Alberta’s Court of Appeal has ruled that the federal government’s Impact Assessment Act remains unconstitutional because it infringes on provincial jurisdiction, despite Ottawa’s changes to the act in response to a previous Supreme Court ruling.
The appeals court released its decision on Oct. 9, finding that the federal government still has too much authority to regulate and potentially block major provincial projects, including those involving natural resources.
The court also said that even though Ottawa modified the law—originally introduced as Bill C-69 and dubbed by critics as the “No More Pipelines Act”—after the Supreme Court found much of it unconstitutional in 2023, the updated Impact Assessment Act (IAA) still infringes on provincial jurisdiction.
Four of five judges ruled that the IAA’s “designated projects” provisions and regulations exceeded federal constitutional authority, except where they applied to federal undertakings.
The government introduced legislation to narrow parts of the law following the Supreme Court’s 2023 ruling. However, the Alberta court found that the amendments did not adequately restrict Ottawa’s powers to matters within federal jurisdiction. The judges concluded that Ottawa can still make decisions based on broad environmental, health, social, and economic considerations, including matters under provincial authority.
The court’s fundamental concern was that Ottawa could regulate an entire provincial project instead of limiting its decisions to effects within federal jurisdiction.
The ruling comes as Ottawa and Alberta have signed an agreement to facilitate the construction of a new oil pipeline to the West Coast. Earlier this month, the Pacific Link pipeline project became the first to receive a national interest designation under Ottawa’s new Building Canada Act.
Ottawa has also signed agreements with several provinces to establish frameworks for streamlining federal and provincial impact assessments for major projects.
Federal Authority
The IAA, enacted in 2019, established a federal process for reviewing major projects and their environmental, health, social, and economic effects. Projects subjected to the legislation must undergo planning, impact assessment, and federal decision-making processes before receiving authorization to proceed.
Some provinces, including Alberta and Saskatchewan, objected to the legislation, saying it infringes on provincial jurisdiction and effectively makes major pipeline projects impossible due to the regulatory burden.
In October 2023, the Supreme Court of Canada ruled that the legislation’s designated-projects section was unconstitutional because it allowed Ottawa to decide on matters beyond its jurisdiction. However, the Supreme Court upheld separate provisions governing projects that federal authorities carried out on federal lands or outside Canada.
Parliament responded in June 2024 by amending the legislation to focus more on adverse effects within federal jurisdiction. Alberta subsequently referred the amended law to its Court of Appeal in November 2024, questioning whether the changes had resolved the constitutional problems.
The Alberta court heard arguments from Feb. 24 to 26, 2026.
The court noted that Alberta maintained that the amendments had not meaningfully changed the law because Ottawa could still prevent provincial projects from proceeding or determine whether they were justified in the public interest.
The federal government argued that Parliament had addressed the constitutional concerns that the Supreme Court identified and that the amended legislation fell within its jurisdiction.
Project Restrictions
Section 7 of the amended legislation still restricts certain activities associated with designated projects that may cause adverse effects within federal jurisdiction, the judges said. They observed that most major projects could trigger these restrictions, even with the new threshold requiring effects to be more than negligible.
The judges warned that the legislation could allow Ottawa to regulate a whole project, rather than its federal effects, potentially resulting in conditions or indefinite prohibitions affecting provincial matters.
The court used a hypothetical mining project to illustrate its concerns. Even where the federal government’s legitimate interest involved protecting fisheries, broader considerations about the project’s overall sustainability could influence whether it was allowed to proceed.
The judges said this could allow federal decision-makers to prevent an otherwise provincially regulated project from proceeding based on considerations outside federal jurisdiction.
The majority also noted that the federal cabinet could expand certain categories of environmental, health, social, or economic matters covered by the legislation through regulations, without another act of Parliament.
The federal government argued that section 7 could be removed if the court found it unconstitutional.
The majority rejected that solution, finding that other provisions would continue to allow excessive federal regulation of provincial projects.
Dissenting Opinion
Justice Kevin Feehan dissented, concluding that Parliament’s amendments sufficiently addressed the earlier constitutional problems and that the legislation fell within federal jurisdiction.
Feehan said Ottawa had made extensive changes in response to the Supreme Court’s concerns. He also noted that the Supreme Court recognized Ottawa’s authority to assess federal effects arising from provincial projects, provided federal regulation remained focused on matters within Parliament’s jurisdiction.
Feehan concluded that the amended legislation met those constitutional requirements and would have upheld it.
Meanwhile, the majority did not find that Ottawa has no authority to assess environmental impacts from provincial projects. Federal environmental assessments remain constitutionally permissible when properly tied to federal powers.
The decision also does not invalidate every part of the IAA. The court’s findings concerned the designated-projects scheme and its regulations, while the separate provisions dealing with federal projects remain constitutionally valid.
The ruling is a reference opinion on the constitutionality of the amended legislation, not a decision on the approval or cancellation of a particular project.
The Canadian Press contributed to this report.
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