The environmental divide

The first salvo culminated last year when the Supreme Court of Canada ruled that the federal Greenhouse Gas Pollution Pricing Act was constitutional.  Next up is Canada's appeal of the Alberta Court of Appeal's ruling in May declaring the federal Impact Assessment Act case ultra vires.  And with the introduction by Scott Moe's government of the Saskatchewan First Act, intended to reassert the province's jurisdiction over its natural resources, legal experts are warning of more legal challenges to come.

"It feels like it's more common than not that we've had federal-provincial conflicts, but not as many division-of-powers-type conflicts," says Andrew Leach, a professor of economics and law at the University of Alberta, and an expert on division of powers arguments. "The exception would be the late-70s-early-80s around provincial legislation to try to capture more of the rents from the oil crisis, and the federal NEP-type legislation that was challenged at the Supreme Court."

Nathalie Chalifour, a law professor at the University of Ottawa and co-director of the Centre for Environmental Law and Global Sustainability, says there is a decades-long history of division-of-powers cases in environmental matters. But the politicization surrounding references to the GGPPA has more to do with governments reaching critical decision points about climate change choices, while resource-rich provinces are concerned about their ability to bring those resources to market.

"It's becoming increasingly clear that we need to de-carbonize, and that obviously puts fossil fuels in a difficult position," Chalifour says. "What we're seeing in the Impact Assessment Act reference and the GGPPA reference are indications of those challenges coming to a head politically, but in the courts as well."

"Policies like a clean electricity standard and a cap on oil and gas emissions are driving into that territory where the provincial jurisdiction to manage its resources and electricity start to be pretty small," Leach says. 

He explains that half a century ago, the battles were about clarifying and expanding provincial jurisdictions while maintaining federal paramountcy. But what emerged were "almost parallel abilities for the provinces to legislate in relation to trade of resources and to tax resources alongside the federal government," he says. "This [recent challenge] feels like a more fundamental conflict of federal legislation in relation to climate change crashing into provincial discretion over natural resources."

It's one of the main arguments the Alberta Court of Appeal picked up in its rulings on the Impact Assessment Act and the GPPA before it.

"I suspect what you'll see from the Supreme Court on the IAA is that when you legislate at a 30,000-foot level that either affects trade or commerce as a whole, or affects matters that meet the national concern test that [Chief Justice Richard] Wagner modified in the GGPPA reference." But the threshold question—about national importance—mostly didn't involve the federal government legislating on business transactions or a factory's technology choices.

"When you think about the IAA, or clean electricity or the oil sands emissions cap, you're getting into the federal government regulating the performance of facilities or industries, or those decisions that would have been provincial," Leach adds.

According to Chalifour, the climate emergency distinguishes the current cases from past ones.

"We know every country needs to do its part to reduce greenhouse gas emissions, and we're one of the G7 countries for whom our emissions have increased where others haven't increased as much as ours have," Chalifour says. "If we're under the gun, we need to do something, so it's coming to a head. We obviously have a much more politicized landscape in Canada, and climate policy is unfortunately highly partisan, much more than in some jurisdictions. So we are seeing the courts as a space to challenge federal leadership on climate change."

Former environment minister Catherine McKenna, who oversaw the implementation of the Pan-Canadian Framework on Clean Growth and Climate Change and is now principal at Climate & Nature Solutions, doesn't believe the current flashpoints are really about the division of powers.

"The environment is a shared jurisdiction," McKenna says. "It's really about who wants to stand for climate action and who doesn't. The reason I say that is because when you look at the Conservatives under Brian Mulroney, they cared about the environment and climate change," she adds, citing his government's leadership in getting the Montreal Protocol, an international treaty designed to protect the ozone layer, signed in 1987.

McKenna doesn't dispute that governments need to be mindful of their jurisdictions, but notes that there were "four provinces that had a price on pollution, and we built on that," McKenna says about her work on putting a price on carbon pollution. "Alberta and BC had a direct price, and Ontario and Quebec were cap-and-trade. I think it's evolved. It's hard to win an election without a serious climate plan, and this jurisdictional discussion is risky because people aren't dumb. They want politicians to focus on real issues, and climate change is a real issue."

Leach suspects the Supreme Court will rule against Ottawa if it grants itself a veto or all-pervasive power in such a manner there is nothing left for the provinces to manage.

"The question to me is, where do they find that line?" Leach says.

According to Chalifour, it's less about drawing lines than concentric circles because the GGPPA reference decision confirmed the presence of overlapping spheres of jurisdiction on complex policy issues like climate change.

"Rather than thinking of an actual line to be drawn, and as long as those overlapping spheres don't create a direct operational conflict so that a person or a company cannot actually comply with both federal and provincial rules at the same time—other than in that limited circumstance, both sets of laws can co-exist," Chalifour says. "That's the ideal of cooperative or flexible federalism."

But courts must draw lines, says Leach. Take the IAA reference, which raises critical questions about the constitutional exercise of federal jurisdiction on various matters, from fisheries and navigable waters to inter-provincial pollution and impacts on First Nations lands. At some point, a court will have to object to what amounts to a federal veto over any project that can cause economic and social effects within its jurisdiction.

Chalifour rejects the notion that federal rules amount to a veto, despite what the Alberta Court of Appeal ruled on the IAA, which she says evolved from its predecessor legislation, the Canadian Environmental Assessment Act (CEAA). "It's very much in the same vein," Chalifour says. 

Existing aboriginal and treaty rights under the constitution and Indigenous rights affirmed more recently under the United Nations Declaration on the Rights of Indigenous Peoples, have raised similar concerns, says Chalifour. Critics worry they afford veto powers to groups regarding their asserted rights and title. The Supreme Court has made it clear that Section 35 rights do not grant a veto. Instead, the Crown has a duty to consult aboriginal groups, where appropriate, and accommodate them regarding decisions that may affect their interests. 

Chalifour expects that the court will be careful to avoid ruling on the IAA in such a way that would bring about more centralized federal power or confirm a veto, even as it will likely uphold the law, as it did with the GGPPA. 

"I think it will be done in a very careful way that doesn't supersede ample jurisdictional space provincially to govern natural resources projects," she says. "But there is also federal space to look at the implications of those projects."

Besides, the number of projects to which the IAA applies is relatively small compared to the number of assessments under the CEAA. The IAA focuses on a few large projects, says Chalifour, which "warrant careful scrutiny from both levels of government."