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The Supreme Court of Canada ruled Friday that Ottawa has overstepped its constitutional authority in how it regulates major resource projects in Canada, throwing the sector into deep uncertainty as companies wait for clarity from the federal government in its legislative response.
Since 2019, Ottawa, under the Impact Assessment Act, has had broad authority to approve or deny large-scale mining, oil and gas and pipeline projects in Canada on environmental grounds. Alberta, which wants to see oil and gas projects approved at a faster clip, won a legal case in a provincial court in 2022, challenging the constitutionality of the act. That ruling was subsequently appealed by Ottawa to the Supreme Court.
On Friday, the court largely backed the ruling from the provincial Court of Appeal. In a 5-2 non-binding opinion, the top court ruled that Ottawa’s current powers to police the resource sector go above and beyond what is allowed under the Constitution.
Since the ruling was in a reference case, one in which a province asked for an opinion, it is considered advisory. However, such rulings from the Supreme Court are taken seriously by government and will shape impending legislative changes.
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