The Supreme Court of Canada ruled by a 5-2 majority Friday that the federal government’s Impact Assessment Act (IAA) and its accompanying regulations are partially unconstitutional, as they empower the federal government to create environmental regulations that should have been within provincial jurisdictions. The majority found that the IAA’s method of designating projects for an environmental assessment is ultra vires, outside of federal jurisdiction.

The IAA requires environmental assessments from Canada’s Impact Assessment Agency to be performed before certain projects that can affect the environment begin.

According to Chief Justice Richard Wagner’s judgment—joined by Justices Suzanne Côté, Malcolm Rowe, Sheilah Martin and Nicholas Kasirer—the IAA does not clearly formulate the regulatory scheme’s decision-making mechanism. The failure to specify how the IAA’s assessment factors affect the assessment process causes the mechanism to lose focus on federal impacts.

Additionally, the majority found the phrase “effects within federal jurisdiction” within the act grants the federal government an overly broad power that violates the separation of powers doctrine in the Canadian Constitution. The justices stated the clause captures an unlimited range of interprovincial environmental changes, including greenhouse gas emissions. In other words, greenhouse gas emissions can be a basis that renders most, if not all, projects to be subject to the IAA assessment process.

Justices Andromache Karakatsanis and Mahmud Jamal said in their dissent that the environment itself is diffuse and is the responsibility of governments at all levels. They contend that the broad definitions adopted in the IAA provide a transparent information-gathering and decision-making process for project assessments. Further, Justices Karakatsanis and Jamal say that courts should examine individual cases where the federal government attempts to regulate projects that are solely within the provincial jurisdiction.

The majority only overturned the Alberta Court of Appeal decision partially and upheld the constitutionality of the part of the IAA that only deals with projects carried out or financed by federal authorities on federal lands or outside Canada.

Although this court ruling is an advisory opinion that does not render the IAA being struck down automatically, the federal Environment Minister Steven Guilbeault said Parliament would amend the legislation accordingly.

The IAA is not without other controversies. Ecojustice, a Canadian environmental group in 2021 criticized the IAA for its lack of enforceable follow-up mechanisms and the continuous perpetration of harms against indigenous communities.