Environmental Law - SCC

The Attorney General of Canada appealed from the Alberta Court of Appeal's ruling that the federal Impact Assessment Act and Physical Activities Regulations were entirely ultra vires Parliament.

The Supreme Court allowed the appeal in part, holding that the designated projects scheme is unconstitutional because it is not in pith and substance directed at regulating effects within federal jurisdiction — those effects do not drive the scheme's decision-making functions — and because the defined term 'effects within federal jurisdiction' does not align with federal legislative jurisdiction.

However, the secondary scheme in ss. 81 to 91 of the IAA, which governs projects on federal lands or outside Canada, was found to be clearly intra vires and severable.

The dissent would have upheld the entire legislation as validly directed at assessing and regulating adverse federal effects.

Three provincial appellants challenged the constitutionality of the federal Greenhouse Gas Pollution Pricing Act, which established minimum national standards of greenhouse gas price stringency operating as a backstop to provincial pricing systems.

The courts below were divided, with the Saskatchewan and Ontario Courts of Appeal upholding the Act while the Alberta Court of Appeal struck it down.

A 6-3 majority of the Supreme Court held that the Act's pith and substance is the establishment of minimum national standards of greenhouse gas price stringency to reduce greenhouse gas emissions, and that this matter falls within Parliament's jurisdiction under the national concern branch of the peace, order, and good government power.

The majority further held that the fuel and excess emissions charges are constitutionally valid regulatory charges rather than taxes.

The appeals by the Attorneys General of Saskatchewan and Ontario were dismissed and the appeal by the Attorney General of British Columbia was allowed, with Côté J. dissenting in part and Brown and Rowe JJ. fully dissenting.

The appellant land developer brought a $6 million breach of contract action against a not-for-profit environmental association and its members, alleging that the association's president had breached a settlement agreement by testifying before the Ontario Municipal Board regarding the ecological impact of the appellant's proposed subdivision development.

The respondents brought a pre-trial motion under s. 137.1 of the Courts of Justice Act to dismiss the action as a strategic lawsuit against public participation.

The Court unanimously dismissed the appeal, holding that the respondents met the threshold burden under s. 137.1(3) and that the appellant failed to satisfy either the merits-based hurdle under s. 137.1(4)(a) or the public interest weighing exercise under s. 137.1(4)(b).

The Court provided comprehensive guidance on the proper interpretation and application of Ontario's anti-SLAPP framework, clarifying the standards of 'satisfies,' 'arises from,' 'substantial merit,' and the public interest weighing exercise.

The decision affirms that freedom of expression and public participation in democratic processes are fundamental values that the anti-SLAPP legislation was enacted to protect.

The Province of British Columbia referred the constitutionality of proposed amendments to the Environmental Management Act to the British Columbia Court of Appeal.

The proposed amendments would have introduced a hazardous substance permit system regulating the presence of heavy oil in the province, directly impacting the Trans Mountain pipeline expansion.

The BCCA held that the proposed amendments fell outside provincial legislative authority because their pith and substance — placing conditions on, and if necessary prohibiting, carriage of heavy oil through an interprovincial undertaking — related to Parliament's jurisdiction over federal undertakings under s. 92(10) of the Constitution Act, 1867.

The Supreme Court of Canada unanimously dismissed the appeal, adopting the reasons of the Court of Appeal for British Columbia.

Three cross-appeals arose from the interpretation of a 1985 environmental indemnity granted by the Province of Ontario to former pulp mill owners, their successors and assigns, in the context of the settlement of mercury contamination litigation brought by two First Nations.

The majority held that the indemnity did not cover first party regulatory compliance orders, as the motion judge made palpable and overriding factual errors, and the indemnity, properly read as a whole, was intended to cover only third party pollution claims.

The appeal of the Province was allowed; the appeals of the corporate successors were dismissed.

The dissent (Côté, Brown and Rowe JJ.) would have dismissed the Province's appeal and allowed the appeal of Resolute, concluding the indemnity covered the Director's remediation order, that the fettering doctrine did not render the indemnity unenforceable, and that Resolute — as Great Lakes' corporate successor — was entitled to the indemnity's protection, but Weyerhaeuser was not, as neither an assignee nor a corporate successor of Great Lakes or Reed.

The appellants sought leave to appeal a Quebec Court of Appeal decision that denied leave to appeal a Superior Court authorization of a class action against automobile manufacturers for punitive damages arising from non-compliance with environmental standards.

The Superior Court had authorized the class action with respect to punitive damages only, declining to authorize the compensatory damages claim.

A majority of the Supreme Court found the Court of Appeal judge did not err in exercising her discretion to deny leave.

The minority would have granted leave on the basis that a question of law warranting appellate review had been raised, and would have remanded the matter to the Court of Appeal for a decision on the merits.

The appellants, a provincial energy regulator and an orphan well association, appealed from a decision holding that provincial oil and gas licensing obligations could not be enforced against a trustee in bankruptcy because they conflicted with the federal Bankruptcy and Insolvency Act.

The majority of the Supreme Court allowed the appeal, holding that the regulator's use of its statutory powers to enforce end-of-life abandonment and reclamation obligations did not create an operational conflict or frustration of purpose with the BIA.

The majority found that s. 14.06(4) of the BIA shields trustees only from personal liability, not the liability of the bankrupt estate, and that a bona fide public regulator enforcing public duties is not a creditor asserting a claim provable in bankruptcy.

Moldaver and Côté JJ. dissented, finding a genuine operational conflict and frustration of purpose under both branches of the paramountcy test, and that the Abitibi three-part test for provable claims was satisfied.

The appellant challenged a conviction for failing to report a blasting incident that propelled fly-rock into the air and damaged nearby property.

The Court held that the reporting duty under the Environmental Protection Act is triggered where a contaminant is discharged out of the normal course of events and there is or may be an adverse effect, without requiring proof of actual impairment to the natural environment.

It emphasized the statute’s broad remedial purpose and confirmed that each branch of the adverse-effect definition independently engages the duty to notify the regulator.

On the facts, the discharge caused significant property damage and potential serious harm, requiring immediate reporting.

The appeal was dismissed.

In an insolvency appeal, the Court addressed when environmental remediation orders issued by a provincial regulator constitute provable monetary claims under the Companies’ Creditors Arrangement Act.

The majority held that orders not framed in monetary terms may still be compromised where the statutory and factual context shows sufficient certainty that compliance will ripen into a financial liability to the regulator.

Applying that framework, the majority found the remediation orders fell within the claims process and dismissed the appeal.

The dissenting judges would have required evidence approaching certainty that the province would itself perform remediation before treating most orders as contingent monetary claims.