Unconstitutional ‘no more pipelines act’ was product of Liberal spite


Simply doing the opposite of your detested political opponent rarely results in good public policy

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Much of the Liberal platform in 2015 was driven by a George Costanza-type desire to “do the opposite” — in this case, the contrary of whatever position Stephen Harper’s Conservative government took.

On environmental regulation, the Trudeau Liberals were itching to repeal the 2012 Canadian Environmental Assessment Act, which resulted in far fewer project reviews than had taken place under the previous regime (although many more were killed later in the process by the courts).

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The Liberal Impact Assessment Act — billed by former Alberta premier Jason Kenney as the “no-more pipelines act” — was the result.

Bill C-69 broadened the scope of the assessment process and enhanced consultations with Indigenous groups. Expanded factors taken into consideration include traditional Indigenous knowledge, the attainment of climate goals and gender-based analysis to ensure that, in the words of then environment minister Catherine McKenna, “potential impacts on women, men or gender-diverse people” were minimized.

McKenna told the House of Commons that “better rules” would protect the environment while improving investor confidence and … making the Canadian energy and resource sector more competitive”.

It hasn’t worked out that way. The government’s own energy fact book says that capital expenditure in the energy sector dropped 44 per cent between 2014 and 2021. Jack Mintz, the president’s fellow of the School of Public Policy at the University of Calgary, said the bill contributed to “the slow bleeding of Canada” and then Imperial Oil chief executive Rich Kruger (who is now CEO at Suncor) said the new regulatory regime was riddled with risk and uncertainty. “It’s our assessment that the bill is likely to increase costs and timelines,” Kruger said at the time.

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Pro-pipeline supporters rally against Bill C-69.
Pipeline supporters rally against Bill C-69, in Calgary on March 25, 2019. Photo by Jeff McIntosh/The Canadian Press

Others, like former Saskatchewan premier Brad Wall, warned that the cumulative effect of a federal carbon tax and the new regulations would heat up a Canadian unity issue that was already bubbling because of concerns about lack of pipelines.

The uncertainty over approvals certainly chilled investment and many people in Alberta believed that it was designed to sink the oil industry. The Liberals pointed out they had invested $4.5 billion to buy the Trans-Mountain pipeline but the suspicion remained that the activists in the Trudeau government believed it would be easier to meet greenhouse gas emission-reduction targets if there was less activity in the oilpatch.

Westerners have increasingly felt themselves under a sustained assault from Ottawa, resulting in a surge in separatist rhetoric that had been dormant for 40 years — ironically since the days of Pierre Trudeau’s National Energy Program.

The decision by the Supreme Court of Canada to declare parts of the Impact Assessment Act unconstitutional will go a long way toward allaying that sentiment.

Alberta’s Court of Appeal ruled in May last year that the Constitution Act of 1867 granted provinces exclusive jurisdiction over “the exploration, development, management and conservation” of their natural resources, and, as a result, the IAA was “ultra vires” — beyond the powers of Parliament.

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The SCC has agreed with that ruling in a lengthy 5–2 majority decision written by Chief Justice Richard Wagner.

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Wagner wrote that in his view Parliament has overstepped its constitutional competence when it comes to the IAA’s “designated projects” scheme — namely those projects that are not federally funded or being developed on federal land.

He wrote that he does not accept that Ottawa’s “defined effects within federal jurisdiction align with federal legislative jurisdiction.

He added that the “constitutional frailties” of the scheme are exacerbated by its “overbroad” range of impacts.

The IAA uses a “wide lens” that takes into account “all effects,” he said, not just those that impact the environment. “The risk is that projects with little or no potential for adverse federal effects will nonetheless be required to undergo an impact assessment,” he wrote.

The upshot is another headache for Justin Trudeau. His justice minister, Arif Virani, and environment minister, Steven Guilbeault, were out quickly after the decision with a statement that said they were “heartened” that the court had affirmed the federal government’s role in regulating projects. “We will take this back and work quickly to improve the legislation through Parliament,” they said.

But it took years to bring Bill C-69 into being and then shepherd it through Parliament. The court’s decision was lengthy but hardly prescriptive — it is far from clear what could be done in practice to narrow its lens to make it constitutionally compliant.

It is yet another object lesson that simply doing the opposite of your detested political opponent rarely results in good public policy.



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