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Supreme Court of Canada Silent on Environmental Regulation Cases

8 minute read

While activism and advocacy aimed at addressing the global climate crisis continues to escalate, with 2019 seeing some of the mobilization of citizens around the world demanding climate action, some governments have sought to respond. Hundreds of municipal, provincial/state, and even national governments have declared a “climate emergency” and moved to legislate in line with such declarations.

In Canada, the result is bound to be some messy mix-ups around federalism and the division of powers between federal, provincial, and municipal governments as law-makers at various levels attempt to respond to social, economic, and political pressures to take tangible steps toward addressing the climate crisis. In the federalism arena, courts are bound to be called upon to officiate, calling offside when one branch of government steps on the jurisdictional toes of another.

In this context, one would think that our Supreme Court of Canada’s careful consideration and guidance would be most welcome. Yet, in two decisions released in January 2020 (one, denying leave to appeal; the other, dismissing an appeal from the bench) Canada’s top court stayed silent on these very issues. To me this seems an odd approach for a court which observed over 20 years ago that legal measures to protect the environment “relate to a public purpose of superordinate importance”[1] and declared that “[t]he protection of the environment has become one of the major challenges of our time.”[2] Similarly, the Court has described “stewardship of the natural environment” was described as a fundamental value[3] and held:

…our common future, that of every Canadian community, depends on a healthy environment. … This Court has recognized that “(e)veryone is aware that individually and collectively, we are responsible for preserving the natural environment … environmental protection [has] emerged as a fundamental value in Canadian society”…[4]

Despite its jurisprudential record on environmental protection, the Court declined two further opportunities to weigh in on the interplay between division of powers and environmental regulation.

On January 16, 2020, in its first appeal decision of the year, the Supreme Court of Canada heard argument and released a one-sentence oral decision the same day dismissing the Province of British Columbia’s appeal in Reference re Environmental Management Act (British Columbia).[5] In a case boasting 26 intervenors taking various positions on all sides of the Reference, the Court deferred entirely to the Court of Appeal for British Columbia.

Just one week later, on January 23, 2020, the Supreme Court of Canada denied the City of Victoria’s application for leave to appeal in Canadian Plastic Bag Association v. Victoria (City),[6] a case concerning a municipal by-law prohibiting businesses from selling or providing single-use plastic bags.

Whatever the reason (or absence of reason) for the Supreme Court of Canada’s decision in both cases, we are left to look at the decision of the Court of Appeal for British Columbia in both cases for guidance on these division of powers disputes involving legal measures to protect the environment. Both decisions are summarized below.

Reference re Environmental Management Act (British Columbia), 2019 BCCA 181

On May 24, 2019, the Court of Appeal for British Columbia released its decision in Reference re Environmental Management Act (British Columbia), also known as the Bitumen Reference case, a constitutional reference by the Province of British Columbia respecting proposed legislation that would regulate interprovincial pipelines. The proposed legislation arose out of concerns about the Trans Mountain pipeline expansion, an undertaking to transport oil between British Columbia and Alberta. The legislation did not seek to prohibit the pipeline, but would impose additional regulatory steps that would be required before the project could proceed, and would possibly prohibit the flow of “heavy oils” within British Columbia’s borders.

The Province submitted a constitutional reference to the Court of Appeal, asking the court to consider the constitutionality of its proposed legislation. Specifically, it asked the court to consider whether the legislation was (i) within the legislative authority of British Columbia; (ii) applicable to hazardous substances (such as heavy oil) brought into British Columbia by interprovincial undertakings (such as pipelines); and (iii) rendered inoperative by existing federal legislation.

The Province took the position that even though the proposed legislation did regulate interprovincial undertakings, it was within its jurisdiction because it related to the environment, which can be regulated by both federal and provincial governments. Among other arguments, the Province relied on the principle of subsidiarity, or that law-making is often best achieved by the level of government closest to the affected citizens. According to the Province, the legislation was valid, it applied to interprovincial undertakings (including pipelines), and the existing federal regulatory scheme did not render its proposed legislation invalid because the schemes could operate together harmoniously.

Canada argued that the Province’s proposed legislation attempted to directly regulate interprovincial undertakings, which are a matter of exclusive federal jurisdiction. It argued that even in light of the move away from “airtight compartments” towards “flexible federalism”, the proposed legislation represented an impermissible intrusion into an area of clear federal authority. A large number of additional parties participated in the reference, including Alberta, Saskatchewan, several industry groups, and a number of First Nations, which supported the Province’s submissions and asserted their inherent legal authority to protect their lands and waters.

In an expansive decision, a five-judge panel of the Court of Appeal held that the Province did not have the authority to enact its proposed amendments to the Environmental Management Act. In the court’s view, the amendments were, in “pith and substance” related to the regulation of interprovincial activities and subject to exclusive federal jurisdiction under sections 91(29) and 92(10)(a) of the Constitution Act, 1867. The proposed amendments were therefore ultra vires provincial jurisdiction.

The Court of Appeal noted the fact of overlap does not “override or modify the separation of powers”. When the affected matter is exclusively federal, provincial law must yield.

The court considered whether the concept of “co-operative federalism” militated in favour of allowing British Columbia to regulate the flow of heavy oil within or across its borders, and noted that the Supreme Court of Canada has held that “the ‘dominant tide’ of flexible federalism” cannot sweep the allocation of powers in ss. 91 and 92 of the Constitution Act ‘out to sea.’”

The court accepted Canada’s argument that the proposed amendments were principally designed to “…frustrate the construction and operation of the TMX Project, an interprovincial undertaking whose purpose is to transport increased quantities of heavy oil produced in Alberta through BC for export overseas.”

While it acknowledged that provincial laws may regulate matters which are vital to the national interests of Canada, the court emphasized that they are not entitled to interfere with the operation of a federal undertaking.

Notably, the court did not acknowledge or discuss the submissions of any of the Indigenous intervenors or the relationship between the Crown’s law-making authority under the constitution and Indigenous legal orders.

Canadian Plastic Bag Association v. Victoria (City), 2019 BCCA 254

The appellant, Canadian Plastic Bag Association, challenged a City of Victoria by-law that would have prohibited businesses from providing or selling plastic bags to customers and would have imposed fees to be charged for paper or other reusable bags.

Under the province’s Community Charter, where a municipality seeks to adopt a bylaw, the dominant purpose of which is to protect the natural environment, the municipality must first obtain the approval of the Minister of the Environment (or satisfy one of the other conditions under section 9(3) of the Community Charter).

The City argued that it had validly adopted the bylaw under its power to regulate business, not under its power to protect the natural environment, and it therefore did not need the prior approval of the responsible Minister.

The Court of Appeal for British Columbia disagreed, allowed the appeal, and quashed the by-law. Applying the “pith and substance” analysis, the court found that the true target of the law was the consumer and the effects on the global environment caused by wasteful consumer practices. Businesses would be affected by the law but only incidentally. Therefore, the City required ministerial approval.

[1] R. v. Hydro-Québec, [1997] 3 S.C.R. 213, at para. 85.

[2] Friends of the Oldman River Society v. Canada (Minister of Transport), [1992] 1 S.C.R. 3, at p. 16.

[3] Ontario v. Canadian Pacific Ltd., [1995] 2 S.C.R. 1031, at para. 55.

[4] 114957 Canada Ltée (Spraytech, Société d’arrosage) v. Hudson (Town), [2001] 2 S.C.R. 241, 2001 SCC 40, at para. 1.

[5] Reference re Environmental Management Act, 2020 SCC 1.

[6] Corporation of the City of Victoria v. Canadian Plastic Bag Association, SCC File No.: 38828.

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