Canada's Supreme Court dealt a blow to Prime Minister Justin Trudeau's government on Friday by ruling that a federal law assessing how infrastructure projects such as coal mines and oil sands plants impact the environment is largely unconstitutional.
The decision is a victory for Alberta, Canada's main fossil fuel-producing province, which opposed the Impact Assessment Act (IAA), formerly known as Bill C-69, on the grounds it gave Ottawa too much power to kill natural resource projects.
In Canada, natural resources projects mostly fall under provincial jurisdiction, while transport and communications projects that cross provincial boundaries, such as railways or pipelines, are federal.
"This is a significant setback for the federal government," said David Wright, a law professor at the University of Calgary.
"The court has said the federal government can enact environmental assessment legislation but the way they went about it, for most of this law, goes too far."
The Supreme Court said the federal government had over-reached its authority by making the scope of the IAA too broad and including, or "designating," major projects that typically fall under provincial jurisdiction.
"Parliament has plainly overstepped its constitutional competence in enacting this designated projects scheme," Chief Justice Richard Wagner wrote in the 5-2 majority ruling.
The IAA was drafted by Trudeau's Liberal government in a bid to streamline and restore trust in the environmental approval process for major projects. It was passed by the Canadian parliament in 2019.
"We will now take this back and work quickly to improve the legislation through Parliament," federal Environment Minister Steven Guilbeault told a news conference.
"Our immediate priority will be to provide guidance to or many stakeholders and Indigenous partners to ensure as much predictability as possible for projects affected."
The court case is the latest flashpoint between the federal Liberals and Alberta's conservative provincial government, whose Premier Danielle Smith has clashed repeatedly with Trudeau over climate policies.
"Alberta wins! Canada wins!" Smith wrote on social media.
Industry associations also welcomed the ruling.
"We are delighted with the decision. This is a big win for provincial jurisdiction over development of its own resources," said Mike Martens, president of the Independent Contractors and Businesses Association Alberta.
Major proposed projects in Alberta that fall under the IAA include Suncor Energy's (SU.TO) plan to expand its oil sands Base Mine, and privately held Coalspur Mine Ltd's Vista coal mine expansion.
Last year, the federal government warned Suncor the environmental impact from expanding Base Mine would be "unacceptable" under the IAA because expected carbon emissions were too high.
Suncor did not immediately respond to a request for comment.
There are currently 23 projects in the federal impact assessment process under the IAA. Eight final decisions have been issued allowing projects to move forward.
