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CALGARY – The Alberta Court of Appeal has now for a second time concluded that the federal “No More Pipelines” law, the Impact Assessment Act, is an unconstitutional violation of the federal division of powers. The case Reference Re Impact Assessment Act, 2026 ABCA 320 was the second challenge to the federal legislation brought by the Alberta government.

The original version of law was held to be unconstitutional by the Supreme Court of Canada in Reference Re Impact Assessment Act, 2023 SCC 23. In that 5–2 decision, the Court concluded that the federal impact assessment scheme was largely unconstitutional because it exceeded Parliament’s jurisdiction and intruded into areas of provincial authority. The federal government responded by making some minor amendments to the law, and the new version of the law was challenged a second time in this case.

In this second decision, the Alberta Court of Appeal concluded that although Parliament has taken steps to address problems identified by the Supreme Court, certain aspects of the “designated projects” portion of the IAA scheme continue to undermine the constitutionality of that part of the legislation. Most importantly, the subject areas outlined in the definition of “adverse effects within federal jurisdiction” exceed the scope of federal heads of power, and the decision-making power continues to allow regulation of a project based on non-federal concerns. Therefore, the designated projects part of the IAA and the Regulations are unconstitutional, except insofar as they apply to federal undertakings.

The Canadian Constitution Foundation (CCF) intervened in this second legal challenge to argue that leaving the IAA in place could seriously weaken Canada’s constitutional division of powers and undermine key principles of federalism, including the principle that each matter belongs exclusively to one order of government. Maintaining clear boundaries between federal and provincial jurisdiction is essential to upholding the rule of law and democratic accountability.

The majority of the Court accepted several of the CCF’s central constitutional arguments. Most significantly, it agreed that the amended IAA continues to permit the federal government to regulate provincial projects as projects in their entirety, rather than confining federal oversight to matters that fall within federal jurisdiction. The majority of the Court held that, so long as there is a federal “hook”, the legislation allows federal regulators to exercise project-wide authority over undertakings that are otherwise primarily provincial in nature. The majority of the Court also accepted that the amendments did not meaningfully alter the substance of the scheme and failed to resolve its fundamental constitutional defect. The majority further concluded that the Act’s provisions respecting impacts on Indigenous peoples extend beyond the proper scope of federal jurisdiction, confirming that neither section 91(24) nor the Crown’s obligations under section 35 of the Constitution displace the division of powers. The majority of the Court additionally found that the Act’s new “non-negligible” threshold does not meaningfully limit the projects captured by the legislation and that the amended public-interest decision-making process continues to permit non-federal considerations to drive federal regulatory decisions. Together, these findings reflect the CCF’s core submission that Parliament cannot rely on a limited federal interest as a basis to regulate provincially regulated projects as a whole.

“Ottawa’s attempt to sidestep the Constitution has been defeated once again,” said Christine Van Geyn, Interim Executive Director of the CCF. “For the second time, the courts have rejected the federal government’s attempt to claim powers that belong to the provinces. This is a major victory for Canadian federalism and a powerful affirmation of the constitutional limits on government power.”

“The Court accepted the central principle advanced by the CCF: federal legislation may address the federal effects of a provincial project, but it cannot use those effects as a constitutional ‘hook’ to regulate the project as a whole,” said Heather L. Treacy, K.C. of DLA Piper (Canada) LLP. “The decision reinforces the requirement that federal legislation be carefully confined to matters within Parliament’s jurisdiction.”

The CCF was represented in this case by Heather L. Treacy, K.C., Joshua A. Jantzi, Aziz Aboudheir and Marle Riley of DLA Piper (Canada) LLP.