Alberta,
Ecojustice Canada Society,
Woodland Cree First Nation,
Mikisew Cree First Nation,
Hydro-Québec,
Canadian Constitution Foundation,
Independent Contractors and Businesses Association,
Alberta Enterprise Group,
Canadian Association of Physicians for the Environment,
Advocates for the Rule of Law,
Oceans North Conservation Society,
Canadian Environmental Law Association,
Environmental Defence Canada Inc.,
MiningWatch Canada Inc.,
Explorers and Producers Association of Canada,
First Nations Major Projects Coalition Society,
Centre québécois du droit de l’environnement and
Lummi Nation Interveners
Indexed as: Reference re Impact Assessment Act
2023 SCC 23
File No.: 40195.
2023: March 21, 22; 2023: October 13.
Present: Wagner C.J. and Karakatsanis, Côté, Rowe, Martin, Kasirer and Jamal JJ.
on appeal from the court of appeal of alberta
Constitutional law — Division of powers — Environmental impact assessment — Federal statute and regulations establishing assessment process for projects potentially having environmental impacts — Whether statute and regulations intra vires Parliament — Constitution Act, 1867, ss. 91, 92 — Impact Assessment Act, S.C. 2019, c. 28, s. 1 — Physical Activities Regulations, SOR/2019‑285.
In 2019, following a review of the existing federal environmental assessment process, Parliament enacted the Impact Assessment Act (“IAA”) and the Governor in Council made the Physical Activities Regulations (“Regulations”) under the IAA. The IAA and the Regulations establish a complex information gathering and regulatory scheme, which is essentially two schemes in one. First, a discrete portion of the scheme — contained in ss. 81 to 91 of the IAA — deals with projects carried out or financed by federal authorities on federal lands or outside Canada. Second, the balance of the scheme — made up of the IAA’s remaining provisions and the Regulations — deals with “designated projects” as defined in the IAA.
The impact assessment process for designated projects can be divided into three main phases: the planning phase, the impact assessment phase and the decision‑making phase. The planning phase focuses on initial information gathering. The proponent of a designated project must provide the Impact Assessment Agency with an initial project description. The Agency then consults with a number of parties, and decides whether the project requires an impact assessment. In the impact assessment phase, the proponent is required to provide the necessary information or studies to the entity conducting the assessment, which will be the Agency or its delegate. This phase culminates in the preparation of an assessment report, which sets out the effects that are likely to be caused by the carrying out of the designated project and indicates those that are adverse “effects within federal jurisdiction” and those that are adverse “direct or incidental effects”, terms defined in s. 2 of the IAA. The assessment report must also take into account numerous mandatory assessment factors listed in s. 22 of the IAA. The mandatory factors include changes to the environment or to health, social or economic conditions and the positive and negative consequences of these changes. Finally, during the decision‑making phase, the decision maker must determine whether the adverse effects within federal jurisdiction and the adverse direct or incidental effects are in the public interest. If the decision maker concludes that the effects in question are in the public interest, the Minister of the Environment must establish any condition that the Minister considers appropriate in relation to those effects.
The assessment process set forth in ss. 81 to 91 focuses on a narrow set of projects: physical activities carried out on federal lands or outside Canada in relation to a physical work that are not designated projects or physical activities designated by regulation, and physical activities designated under s. 87 or that are part of a designated class of physical activities. Sections 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. If so, it must then be determined whether these effects are justified in the circumstances.
Alberta’s Lieutenant Governor in Council referred two questions to the province’s Court of Appeal. They asked whether the IAA was unconstitutional, in whole or in part, as being beyond the legislative authority of Parliament under the Constitution, and whether the Regulations were unconstitutional, in whole or in part, by virtue of purporting to apply to certain activities listed in Schedule 2 that relate to matters entirely within the legislative authority of the provinces under the Constitution. A majority of the Court of Appeal concluded that the IAA and the Regulations are ultra vires Parliament and therefore unconstitutional in their entirety. The Attorney General of Canada appeals as of right to the Court.
Held (Karakatsanis and Jamal JJ. dissenting in part): The appeal should be allowed in part.
Per Wagner C.J. and Côté, Rowe, Martin and Kasirer JJ.: The reference questions should be answered in the affirmative: the federal impact assessment scheme is unconstitutional in part. Although the process set forth in ss. 81‑91 of the IAA is constitutional and can be separated out, the balance of the scheme — that is, the “designated projects” portion — is ultra vires Parliament and thus unconstitutional. The designated projects scheme is ultra vires for two overarching reasons: it is not in pith and substance directed at regulating “effects within federal jurisdiction” as defined in the IAA because these effects do not drive the scheme’s decision‑making functions, and the defined term “effects within federal jurisdiction” does not align with federal legislative jurisdiction. The overbreadth of these effects exacerbates the constitutional frailties of the scheme’s decision‑making functions. Environmental protection remains one of today’s most pressing challenges, and Parliament has the power to enact a scheme of environmental assessment to meet this challenge, but Parliament also has the duty to act within the enduring division of powers framework laid out in the Constitution.
The division of powers analysis has two steps: characterization and classification. At the characterization step, a court must consider the purpose and effects of the challenged law in order to identify its pith and substance. In order to determine a law’s purpose, a court looks to both intrinsic evidence (the text of the law, its preamble, its purpose clause, if it has one, its title and its overall structure) and extrinsic evidence (the context of the law in question, the minutes of parliamentary committees and relevant government publications). In analyzing the effects of the challenged law, a court considers both legal effects (effects that flow directly from the provisions of the statute itself) and practical effects (effects that flow from the application of the statute). Finally, the court must characterize the pith and substance of the challenged law as precisely as possible, capturing the law’s essential character in terms that are as precise as the law will allow. Characterization is distinct from classification, and it is imperative that the characterization and classification analyses be kept distinct. In determining the pith and substance of a law, courts must not refer to the heads of power contained within the Constitution Act, 1867. The characterization step of the analysis must focus exclusively on the pith and substance or dominant characteristic of the law. Only after precisely stating the matter to which the law relates should a court proceed to the classification phase of the analysis and consider specific heads of power.
In addition, the presumption of constitutionality is a cardinal principle of the Court’s division of powers jurisprudence. According to this presumption, every legislative provision is presumed to be intra vires the level of government that enacted it, so a court should approach any question as to its validity on the assumption that it was validly enacted unless the party challenging it demonstrates otherwise. This presumption also functions as a principle of statutory interpretation: it directs a court to assume that a legislative body does not intend to exceed its powers under the Constitution. Therefore, when characterizing a challenged law, a court faced with competing, plausible characterizations should normally choose that one that would support the validity of the law. However, this presumption is not an impermeable shield that protects legislation from constitutional review by courts, nor can they employ the presumption of constitutionality to rewrite legislative text as they see fit in order to bring it into compliance with the Constitution. Courts cannot rely on the presumption of constitutionality to disregard a statute that speaks clearly and is ultra vires its enacting body, and the presumption does not displace the duty of courts to meaningfully review the constitutionality of legislation. Similarly, a court cannot circumvent its duty to meaningfully review the constitutionality of legislation by suggesting that, insofar as an administrative decision maker applies a law unconstitutionally, the application of that law may be judicially reviewed. The constitutional validity of a law and its administrative application are distinct concepts. Where a law is ultra vires and therefore unconstitutional, it cannot be saved by the prospect of administrative judicial review.
After a court characterizes the matter of a law, it must determine the classes of subjects into which the matter falls by reference to the heads of power set out in s. 91 or 92 of the Constitution Act, 1867. If the matter of law is properly classified as falling under a head of power assigned to the adopting level of government, the legislation is intra vires and valid. A law is classified based on its main thrust or dominant characteristic, and its secondary effects are not the focus of the validity analysis. The fact that a valid law incidentally touches on a head of power belonging to the other level of government does not affect its validity.
