How the Supreme Court dealt a blow to Trudeau's climate ambitions and what comes next

Chalk up a win for the provinces and a loss for the federal government's environmental ambitions.

In a 5-2 decision released on Friday, the Supreme Court of Canada ruled against Ottawa and in favour of arguments from provincial governments about how major projects are approved in the country.

The ruling focused on the federal government's Impact Assessment Act (IAA), which gives federal regulators the power to assess potential environmental and social impacts of various major projects, such as pipelines, power plants and airports. 

Experts say it's a setback, but not a critical blow to the federal government's environmental agenda, although it could have broader implications for other climate policies Ottawa is developing.

Meanwhile, it's a triumph for provincial autonomy.

In a nutshell, the top court took exception to the federal government overstepping its boundaries. There is also some caution about Ottawa regulating greenhouse gas emissions. 

The decision clearly states the environment is an important issue, but the federal government can't overstep its boundaries into provincial jurisdiction, such as power plants and natural resource projects.

"Environmental protection remains one of today's most pressing challenges, and Parliament has the power to enact a scheme of environmental assessment to meet this challenge, but Parliament also has the duty to act within the enduring division of powers framework laid out in the Constitution," stated Chief Justice Richard Wagner, in the written decision.

As CBC reporter Erin Collins more colloquially put it on CBC Radio, a few minutes after the decision was released, "this was really Alberta telling the feds to stay off their lawn and the local bylaw officer kind of coming by and agreeing with them."

The ruling comes at an important moment when there is a need to attract investment into the country and to build the necessary infrastructure required for a growing, low-carbon economy. At the same time, there is an increasing focus on emissions as Canada tries to meet its Paris climate goals. 

Many countries around the world are offering incentives to promote clean energy, for instance, but without an efficient permitting process, proposed projects can get bogged down.

The previous regulatory process under former Prime Minister Stephen Harper was described as too relaxed by critics, while the top court's ruling shows the system under Prime Minister Justin Trudeau went too far. Under both systems, it still takes multiple years for major projects to be approved.

The regulatory and permitting process has been in a state of flux for most of the last decade and Friday's top court ruling will no doubt cause further change.

Canada isn't the only country struggling with regulatory efficiency, according to Marla Orenstein, director of energy, environment and economy at the Canada West Foundation, a Calgary-based think-tank. She notes that the United States, the U.K., Germany and Australia all have similar issues.