On Oct. 9, the Alberta Court of Appeal ruled that the federal Impact Assessment Act remains unconstitutional, even after Parliament amended it in response to the Supreme Court of Canada's 2023 decision. The ruling is the latest chapter in a long-running dispute over how major projects are assessed in Canada, and it raises immediate questions about the federal government's next move. The court found that the amended statute still gives Ottawa overly broad powers over projects that fall within provincial jurisdiction, including the ability to regulate a project as a whole based on non-federal concerns. That is a significant legal conclusion, but it is important to be precise about what the decision does and does not say.

According to CBC News and Global News, the decision was issued Oct. 9. The factual summary of the ruling is straightforward: the Alberta Court of Appeal concluded that the amended Impact Assessment Act is still unconstitutional. The court's central problem is with the scope of federal authority. In the court's view, the act allows the federal government to reach into projects that are otherwise provincially regulated and subject them to a federal assessment based on concerns that are not truly federal. The court also found that the statutory definition of "adverse effects within federal jurisdiction" exceeds the federal heads of power.

The decision did not come out of nowhere. In 2023, the Supreme Court of Canada struck down much of the original Impact Assessment Act after the federal government asked the court to review its constitutionality. That reference decision was widely read as a warning that Ottawa had overreached. The federal government responded by amending the law in an effort to bring it into line with the Supreme Court's reasons. The Alberta Court of Appeal has now concluded that those amendments did not go far enough. This is a finding about the law as written, not about the motives of the people who drafted it.

The core issue is federalism. Canada's Constitution divides legislative authority between Parliament and the provincial legislatures. Environmental assessment does not appear as a single head of power in the Constitution, so federal environmental legislation must be anchored in other federal powers. The Alberta Court of Appeal's ruling suggests that the amended Impact Assessment Act is not sufficiently anchored. The court found that the act gives the federal government the ability to regulate a project as a whole based on non-federal concerns. That is a classic federalism problem: a law that is nominally about federal effects but actually reaches beyond them.

The phrase "adverse effects within federal jurisdiction" is central to the court's analysis. Under the amended act, a project may be subject to federal assessment if it could cause adverse effects within federal jurisdiction. The court found that this definition is too broad. It exceeds the federal heads of power, in the court's view, because it captures projects and effects that are not genuinely connected to federal responsibilities. This is not a minor drafting issue. The definition is the hook that brings projects into the federal assessment process. If the hook is too wide, the entire regime is constitutionally suspect.

The practical stakes are considerable. The Impact Assessment Act is the main federal tool for reviewing major projects such as mines, ports, and pipelines. When a project triggers a federal assessment, it can face additional review, conditions, and delays on top of provincial requirements. The Alberta court's ruling does not necessarily mean those projects will now escape environmental oversight. It means the legal basis for the federal layer of that oversight is in doubt. For project proponents, regulators, and investors, that uncertainty is itself a cost. For governments, it is a problem that will need to be resolved through legislation or litigation.

It is worth pausing on the distinction between the constitutional question and the policy question. The Alberta Court of Appeal was not asked to decide whether environmental assessment is good policy. It was asked to decide whether the federal law fits within the Constitution. A court can strike down a law because it exceeds federal jurisdiction even if the law's purpose is widely supported. That is a feature of federalism, not a bug. The ruling is about process and jurisdiction, not about whether environmental harm should be taken seriously. Those are separate debates, and they should not be conflated.

The decision also highlights the limits of legislative repair. After the Supreme Court's 2023 ruling, the federal government had an opportunity to redraft the Impact Assessment Act in a way that would survive constitutional scrutiny. The Alberta Court of Appeal has now found that the amendments were not enough. This is a reminder that when a court identifies a structural problem, changing a few words may not solve it. The problem may lie in the architecture of the law itself. The federal government may need to rethink the basic design of its assessment regime, not just adjust the definitions.

What happens next is not yet clear. The federal government has options. It can seek leave to appeal to the Supreme Court of Canada, which is the normal next step when a provincial appellate court strikes down a federal law. It can also return to the drawing board and draft a new version of the law. Or it can attempt to reach administrative arrangements with provinces to avoid the constitutional conflict. Each option carries tradeoffs. An appeal would prolong uncertainty. A redraft would take time and would still need to satisfy the courts. An intergovernmental approach would require cooperation that has been in short supply in recent years.