Classifying environmental legislation presents a challenge because the “environment” is not a head of power under s. 91 or 92 of the Constitution Act, 1867. Environmental management cuts across many different areas of constitutional responsibility. Accordingly, neither level of government has exclusive jurisdiction over the whole of the “environment” or over all “environmental assessment”. Both levels of government can legislate in respect of certain aspects of environmental protection, including certain aspects of the environmental assessment of physical activities. Shared federal and provincial responsibility for environmental impact assessment is neither unusual nor unworkable; rather, it is a central feature of environmental decision making in Canada. This is consistent with the double aspect doctrine, which reflects the idea that the same fact situation can be regulated from different perspectives, one falling within s. 91 and the other falling within s. 92. Nonetheless, the double aspect doctrine must be applied with caution. First, not all fact situations have a double aspect, and each fact situation must be identified with precision. Environmental assessment of physical activities may or may not have a double aspect in relation to a specific project. Second, the fact that environmental assessment of physical activities may have a double aspect — with some elements falling within the legislative authority of each level of government — does not mean that it is an area of concurrent jurisdiction. If a fact situation can be regulated from both a federal perspective and a provincial perspective, it follows that each level of government can only enact laws which, in pith and substance, fall under its respective jurisdiction. The notion that both levels of government may legislate in respect of certain aspects of environmental protection, each pursuant to its own legislative competence, is also consistent with the principle of cooperative federalism. However, while flexibility and cooperation are important to federalism, they cannot override or modify the separation of powers. Courts may not, under the guise of cooperative federalism, erode the constitutional balance inherent in the Canadian federal state.
In the instant case, a careful analysis of the purpose and effects of the IAA and Regulations reveals that the scheme they establish has two distinct components: one dealing with “designated projects” and another addressing projects carried out or financed by federal authorities on federal lands or outside Canada (ss. 81 to 91 of the IAA). The intrinsic and extrinsic evidence reveal that the scheme articulates a broad array of purposes, including protecting the environment and fostering sustainability; satisfying Canada’s environmental obligations; assessing and regulating the broad effects of certain physical activities, such as effects on health, social and economic conditions; facilitating the participation of Indigenous peoples and the public; and establishing an efficient and transparent process. The legal and practical effects, considered together, reveal that the scheme establishes a comprehensive information‑gathering and regulatory process. The pith and substance of the “designated projects” component is to assess and regulate designated projects with a view to mitigating or preventing their potential adverse environmental, health, social and economic impacts. The pith and substance of the component set out in ss. 81 to 91 is to direct the manner in which federal authorities that carry out or finance a project on federal lands or outside Canada assess the significant adverse environmental effects that the project may have.
There is no doubt that Parliament can enact impact assessment legislation that is directed at the federal aspects of projects. The breadth of these “federal aspects” will vary with the circumstances. Where Parliament is vested with jurisdiction to legislate in respect of a particular activity, it has broad discretion to regulate that activity and its effects, but Parliament’s jurisdiction is more restricted where the activity falls outside of its legislative competence. In those cases, it can validly legislate only from the perspective of the federal aspects of the activity. The designated projects scheme treats all “designated projects” in the same way, regardless of whether Parliament is vested with broad jurisdiction over the activity itself or narrower jurisdiction over the activity’s impacts on federal heads of power. And many of the physical activities to which the scheme applies are primarily regulated through the provincial legislatures’ powers over local works and undertakings or natural resources. Parliament can enact impact assessment legislation to regulate these projects from a federal perspective, so long as the regulation of federal aspects represents the dominant characteristic of the law.
The “designated projects” scheme is ultra vires, as its pith and substance exceeds the bounds of federal jurisdiction. This is so for two overarching reasons. First, the “effects within federal jurisdiction” do not drive the scheme’s decision‑making functions. Consequently, the scheme is not in pith and substance directed at regulating these effects. There are four decision‑making junctures embedded in the scheme: (i) the designation of physical activities as “designated projects”; (ii) the screening decision; (iii) the delineation of the scope of the impact assessment and the factors to be considered therein; and (iv) the public interest decision and resulting regulation and oversight. The scheme requires the decision maker to consider a host of factors but does not specify how those factors are to drive the ultimate conclusion. The scheme’s decision‑making mechanism thereby loses its focus on regulating federal impacts. Instead, it grants the decision maker a practically untrammelled power to regulate projects qua projects, regardless of whether Parliament has jurisdiction to regulate a given physical activity in its entirety. In this respect, the screening decision and the public interest decision are constitutionally problematic. The screening decision as to whether an impact assessment is required for a particular project must be rooted in the possibility of adverse federal effects. However, because the decision maker must take into account an open‑ended list of factors, all of seemingly equal importance, only two of them tied to federal jurisdiction, an impact assessment could be required for reasons other than, or not sufficiently tied to, the project’s possible impacts on areas of federal jurisdiction. Similarly, the public interest decision must focus on the project’s federal effects. However, because the mandatory public interest factors are not all confined to federal legislative competence, and because some factors are framed in relation to the assessment of the project as a whole rather than to the adverse “effects within federal jurisdiction”, a determination of whether adverse federal effects are in the public interest is transformed into a determination of whether the project as a whole is in the public interest.
Second, the defined term “effects within federal jurisdiction” does not align with federal legislative jurisdiction under s. 91, but rather, goes far beyond its limits. Its overbreadth manifests itself in two distinct ways. First, the definition of “effects within federal jurisdiction” is central to the scheme’s decision‑making functions. Its overbreadth dilutes the focus at the key decision‑making junctures, shifting it away from federal aspects and encompassing aspects that are within provincial jurisdiction. Second, the defined “effects within federal jurisdiction” result in impermissibly broad prohibitions. Due to the overbreadth of these defined effects, the conduct prohibited by s. 7 of the IAA extends beyond the range of conduct that Parliament can validly regulate pursuant to its assigned heads of power.
The component of the scheme set out in ss. 81 to 91 of the IAA is clearly intra vires Parliament. These provisions have not been challenged as unconstitutional. Furthermore, the process established by these provisions resembles the process upheld by the Court in Friends of the Oldman River Society v. Canada (Minister of Transport), [1992] 1 S.C.R. 3. Though the test for severance in division of powers cases is stringent, ss. 81 to 91 can be separated from the balance of the scheme and upheld as constitutional.
Per Karakatsanis and Jamal JJ. (dissenting in part): The IAA and the Regulations are intra vires in their entirety. The environment, by its very nature, is complex and diffuse. It is not a subject matter assigned to either Parliament or the provinces under the Constitution Act, 1867, but instead cuts across many areas of constitutional responsibility, some federal, some provincial, and all levels of government bear an all‑important duty to use their powers to protect it. This shared responsibility is neither unusual nor unworkable in a federal state such as Canada. Rather, it reflects the Court’s flexible approach to federalism, which recognizes that overlapping powers are unavoidable and intergovernmental cooperation is essential. Legislation must be approached from a posture of respect and presumed good faith on the part of legislatures, interpreted to comply with constitutional limits, and evaluated on the basis that the courts should favour the operation of statutes enacted by both levels of government whenever possible. Courts must presume that the regime will be administered in a constitutionally compliant manner and will not find legislation unconstitutional simply because it could conceivably be misused. Courts must also recognize and respect the constitutional bargain struck with respect to the exclusive catalogue of both federal and provincial powers.
The IAA builds on earlier federal environmental assessment regimes by establishing a multi‑stage process to assess the effects of designated projects and protect against adverse effects in specified areas, unless allowing them would be in the public interest. The IAA contains two distinct schemes: a primary scheme addressing physical activities designated as “designated projects”, which takes up most of the IAA, and a secondary scheme in ss. 81 to 91 that applies to federal projects. There is no dispute that the secondary scheme in ss. 81 to 91 for projects funded by the federal government or carried out either on federal lands or outside Canada is intra vires Parliament.
