In 2003, Insite was federally granted a legal exemption from the Controlled Drugs and Substances Act (CDSA).  Health Canada granted Vancouver Coastal Health a three year exemption under Section 56 of the CDSA in June of that year to establish and run the supervised injection site as a scientific research pilot project.  Insite’s exemption under the CDSA has been extended twice: once in September of 2006, and also in October of 2007.

Insite, although supported by the City of Vancouver, The Province of British Columbia, Vancouver Coastal Health Authority, the Vancouver Police Department and a wide range of public health organizations has not received support from the current Government of Canada.

Despite the overwhelming evidence that Insite is a positive intervention and a valuable public health service the Conservative government has openly opposed Insite and harm reduction policies. In September of 2006 the government extended the exemption from the CDSA and Insite was allowed to operate for an additional 15 months. When it appeared that the federal government would not approve a continuing  exemption for Insite to operate the issue of a legal injection site in Vancouver was brought to the Supreme Court of British Columbia. In April of 2008 the Portland Hotel Society and the Vancouver Area Network of Drug Users took the federal government to court seeking further exemption (and therefore the continued functioning) of Insite (see case PHS Community Services Society v. Attorney General of Canada 2008 BCSC 661). Their argument consisted of three major claims; first, that Insite’s operation is health care based, and that this authority lies in the hands of the Province of British Columbia, and not under the Federal Government’s jurisdiction. Secondly, that in the argument that the federal constitutional power overrules provincial law with respect to criminal law, it does not have the power to interfere with provincial constitutional law when it concerns health care. And thirdly, the sections of the CDSA that render Insite illegal are unconstitutional because they deprived drug addicts to health care at the safe injection site and therefore violate Section 7 of the Charter of Rights and Freedoms.

The B.C. Supreme Court ruled, in May 2008, that the federal government does not have the authority to close Insite and that its efforts to do so, do infringe on Section 7 of the Charter of Rights and Freedoms.  The judge therefore granted Insite another exemption, valid until June 30, 2009.  Furthermore, he gave the federal government the same deadline to amend the country’s drug laws to allow the use of drugs for medical purposes when it is associated with a health care research project or study.   The federal government appealed this decision and in April of 2009 to the B.C. Court of Appeal.  In a 2-1 decision the B.C. Court of Appeal denied the appeal.  The majority found that Insite is a health-care service, and as a result falls under provincial jurisdiction:
"The provision of health-care services is what makes a hospital a hospital, what makes health care a provincially regulated activity.  It is the indisputable intrusion of the federal government into the provision of medical services at the level of doctor and patient that is happening at Insite. Could Parliament legislate to effectively prohibit a doctor from using a scalpel?"  - Justice Huddart

The government can still appeal the decision to the Supreme Court of Canada.  Meanwhile Insite continues to serve people who inject drugs in the Downtown Eastside of Vancouver.  The decision also opens up the possibility that safe injection sites could open in other provinces, or that similar harm reduction strategies such as safe inhalation rooms could enter the picture.