An appeal would be the most direct way to resolve the disagreement between the Alberta Court of Appeal and the federal government's view of its own law. But appeals take time, and the Supreme Court has already weighed in once. If the federal government believes the Alberta court misapplied the Supreme Court's 2023 decision, an appeal would give it a chance to say so. If it believes the Alberta court is right, an appeal would be pointless. The decision to appeal is therefore not just a legal judgment; it is also a political and strategic judgment about how to manage the conflict.

Redrafting the law would be a more substantial undertaking. The federal government would need to design an assessment regime that is genuinely anchored in federal heads of power. That is easier said than done. The Constitution does not give Parliament a general power to protect the environment. Federal environmental legislation must be justified by specific federal powers that are enumerated in the Constitution. The Alberta Court of Appeal's ruling suggests that the current definition of "adverse effects within federal jurisdiction" reaches too far beyond those anchors. A redraft would need to be narrower, more precise, and more clearly tied to actual federal effects.

There is also a third path: cooperation. The federal government and Alberta could attempt to negotiate an arrangement under which projects are assessed once, by the level of government with the clearest constitutional authority, while still accounting for federal interests. Such arrangements are possible in principle, but they depend on trust and on a shared understanding of what counts as a federal effect. The Alberta court's ruling may make that path more attractive, but it does not make it easier. The same disagreements that produced this litigation are likely to complicate any negotiated solution.

The ruling is also important for what it does not say. The Alberta Court of Appeal did not hold that the federal government has no role in assessing major projects. It did not hold that environmental assessment is unconstitutional. It held that this particular law, as amended, exceeds the federal government's constitutional authority. That is a narrower conclusion, but it is still a serious one. It means the federal government cannot simply continue as if the 2023 Supreme Court decision had settled the matter. The legal architecture of the Impact Assessment Act remains unstable.

For the public, the most important takeaway may be the uncertainty. Major projects are long-term investments. They require regulatory clarity. When a court strikes down a federal statute, that clarity disappears. Companies may hesitate to commit to projects that could be subject to a shifting legal regime. Governments may hesitate to make decisions that could be overturned. The Alberta court's ruling is therefore not just a legal event. It is an institutional event with practical consequences for how projects are planned, reviewed, and approved in Canada.

The decision also illustrates the role of courts in refereeing federalism. In Canada, there is no single government with authority over everything. The Constitution assigns different responsibilities to different levels of government, and courts are sometimes asked to resolve disputes about where those lines are drawn. That is what happened here. The Alberta Court of Appeal was asked to determine whether the federal Impact Assessment Act, as amended, respects the constitutional division of powers. Its answer was no. That answer is now part of the record, and it will shape the next round of legislative and legal activity.

At the same time, it is important not to overstate the immediate effect of the ruling. The Alberta Court of Appeal is one court. Its decision is significant, but it is not the Supreme Court of Canada. The federal government may appeal, and the Supreme Court may disagree with the Alberta court's analysis. Until the federal government decides whether to appeal, or until a higher court rules, the legal status of the amended Impact Assessment Act remains in flux. That is the nature of constitutional litigation. It is a process, and it takes time.

From a process perspective, the ruling is a reminder that amendments are not a substitute for constitutional design. The federal government amended the Impact Assessment Act after the Supreme Court's 2023 decision, but the Alberta Court of Appeal has found that the amendments did not address the core problem. The problem is not the definition of a particular term or the wording of a particular provision. The problem is the scope of federal power over projects that are otherwise provincial. That is a structural issue, and it requires a structural solution.

The broader policy question remains unresolved. Canada still needs a way to assess the environmental effects of major projects. It still needs to respect the constitutional division of powers. It still needs to give project proponents and communities a predictable process. The Alberta Court of Appeal's ruling does not answer those questions. It narrows the options and forces a choice. The federal government can appeal, redraft, or negotiate. What it cannot do is ignore the court's reasoning. The law, as written, has been found unconstitutional. That is the starting point for whatever comes next.