The IAA’s purpose and its practical and legal effects indicate that the pith and substance of the designated projects scheme is to establish an environmental assessment process to (1) assess the effects of physical activities or major projects on federal lands, Indigenous peoples, fisheries, migratory birds, and lands, air, or waters outside Canada or in provinces other than where a project is located, and (2) determine whether to impose restrictions on the project to safeguard against significant adverse federal effects, unless allowing those effects is in the public interest. This description of the pith and substance is more precise and highlights the critical role of the public interest decision‑making process under the legislation. Based on that characterization, the public interest decision‑making process under the IAA is constitutional, provided that it is anchored in adverse federal effects within Parliament’s legislative jurisdiction over fisheries, navigable waters, Indians and lands reserved for Indians, criminal law, international and interprovincial rivers, and the national concern branch of the peace, order, and good government power.
The intrinsic and extrinsic evidence shows that the purpose of the IAA is to establish a transparent information‑gathering and decision‑making process about whether physical activities or designated projects have adverse federal effects, and if so, whether they should be permitted in the public interest, with or without conditions. The intrinsic evidence suggests that the information‑gathering process and decision‑making function are more specifically directed at whether the project under consideration has any adverse effects within federal jurisdiction and, if so, whether those effects are nonetheless in the public interest. This more precise purpose of the IAA is reflected in the long title of the statute, the text and structure of the legislation, and the IAA’s stated purposes and preamble. Most importantly, the IAA is intended to protect the components of the environment and the health, social and economic conditions that are within the legislative authority of Parliament from adverse effects caused by a designated project. Extrinsic evidence confirms that the IAA’s dominant purpose is to allow well‑informed, transparent decisions as to whether allowing a project’s adverse federal effects is in the public interest.
The IAA’s legal effects support that conclusion. The main legal effects of the IAA are that: (1) projects are designated based on the likelihood they would cause non‑trivial adverse federal effects; (2) the Agency decides whether to assess projects on the same basis; (3) the Agency’s report must identify the adverse federal effects that a project is likely to cause and specify the extent to which those effects are significant; and (4) the ultimate public interest determination and any resulting conditions imposed on the project must be reasonable and proportionate, based on the adverse federal effects, the extent to which they are significant, and whether they can be mitigated. The statutory text, context and purpose, along with the applicable interpretive principles, show that Parliament did not intend to capture de minimis effects. Indeed, the significance threshold for adverse environmental effects permeates every major stage and decision taken under the IAA with respect to designated projects. Moreover, even if interpreting the IAA to capture de minimis effects were a reasonably available interpretation, the presumption of constitutionality demands that it be rejected in favour of a constitutionally‑conforming interpretation. The IAA’s practical effects, including potential delays or the expenditure of resources, may be important policy matters for Parliament, but they are irrelevant for constitutional purposes.
Parliament chose broad language for what constitutes an “effect within federal jurisdiction” under the IAA, but each of the adverse federal effects is properly classified as falling under Parliament’s exclusive legislative jurisdiction. Each of the adverse federal effects anchor federal review and decision making under the IAA legislative scheme and fit within multiple heads of Parliament’s legislative jurisdiction under the Constitution Act, 1867. There are four decision‑making junctures under the IAA: (a) designating physical activities as “designated projects”; (b) the screening decision as to whether a project should proceed to an impact assessment; (c) identifying the scope of the assessment and the factors to be considered; and (d) the public interest decision and resulting regulation and oversight. The adverse federal effects are not overbroad or misaligned with federal legislative jurisdiction.
At the first juncture, the designation process is driven by the potential for a physical activity to cause adverse federal effects. The designation process appropriately reflects the precautionary principle and the need to gather information at an early stage of an environmental impact assessment process, to properly inform federal decision making about whether a designated project may cause adverse federal effects.
Once a project is designated under the Regulations or by ministerial order, the project moves to the second juncture, at which the Agency decides whether to conduct an impact assessment of the designated project based on mandatory factors in s. 16(2) of the IAA. This screening decision is anchored in the possibility that the designated project will cause adverse federal effects. Each of the discretionary factors in ss. 16(2)(a), (b), and (c) is rooted in adverse federal effects, and s. 16(2)(d) may also reflect adverse federal effects, depending on the comments of the public or the Indigenous group consulted. Section 16(2)(e) is largely irrelevant for most provincially regulated projects, unless they occur on federal lands or relate to a federal government policy, program, or plan, in which case there is a clear nexus to federal jurisdiction. Section 16(2)(f) applies only where another jurisdiction conducts an assessment, in which case it is appropriate for the Agency to consider what the other jurisdiction has to say. Finally, s. 16(2)(g) is a residuary clause that allows the Agency to consider other factors it considers appropriate, but, like any discretionary power granted under legislation, it must be exercised reasonably and consistent with the object and purpose of the IAA, which is to prevent significant adverse environmental effects. Fidelity to the principles of cooperative federalism confirms the constitutionality of the discretion granted under s. 16. A court, in evaluating the constitutionality of the legislation as a whole, must favour, where possible, the ordinary operation of statutes enacted by both levels of government and must avoid blocking the application of measures enacted to promote the public interest, while the presumption of constitutionality requires a court to interpret the discretion granted under the legislation as being exercised in good faith and within constitutional bounds. Finally, if the Agency were to exercise its discretion to require a project with little or no potential for adverse federal impacts to proceed to an impact assessment, such a decision would be unreasonable and would not reflect the object and purpose of the IAA to prevent significant adverse federal environmental effects. Such a decision in a particular case, and based on an appropriate evidentiary record, would be subject to judicial review.
At the third juncture — the impact assessment phase — the Agency must take account of the broad range of factors in s. 22(1) of the IAA. When establishing the process for considering the environmental costs and benefits of a designated project that potentially has an adverse federal effect, Parliament is constitutionally entitled to instruct the decision maker to consider the full range of costs and benefits of the project. Some of the listed factors are effects that fall within federal jurisdiction, while others are intended to allow federal authorities to make a fully informed decision about the costs and benefits of proceeding with the project, with or without conditions, and about potential mitigation measures. This is essential for federal authorities to make an integrated decision as to the designated project’s overall costs and benefits.
At the final juncture, the decision‑making phase requires a cost‑benefit analysis based on public interest factors identified in s. 63 of the IAA, including the extent to which the designated project contributes to sustainability, has adverse federal effects that are significant as indicated in the impact assessment report, has an impact on any Indigenous group or adverse effects on the rights of Indigenous peoples protected under s. 35 of the Constitution Act, 1982, and hinders or contributes to the Government of Canada’s ability to meet its environmental obligations and climate change commitments. Section 63 requires a reasonable and proportionate weighing of the public interest factors in deciding whether a project may proceed, and if so, whether any conditions should be imposed. This involves a cost‑benefit balancing of the adverse federal effects and all other relevant public interest considerations relating to the project. As long as the public interest decision is anchored in federal jurisdiction based on adverse federal effects, federal authorities are entitled to make an integrated and proportionate decision that weighs the costs and benefits of allowing the project to proceed, and, if it is allowed to proceed, whether conditions should be imposed. When there is a clear impact on an area of federal jurisdiction, the decision whether to allow the project to go ahead in spite of the impact can be an integrated decision that takes into account issues that are within provincial jurisdiction. It does not serve to protect provincial jurisdiction to force the federal decision to be made in a partially blind manner. Nor can the decision be limited to whether adverse federal effects are in the public interest, without considering other factors. Adverse federal effects will rarely, if ever, be in the public interest. For a project to be in the public interest, its adverse federal effects need to be outweighed by other positive benefits of the project, so the federal decision maker must consider the socio‑economic benefits that will flow from a project and that will outweigh the negative impacts. It cannot be constitutional for federal authorities to consider whether a project has economic benefits, but unconstitutional for them to consider whether the same project promotes sustainable development.
The defined “effects within federal jurisdiction” serve as “triggers” or gateways for the prohibitions under s. 7 of the IAA and for the application of the designated projects scheme of the IAA. Parliament chose broad language for what constitutes an “effect within federal jurisdiction” under the IAA, but each effect, as defined, is properly classified as falling under Parliament’s exclusive legislative jurisdiction. None of the adverse federal effects is constitutionally overbroad. If Canada ever attempts to treat a project’s greenhouse gas emissions as an effect within federal jurisdiction, then whether an individual project’s greenhouse gas emissions, in context of the global scale of the climate crisis, may cause non‑trivial changes to the environment is best assessed through case‑specific judicial review.
Finally, the doctrine of interjurisdictional immunity does not apply. Characterizing a project as “provincial” is not a basis to reject the application of federal environmental assessment legislation — provincial works or undertakings are not shielded from otherwise valid federal legislation.
Cases Cited
By Wagner C.J.
Applied: Friends of the Oldman River Society v. Canada (Minister of Transport), [1992] 1 S.C.R. 3; considered: Quebec (Attorney General) v. Moses, 2010 SCC 17, [2010] 1 S.C.R. 557; References re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11; referred to: Ontario v. Canadian Pacific Ltd., [1995] 2 S.C.R. 1031; R. v. Hydro-Québec, [1997] 3 S.C.R. 213; MiningWatch Canada v. Canada (Fisheries and Oceans), 2010 SCC 2, [2010] 1 S.C.R. 6; Taseko Mines Limited v. Canada (Environment), 2017 FC 1100, 15 C.E.L.R. (4th) 53; R. v. Morgentaler, [1993] 3 S.C.R. 463; Union Colliery Co. of British Columbia v. Bryden, [1899] A.C. 580; Quebec (Attorney General) v. Canada (Attorney General), 2015 SCC 14, [2015] 1 S.C.R. 693; Reference re Pan‑Canadian Securities Regulation, 2018 SCC 48, [2018] 3 S.C.R. 189; Canadian Western Bank v. Alberta, 2007 SCC 22, [2007] 2 S.C.R. 3; Reference re Firearms Act (Can.), 2000 SCC 31, [2000] 1 S.C.R. 783; Reference re Genetic Non-Discrimination Act, 2020 SCC 17, [2020] 2 S.C.R. 283; Kitkatla Band v. British Columbia (Minister of Small Business, Tourism and Culture), 2002 SCC 31, [2002] 2 S.C.R. 146; Reference re Assisted Human Reproduction Act, 2010 SCC 61, [2010] 3 S.C.R. 457; Murray‑Hall v. Quebec (Attorney General), 2023 SCC 10; Reference re The Farm Products Marketing Act, [1957] S.C.R. 198; Nova Scotia Board of Censors v. McNeil, [1978] 2 S.C.R. 662; Severn v. The Queen (1878), 2 S.C.R. 70; Rogers Communications Inc. v. Châteauguay (City), 2016 SCC 23, [2016] 1 S.C.R. 467; Osborne v. Canada (Treasury Board), [1991] 2 S.C.R. 69; McKay v. The Queen, [1965] S.C.R. 798; Siemens v. Manitoba (Attorney General), 2003 SCC 3, [2003] 1 S.C.R. 6; Desgagnés Transport Inc. v. Wärtsilä Canada Inc., 2019 SCC 58, [2019] 4 S.C.R. 228; Law Society of British Columbia v. Mangat, 2001 SCC 67, [2001] 3 S.C.R. 113; Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27; Reference re Securities Act, 2011 SCC 66, [2011] 3 S.C.R. 837; Hodge v. The Queen (1883), 9 App. Cas. 117; Liquidators of the Maritime Bank of Canada v. Receiver‑General of New Brunswick, [1892] A.C. 437; Reference re Secession of Quebec, [1998] 2 S.C.R. 217; Consolidated Fastfrate Inc. v. Western Canada Council of Teamsters, 2009 SCC 53, [2009] 3 S.C.R. 407; Global Securities Corp. v. British Columbia (Securities Commission), 2000 SCC 21, [2000] 1 S.C.R. 494; British Columbia v. Imperial Tobacco Canada Ltd., 2005 SCC 49, [2005] 2 S.C.R. 473; Reference re Environmental Management Act (British Columbia), 2019 BCCA 181, 434 D.L.R. (4th) 213, aff’d 2020 SCC 1, [2020] 1 S.C.R. 3; Quebec (Attorney General) v. Canada (National Energy Board), [1994] 1 S.C.R. 159; Rio Hotel Ltd. v. New Brunswick (Liquor Licensing Board), [1987] 2 S.C.R. 59; Multiple Access Ltd. v. McCutcheon, [1982] 2 S.C.R. 161; Bell Canada v. Quebec (Commission de la santé et de la sécurité du travail), [1988] 1 S.C.R. 749; Attorney General of Quebec v. IMTT-Québec inc., 2019 QCCA 1598, 79 Admin. L.R. (6th) 1; 114957 Canada Ltée (Spraytech, Société d’arrosage) v. Hudson (Town), 2001 SCC 40, [2001] 2 S.C.R. 241; R. v. Crown Zellerbach Canada Ltd., [1988] 1 S.C.R. 401; Interprovincial Co-operatives Ltd. v. The Queen, [1976] 1 S.C.R. 477; Gould v. Yukon Order of Pioneers, [1996] 1 S.C.R. 571; Canadian Broadcasting Corp. v. SODRAC 2003 Inc., 2015 SCC 57, [2015] 3 S.C.R. 615; Krayzel Corp. v. Equitable Trust Co., 2016 SCC 18, [2016] 1 S.C.R. 273; R. v. Hinchey, [1996] 3 S.C.R. 1128; R. v. Khill, 2021 SCC 37; Fowler v. The Queen, [1980] 2 S.C.R. 213; Delgamuukw v. British Columbia, [1997] 3 S.C.R. 1010; Attorney‑General for Alberta v. Attorney‑General for Canada, [1947] A.C. 503; Harper v. Canada (Attorney General), 2004 SCC 33, [2004] 1 S.C.R. 827; Palmer v. The Queen, [1980] 1 S.C.R. 759; Reference re Upper Churchill Water Rights Reversion Act, [1984] 1 S.C.R. 297.
By Karakatsanis and Jamal JJ. (dissenting in part)
Canadian Western Bank v. Alberta, 2007 SCC 22, [2007] 2 S.C.R. 3; Canadian Broadcasting Corp. v. Quebec Police Commission, [1979] 2 S.C.R. 618; Reference re The Far

Court headnote

Reference re Impact Assessment Act Collection Supreme Court Judgments Date 2023-10-13 Neutral citation 2023 SCC 23 Case number 40195 Judges Wagner, Richard; Karakatsanis, Andromache; Côté, Suzanne; Rowe, Malcolm; Martin, Sheilah; Kasirer, Nicholas; Jamal, Mahmud On appeal from Alberta Subjects Constitutional law Notes Case in Brief SCC Case Information Decision Content SUPREME COURT OF CANADA Citation: Reference re Impact Assessment Act, 2023 SCC 23 Appeal Heard: March 21, 22, 2023 Judgment Rendered: October 13, 2023 Docket: 40195 Between: Attorney General of Canada Appellant and Attorney General of Alberta Respondent - and - Attorney General of Ontario, Attorney General of Quebec, Attorney General of New Brunswick, Attorney General of Manitoba, Attorney General of British Columbia, Attorney General of Saskatchewan, Attorney General of Newfoundland and Labrador, Indian Resource Council, File Hills Qu’Appelle Tribal Council, Pasqua First Nation, World Wildlife Fund Canada, Nature Canada, West Coast Environmental Law Association, Canadian Association of Petroleum Producers, Canadian Taxpayers Federation, Athabasca Chipewyan First Nation, Business Council of Alberta, Ecojustice Canada Society, Woodland Cree First Nation, Mikisew Cree First Nation, Hydro-Québec, Canadian Constitution Foundation, Independent Contractors and Businesses Association, Alberta Enterprise Group, Canadian Association of Physicians for the Environment, Advocates for the Rule of Law, Oceans North Conservation Society, Canadian Environmental Law Association, Environmental Defence Canada Inc., MiningWatch Canada Inc., Explorers and Producers Association of Canada, First Nations Major Projects Coalition Society, Centre québécois du droit de l’environnement and Lummi Nation Interveners Coram: Wagner C.J. and Karakatsanis, Côté, Rowe, Martin, Kasirer and Jamal JJ. Reasons for Judgment: (paras. 1 to 216) Wagner C.J. (Côté, Rowe, Martin and Kasirer JJ. concurring) Joint Reasons Dissenting in Part: (paras. 217 to 361) Karakatsanis and Jamal JJ. Note: This document is subject to editorial revision before its reproduction in final form in the Canada Supreme Court Reports. IN THE MATTER OF a Reference by the Lieutenant Governor in Council to the Court of Appeal of Alberta concerning the constitutionality of the Impact Assessment Act, S.C. 2019, c. 28, s. 1, and of the Physical Activities Regulations, SOR/2019-285 Attorney General of Canada Appellant v. Attorney General of Alberta Respondent and Attorney General of Ontario, Attorney General of Quebec, Attorney General of New Brunswick, Attorney General of Manitoba, Attorney General of British Columbia, Attorney General of Saskatchewan, Attorney General of Newfoundland and Labrador, Indian Resource Council, File Hills Qu’Appelle Tribal Council, Pasqua First Nation, World Wildlife Fund Canada, Nature Canada, West Coast Environmental Law Association, Canadian Association of Petroleum Producers, Canadian Taxpayers Federation, Athabasca Chipewyan First Nation, Business Council of Alberta, Ecojustice Canada Society, Woodland Cree First Nation, Mikisew Cree First Nation, Hydro-Québec, Canadian Constitution Foundation, Independent Contractors and Businesses Association, Alberta Enterprise Group, Canadian Association of Physicians for the Environment, Advocates for the Rule of Law, Oceans North Conservation Society, Canadian Environmental Law Association, Environmental Defence Canada Inc., MiningWatch Canada Inc., Explorers and Producers Association of Canada, First Nations Major Projects Coalition Society, Centre québécois du droit de l’environnement and Lummi Nation Interveners Indexed as: Reference re Impact Assessment Act 2023 SCC 23 File No.: 40195. 2023: March 21, 22; 2023: October 13. Present: Wagner C.J. and Karakatsanis, Côté, Rowe, Martin, Kasirer and Jamal JJ. on appeal from the court of appeal of alberta Constitutional law — Division of powers — Environmental impact assessment — Federal statute and regulations establishing assessment process for projects potentially having environmental impacts — Whether statute and regulations intra vires Parliament — Constitution Act, 1867, ss. 91, 92 — Impact Assessment Act, S.C. 2019, c. 28, s. 1 — Physical Activities Regulations, SOR/2019‑285. In 2019, following a review of the existing federal environmental assessment process, Parliament enacted the Impact Assessment Act (“IAA”) and the Governor in Council made the Physical Activities Regulations (“Regulations”) under the IAA. The IAA and the Regulations establish a complex information gathering and regulatory scheme, which is essentially two schemes in one. First, a discrete portion of the scheme — contained in ss. 81 to 91 of the IAA — deals with projects carried out or financed by federal authorities on federal lands or outside Canada. Second, the balance of the scheme — made up of the IAA’s remaining provisions and the Regulations — deals with “designated projects” as defined in the IAA. The impact assessment process for designated projects can be divided into three main phases: the planning phase, the impact assessment phase and the decision‑making phase. The planning phase focuses on initial information gathering. The proponent of a designated project must provide the Impact Assessment Agency with an initial project description. The Agency then consults with a number of parties, and decides whether the project requires an impact assessment. In the impact assessment phase, the proponent is required to provide the necessary information or studies to the entity conducting the assessment, which will be the Agency or its delegate. This phase culminates in the preparation of an assessment report, which sets out the effects that are likely to be caused by the carrying out of the designated project and indicates those that are adverse “effects within federal jurisdiction” and those that are adverse “direct or incidental effects”, terms defined in s. 2 of the IAA. The assessment report must also take into account numerous mandatory assessment factors listed in s. 22 of the IAA. The mandatory factors include changes to the environment or to health, social or economic conditions and the positive and negative consequences of these changes. Finally, during the decision‑making phase, the decision maker must determine whether the adverse effects within federal jurisdiction and the adverse direct or incidental effects are in the public interest. If the decision maker concludes that the effects in question are in the public interest, the Minister of the Environment must establish any condition that the Minister considers appropriate in relation to those effects. The assessment process set forth in ss. 81 to 91 focuses on a narrow set of projects: physical activities carried out on federal lands or outside Canada in relation to a physical work that are not designated projects or physical activities designated by regulation, and physical activities designated under s. 87 or that are part of a designated class of physical activities. Sections 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. If so, it must then be determined whether these effects are justified in the circumstances. Alberta’s Lieutenant Governor in Council referred two questions to the province’s Court of Appeal. They asked whether the IAA was unconstitutional, in whole or in part, as being beyond the legislative authority of Parliament under the Constitution, and whether the Regulations were unconstitutional, in whole or in part, by virtue of purporting to apply to certain activities listed in Schedule 2 that relate to matters entirely within the legislative authority of the provinces under the Constitution. A majority of the Court of Appeal concluded that the IAA and the Regulations are ultra vires Parliament and therefore unconstitutional in their entirety. The Attorney General of Canada appeals as of right to the Court. Held (Karakatsanis and Jamal JJ. dissenting in part): The appeal should be allowed in part. Per Wagner C.J. and Côté, Rowe, Martin and Kasirer JJ.: The reference questions should be answered in the affirmative: the federal impact assessment scheme is unconstitutional in part. Although the process set forth in ss. 81‑91 of the IAA is constitutional and can be separated out, the balance of the scheme — that is, the “designated projects” portion — is ultra vires Parliament and thus unconstitutional. The designated projects scheme is ultra vires for two overarching reasons: it is not in pith and substance directed at regulating “effects within federal jurisdiction” as defined in the IAA because these effects do not drive the scheme’s decision‑making functions, and the defined term “effects within federal jurisdiction” does not align with federal legislative jurisdiction. The overbreadth of these effects exacerbates the constitutional frailties of the scheme’s decision‑making functions. Environmental protection remains one of today’s most pressing challenges, and Parliament has the power to enact a scheme of environmental assessment to meet this challenge, but Parliament also has the duty to act within the enduring division of powers framework laid out in the Constitution. The division of powers analysis has two steps: characterization and classification. At the characterization step, a court must consider the purpose and effects of the challenged law in order to identify its pith and substance. In order to determine a law’s purpose, a court looks to both intrinsic evidence (the text of the law, its preamble, its purpose clause, if it has one, its title and its overall structure) and extrinsic evidence (the context of the law in question, the minutes of parliamentary committees and relevant government publications). In analyzing the effects of the challenged law, a court considers both legal effects (effects that flow directly from the provisions of the statute itself) and practical effects (effects that flow from the application of the statute). Finally, the court must characterize the pith and substance of the challenged law as precisely as possible, capturing the law’s essential character in terms that are as precise as the law will allow. Characterization is distinct from classification, and it is imperative that the characterization and classification analyses be kept distinct. In determining the pith and substance of a law, courts must not refer to the heads of power contained within the Constitution Act, 1867. The characterization step of the analysis must focus exclusively on the pith and substance or dominant characteristic of the law. Only after precisely stating the matter to which the law relates should a court proceed to the classification phase of the analysis and consider specific heads of power. In addition, the presumption of constitutionality is a cardinal principle of the Court’s division of powers jurisprudence. According to this presumption, every legislative provision is presumed to be intra vires the level of government that enacted it, so a court should approach any question as to its validity on the assumption that it was validly enacted unless the party challenging it demonstrates otherwise. This presumption also functions as a principle of statutory interpretation: it directs a court to assume that a legislative body does not intend to exceed its powers under the Constitution. Therefore, when characterizing a challenged law, a court faced with competing, plausible characterizations should normally choose that one that would support the validity of the law. However, this presumption is not an impermeable shield that protects legislation from constitutional review by courts, nor can they employ the presumption of constitutionality to rewrite legislative text as they see fit in order to bring it into compliance with the Constitution. Courts cannot rely on the presumption of constitutionality to disregard a statute that speaks clearly and is ultra vires its enacting body, and the presumption does not displace the duty of courts to meaningfully review the constitutionality of legislation. Similarly, a court cannot circumvent its duty to meaningfully review the constitutionality of legislation by suggesting that, insofar as an administrative decision maker applies a law unconstitutionally, the application of that law may be judicially reviewed. The constitutional validity of a law and its administrative application are distinct concepts. Where a law is ultra vires and therefore unconstitutional, it cannot be saved by the prospect of administrative judicial review. After a court characterizes the matter of a law, it must determine the classes of subjects into which the matter falls by reference to the heads of power set out in s. 91 or 92 of the Constitution Act, 1867. If the matter of law is properly classified as falling under a head of power assigned to the adopting level of government, the legislation is intra vires and valid. A law is classified based on its main thrust or dominant characteristic, and its secondary effects are not the focus of the validity analysis. The fact that a valid law incidentally touches on a head of power belonging to the other level of government does not affect its validity. Classifying environmental legislation presents a challenge because the “environment” is not a head of power under s. 91 or 92 of the Constitution Act, 1867. Environmental management cuts across many different areas of constitutional responsibility. Accordingly, neither level of government has exclusive jurisdiction over the whole of the “environment” or over all “environmental assessment”. Both levels of government can legislate in respect of certain aspects of environmental protection, including certain aspects of the environmental assessment of physical activities. Shared federal and provincial responsibility for environmental impact assessment is neither unusual nor unworkable; rather, it is a central feature of environmental decision making in Canada. This is consistent with the double aspect doctrine, which reflects the idea that the same fact situation can be regulated from different perspectives, one falling within s. 91 and the other falling within s. 92. Nonetheless, the double aspect doctrine must be applied with caution. First, not all fact situations have a double aspect, and each fact situation must be identified with precision. Environmental assessment of physical activities may or may not have a double aspect in relation to a specific project. Second, the fact that environmental assessment of physical activities may have a double aspect — with some elements falling within the legislative authority of each level of government — does not mean that it is an area of concurrent jurisdiction. If a fact situation can be regulated from both a federal perspective and a provincial perspective, it follows that each level of government can only enact laws which, in pith and substance, fall under its respective jurisdiction. The notion that both levels of government may legislate in respect of certain aspects of environmental protection, each pursuant to its own legislative competence, is also consistent with the principle of cooperative federalism. However, while flexibility and cooperation are important to federalism, they cannot override or modify the separation of powers. Courts may not, under the guise of cooperative federalism, erode the constitutional balance inherent in the Canadian federal state. In the instant case, a careful analysis of the purpose and effects of the IAA and Regulations reveals that the scheme they establish has two distinct components: one dealing with “designated projects” and another addressing projects carried out or financed by federal authorities on federal lands or outside Canada (ss. 81 to 91 of the IAA). The intrinsic and extrinsic evidence reveal that the scheme articulates a broad array of purposes, including protecting the environment and fostering sustainability; satisfying Canada’s environmental obligations; assessing and regulating the broad effects of certain physical activities, such as effects on health, social and economic conditions; facilitating the participation of Indigenous peoples and the public; and establishing an efficient and transparent process. The legal and practical effects, considered together, reveal that the scheme establishes a comprehensive information‑gathering and regulatory process. The pith and substance of the “designated projects” component is to assess and regulate designated projects with a view to mitigating or preventing their potential adverse environmental, health, social and economic impacts. The pith and substance of the component set out in ss. 81 to 91 is to direct the manner in which federal authorities that carry out or finance a project on federal lands or outside Canada assess the significant adverse environmental effects that the project may have. There is no doubt that Parliament can enact impact assessment legislation that is directed at the federal aspects of projects. The breadth of these “federal aspects” will vary with the circumstances. Where Parliament is vested with jurisdiction to legislate in respect of a particular activity, it has broad discretion to regulate that activity and its effects, but Parliament’s jurisdiction is more restricted where the activity falls outside of its legislative competence. In those cases, it can validly legislate only from the perspective of the federal aspects of the activity. The designated projects scheme treats all “designated projects” in the same way, regardless of whether Parliament is vested with broad jurisdiction over the activity itself or narrower jurisdiction over the activity’s impacts on federal heads of power. And many of the physical activities to which the scheme applies are primarily regulated through the provincial legislatures’ powers over local works and undertakings or natural resources. Parliament can enact impact assessment legislation to regulate these projects from a federal perspective, so long as the regulation of federal aspects represents the dominant characteristic of the law. The “designated projects” scheme is ultra vires, as its pith and substance exceeds the bounds of federal jurisdiction. This is so for two overarching reasons. First, the “effects within federal jurisdiction” do not drive the scheme’s decision‑making functions. Consequently, the scheme is not in pith and substance directed at regulating these effects. There are four decision‑making junctures embedded in the scheme: (i) the designation of physical activities as “designated projects”; (ii) the screening decision; (iii) the delineation of the scope of the impact assessment and the factors to be considered therein; and (iv) the public interest decision and resulting regulation and oversight. The scheme requires the decision maker to consider a host of factors but does not specify how those factors are to drive the ultimate conclusion. The scheme’s decision‑making mechanism thereby loses its focus on regulating federal impacts. Instead, it grants the decision maker a practically untrammelled power to regulate projects qua projects, regardless of whether Parliament has jurisdiction to regulate a given physical activity in its entirety. In this respect, the screening decision and the public interest decision are constitutionally problematic. The screening decision as to whether an impact assessment is required for a particular project must be rooted in the possibility of adverse federal effects. However, because the decision maker must take into account an open‑ended list of factors, all of seemingly equal importance, only two of them tied to federal jurisdiction, an impact assessment could be required for reasons other than, or not sufficiently tied to, the project’s possible impacts on areas of federal jurisdiction. Similarly, the public interest decision must focus on the project’s federal effects. However, because the mandatory public interest factors are not all confined to federal legislative competence, and because some factors are framed in relation to the assessment of the project as a whole rather than to the adverse “effects within federal jurisdiction”, a determination of whether adverse federal effects are in the public interest is transformed into a determination of whether the project as a whole is in the public interest. Second, the defined term “effects within federal jurisdiction” does not align with federal legislative jurisdiction under s. 91, but rather, goes far beyond its limits. Its overbreadth manifests itself in two distinct ways. First, the definition of “effects within federal jurisdiction” is central to the scheme’s decision‑making functions. Its overbreadth dilutes the focus at the key decision‑making junctures, shifting it away from federal aspects and encompassing aspects that are within provincial jurisdiction. Second, the defined “effects within federal jurisdiction” result in impermissibly broad prohibitions. Due to the overbreadth of these defined effects, the conduct prohibited by s. 7 of the IAA extends beyond the range of conduct that Parliament can validly regulate pursuant to its assigned heads of power. The component of the scheme set out in ss. 81 to 91 of the IAA is clearly intra vires Parliament. These provisions have not been challenged as unconstitutional. Furthermore, the process established by these provisions resembles the process upheld by the Court in Friends of the Oldman River Society v. Canada (Minister of Transport), [1992] 1 S.C.R. 3. Though the test for severance in division of powers cases is stringent, ss. 81 to 91 can be separated from the balance of the scheme and upheld as constitutional. Per Karakatsanis and Jamal JJ. (dissenting in part): The IAA and the Regulations are intra vires in their entirety. The environment, by its very nature, is complex and diffuse. It is not a subject matter assigned to either Parliament or the provinces under the Constitution Act, 1867, but instead cuts across many areas of constitutional responsibility, some federal, some provincial, and all levels of government bear an all‑important duty to use their powers to protect it. This shared responsibility is neither unusual nor unworkable in a federal state such as Canada. Rather, it reflects the Court’s flexible approach to federalism, which recognizes that overlapping powers are unavoidable and intergovernmental cooperation is essential. Legislation must be approached from a posture of respect and presumed good faith on the part of legislatures, interpreted to comply with constitutional limits, and evaluated on the basis that the courts should favour the operation of statutes enacted by both levels of government whenever possible. Courts must presume that the regime will be administered in a constitutionally compliant manner and will not find legislation unconstitutional simply because it could conceivably be misused. Courts must also recognize and respect the constitutional bargain struck with respect to the exclusive catalogue of both federal and provincial powers. The IAA builds on earlier federal environmental assessment regimes by establishing a multi‑stage process to assess the effects of designated projects and protect against adverse effects in specified areas, unless allowing them would be in the public interest. The IAA contains two distinct schemes: a primary scheme addressing physical activities designated as “designated projects”, which takes up most of the IAA, and a secondary scheme in ss. 81 to 91 that applies to federal projects. There is no dispute that the secondary scheme in ss. 81 to 91 for projects funded by the federal government or carried out either on federal lands or outside Canada is intra vires Parliament. The IAA’s purpose and its practical and legal effects indicate that the pith and substance of the designated projects scheme is to establish an environmental assessment process to (1) assess the effects of physical activities or major projects on federal lands, Indigenous peoples, fisheries, migratory birds, and lands, air, or waters outside Canada or in provinces other than where a project is located, and (2) determine whether to impose restrictions on the project to safeguard against significant adverse federal effects, unless allowing those effects is in the public interest. This description of the pith and substance is more precise and highlights the critical role of the public interest decision‑making process under the legislation. Based on that characterization, the public interest decision‑making process under the IAA is constitutional, provided that it is anchored in adverse federal effects within Parliament’s legislative jurisdiction over fisheries, navigable waters, Indians and lands reserved for Indians, criminal law, international and interprovincial rivers, and the national concern branch of the peace, order, and good government power. The intrinsic and extrinsic evidence shows that the purpose of the IAA is to establish a transparent information‑gathering and decision‑making process about whether physical activities or designated projects have adverse federal effects, and if so, whether they should be permitted in the public interest, with or without conditions. The intrinsic evidence suggests that the information‑gathering process and decision‑making function are more specifically directed at whether the project under consideration has any adverse effects within federal jurisdiction and, if so, whether those effects are nonetheless in the public interest. This more precise purpose of the IAA is reflected in the long title of the statute, the text and structure of the legislation, and the IAA’s stated purposes and preamble. Most importantly, the IAA is intended to protect the components of the environment and the health, social and economic conditions that are within the legislative authority of Parliament from adverse effects caused by a designated project. Extrinsic evidence confirms that the IAA’s dominant purpose is to allow well‑informed, transparent decisions as to whether allowing a project’s adverse federal effects is in the public interest. The IAA’s legal effects support that conclusion. The main legal effects of the IAA are that: (1) projects are designated based on the likelihood they would cause non‑trivial adverse federal effects; (2) the Agency decides whether to assess projects on the same basis; (3) the Agency’s report must identify the adverse federal effects that a project is likely to cause and specify the extent to which those effects are significant; and (4) the ultimate public interest determination and any resulting conditions imposed on the project must be reasonable and proportionate, based on the adverse federal effects, the extent to which they are significant, and whether they can be mitigated. The statutory text, context and purpose, along with the applicable interpretive principles, show that Parliament did not intend to capture de minimis effects. Indeed, the significance threshold for adverse environmental effects permeates every major stage and decision taken under the IAA with respect to designated projects. Moreover, even if interpreting the IAA to capture de minimis effects were a reasonably available interpretation, the presumption of constitutionality demands that it be rejected in favour of a constitutionally‑conforming interpretation. The IAA’s practical effects, including potential delays or the expenditure of resources, may be important policy matters for Parliament, but they are irrelevant for constitutional purposes. Parliament chose broad language for what constitutes an “effect within federal jurisdiction” under the IAA, but each of the adverse federal effects is properly classified as falling under Parliament’s exclusive legislative jurisdiction. Each of the adverse federal effects anchor federal review and decision making under the IAA legislative scheme and fit within multiple heads of Parliament’s legislative jurisdiction under the Constitution Act, 1867. There are four decision‑making junctures under the IAA: (a) designating physical activities as “designated projects”; (b) the screening decision as to whether a project should proceed to an impact assessment; (c) identifying the scope of the assessment and the factors to be considered; and (d) the public interest decision and resulting regulation and oversight. The adverse federal effects are not overbroad or misaligned with federal legislative jurisdiction. At the first juncture, the designation process is driven by the potential for a physical activity to cause adverse federal effects. The designation process appropriately reflects the precautionary principle and the need to gather information at an early stage of an environmental impact assessment process, to properly inform federal decision making about whether a designated project may cause adverse federal effects. Once a project is designated under the Regulations or by ministerial order, the project moves to the second juncture, at which the Agency decides whether to conduct an impact assessment of the designated project based on mandatory factors in s. 16(2) of the IAA. This screening decision is anchored in the possibility that the designated project will cause adverse federal effects. Each of the discretionary factors in ss. 16(2)(a), (b), and (c) is rooted in adverse federal effects, and s. 16(2)(d) may also reflect adverse federal effects, depending on the comments of the public or the Indigenous group consulted. Section 16(2)(e) is largely irrelevant for most provincially regulated projects, unless they occur on federal lands or relate to a federal government policy, program, or plan, in which case there is a clear nexus to federal jurisdiction. Section 16(2)(f) applies only where another jurisdiction conducts an assessment, in which case it is appropriate for the Agency to consider what the other jurisdiction has to say. Finally, s. 16(2)(g) is a residuary clause that allows the Agency to consider other factors it considers appropriate, but, like any discretionary power granted under legislation, it must be exercised reasonably and consistent with the object and purpose of the IAA, which is to prevent significant adverse environmental effects. Fidelity to the principles of cooperative federalism confirms the constitutionality of the discretion granted under s. 16. A court, in evaluating the constitutionality of the legislation as a whole, must favour, where possible, the ordinary operation of statutes enacted by both levels of government and must avoid blocking the application of measures enacted to promote the public interest, while the presumption of constitutionality requires a court to interpret the discretion granted under the legislation as being exercised in good faith and within constitutional bounds. Finally, if the Agency were to exercise its discretion to require a project with little or no potential for adverse federal impacts to proceed to an impact assessment, such a decision would be unreasonable and would not reflect the object and purpose of the IAA to prevent significant adverse federal environmental effects. Such a decision in a particular case, and based on an appropriate evidentiary record, would be subject to judicial review. At the third juncture — the impact assessment phase — the Agency must take account of the broad range of factors in s. 22(1) of the IAA. When establishing the process for considering the environmental costs and benefits of a designated project that potentially has an adverse federal effect, Parliament is constitutionally entitled to instruct the decision maker to consider the full range of costs and benefits of the project. Some of the listed factors are effects that fall within federal jurisdiction, while others are intended to allow federal authorities to make a fully informed decision about the costs and benefits of proceeding with the project, with or without conditions, and about potential mitigation measures. This is essential for federal authorities to make an integrated decision as to the designated project’s overall costs and benefits. At the final juncture, the decision‑making phase requires a cost‑benefit analysis based on public interest factors identified in s. 63 of the IAA, including the extent to which the designated project contributes to sustainability, has adverse federal effects that are significant as indicated in the impact assessment report, has an impact on any Indigenous group or adverse effects on the rights of Indigenous peoples protected under s. 35 of the Constitution Act, 1982, and hinders or contributes to the Government of Canada’s ability to meet its environmental obligations and climate change commitments. Section 63 requires a reasonable and proportionate weighing of the public interest factors in deciding whether a project may proceed, and if so, whether any conditions should be imposed. This involves a cost‑benefit balancing of the adverse federal effects and all other relevant public interest considerations relating to the project. As long as the public interest decision is anchored in federal jurisdiction based on adverse federal effects, federal authorities are entitled to make an integrated and proportionate decision that weighs the costs and benefits of allowing the project to proceed, and, if it is allowed to proceed, whether conditions should be imposed. When there is a clear impact on an area of federal jurisdiction, the decision whether to allow the project to go ahead in spite of the impact can be an integrated decision that takes into account issues that are within provincial jurisdiction. It does not serve to protect provincial jurisdiction to force the federal decision to be made in a partially blind manner. Nor can the decision be limited to whether adverse federal effects are in the public interest, without considering other factors. Adverse federal effects will rarely, if ever, be in the public interest. For a project to be in the public interest, its adverse federal effects need to be outweighed by other positive benefits of the project, so the federal decision maker must consider the socio‑economic benefits that will flow from a project and that will outweigh the negative impacts. It cannot be constitutional for federal authorities to consider whether a project has economic benefits, but unconstitutional for them to consider whether the same project promotes sustainable development. The defined “effects within federal jurisdiction” serve as “triggers” or gateways for the prohibitions under s. 7 of the IAA and for the application of the designated projects scheme of the IAA. Parliament chose broad language for what constitutes an “effect within federal jurisdiction” under the IAA, but each effect, as defined, is properly classified as falling under Parliament’s exclusive legislative jurisdiction. None of the adverse federal effects is constitutionally overbroad. If Canada ever attempts to treat a project’s greenhouse gas emissions as an effect within federal jurisdiction, then whether an individual project’s greenhouse gas emissions, in context of the global scale of the climate crisis, may cause non‑trivial changes to the environment is best assessed through case‑specific judicial review. Finally, the doctrine of interjurisdictional immunity does not apply. Characterizing a project as “provincial” is not a basis to reject the application of federal environmental assessment legislation — provincial works or undertakings are not shielded from otherwise valid federal legislation. Cases Cited By Wagner C.J. Applied: Friends of the Oldman River Society v. Canada (Minister of Transport), [1992] 1 S.C.R. 3; considered: Quebec (Attorney General) v. Moses, 2010 SCC 17, [2010] 1 S.C.R. 557; References re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11; referred to: Ontario v. Canadian Pacific Ltd., [1995] 2 S.C.R. 1031; R. v. Hydro-Québec, [1997] 3 S.C.R. 213; MiningWatch Canada v. Canada (Fisheries and Oceans), 2010 SCC 2, [2010] 1 S.C.R. 6; Taseko Mines Limited v. Canada (Environment), 2017 FC 1100, 15 C.E.L.R. (4th) 53; R. v. Morgentaler, [1993] 3 S.C.R. 463; Union Colliery Co. of British Columbia v. Bryden, [1899] A.C. 580; Quebec (Attorney General) v. Canada (Attorney General), 2015 SCC 14, [2015] 1 S.C.R. 693; Reference re Pan‑Canadian Securities Regulation, 2018 SCC 48, [2018] 3 S.C.R. 189; Canadian Western Bank v. Alberta, 2007 SCC 22, [2007] 2 S.C.R. 3; Reference re Firearms Act (Can.), 2000 SCC 31, [2000] 1 S.C.R. 783; Reference re Genetic Non-Discrimination Act, 2020 SCC 17, [2020] 2 S.C.R. 283; Kitkatla Band v. British Columbia (Minister of Small Business, Tourism and Culture), 2002 SCC 31, [2002] 2 S.C.R. 146; Reference re Assisted Human Reproduction Act, 2010 SCC 61, [2010] 3 S.C.R. 457; Murray‑Hall v. Quebec (Attorney General), 2023 SCC 10; Reference re The Farm Products Marketing Act, [1957] S.C.R. 198; Nova Scotia Board of Censors v. McNeil, [1978] 2 S.C.R. 662; Severn v. The Queen (1878), 2 S.C.R. 70; Rogers Communications Inc. v. Châteauguay (City), 2016 SCC 23, [2016] 1 S.C.R. 467; Osborne v. Canada (Treasury Board), [1991] 2 S.C.R. 69; McKay v. The Queen, [1965] S.C.R. 798; Siemens v. Manitoba (Attorney General), 2003 SCC 3, [2003] 1 S.C.R. 6; Desgagnés Transport Inc. v. Wärtsilä Canada Inc., 2019 SCC 58, [2019] 4 S.C.R. 228; Law Society of British Columbia v. Mangat, 2001 SCC 67, [2001] 3 S.C.R. 113; Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27; Reference re Securities Act, 2011 SCC 66, [2011] 3 S.C.R. 837; Hodge v. The Queen (1883), 9 App. Cas. 117; Liquidators of the Maritime Bank of Canada v. Receiver‑General of New Brunswick, [1892] A.C. 437; Reference re Secession of Quebec, [1998] 2 S.C.R. 217; Consolidated Fastfrate Inc. v. Western Canada Council of Teamsters, 2009 SCC 53, [2009] 3 S.C.R. 407; Global Securities Corp. v. British Columbia (Securities Commission), 2000 SCC 21, [2000] 1 S.C.R. 494; British Columbia v. Imperial Tobacco Canada Ltd., 2005 SCC 49, [2005] 2 S.C.R. 473; Reference re Environmental Management Act (British Columbia), 2019 BCCA 181, 434 D.L.R. (4th) 213, aff’d 2020 SCC 1, [2020] 1 S.C.R. 3; Quebec (Attorney General) v. Canada (National Energy Board), [1994] 1 S.C.R. 159; Rio Hotel Ltd. v. New Brunswick (Liquor Licensing Board), [1987] 2 S.C.R. 59; Multiple Access Ltd. v. McCutcheon, [1982] 2 S.C.R. 161; Bell Canada v. Quebec (Commission de la santé et de la sécurité du travail), [1988] 1 S.C.R. 749; Attorney General of Quebec v. IMTT-Québec inc., 2019 QCCA 1598, 79 Admin. L.R. (6th) 1; 114957 Canada Ltée (Spraytech, Société d’arrosage) v. Hudson (Town), 2001 SCC 40, [2001] 2 S.C.R. 241; R. v. Crown Zellerbach Canada Ltd., [1988] 1 S.C.R. 401; Interprovincial Co-operatives Ltd. v. The Queen, [1976] 1 S.C.R. 477; Gould v. Yukon Order of Pioneers, [1996] 1 S.C.R. 571; Canadian Broadcasting Corp. v. SODRAC 2003 Inc., 2015 SCC 57, [2015] 3 S.C.R. 615; Krayzel Corp. v. Equitable Trust Co., 2016 SCC 18, [2016] 1 S.C.R. 273; R. v. Hinchey, [1996] 3 S.C.R. 1128; R. v. Khill, 2021 SCC 37; Fowler v. The Queen, [1980] 2 S.C.R. 213; Delgamuukw v. British Columbia, [1997] 3 S.C.R. 1010; Attorney‑General for Alberta v. Attorney‑General for Canada, [1947] A.C. 503; Harper v. Canada (Attorney General), 2004 SCC 33, [2004] 1 S.C.R. 827; Palmer v. The Queen, [1980] 1 S.C.R. 759; Reference re Upper Churchill Water Rights Reversion Act, [1984] 1 S.C.R. 297. By Karakatsanis and Jamal JJ. (dissenting in part) Canadian Western Bank v. Alberta, 2007 SCC 22, [2007] 2 S.C.R. 3; Canadian Broadcasting Corp. v. Quebec Police Commission, [1979] 2 S.C.R. 618; Reference re The Far

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Reference re Impact Assessment Act

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