Final Report by the Task Force on Just Transition for Canadian Coal Power Workers and Communities: section 6

Call to action for a just transition

Climate change is the challenge of our time. A 2018 report of the Intergovernmental Panel on Climate Change set off alarm bells around the world and across Canada with calls for action to stop climate change.^{Footnote 2}  It is widely recognized that without concerted efforts to minimize global temperature rises, future generations will live in a much different world.

Not only is action on climate change the right thing to do, it is the smart thing to do. Global climatic shifts are already negatively impacting Canadians. More frequent and severe storms, droughts, floods, and forest fires are causing damage to homes, farms, and communities. Rising sea levels are threatening coastal communities across the country. More frequent heat waves are putting the lives of vulnerable Canadians at risk. Climate change is also putting pressure on the livelihoods of workers.

The evidence is clear: we all need to accelerate efforts to reduce greenhouse gas (GHG) emissions. Everyone and every country can, and must, participate. Acting now will help to minimize devastating impacts. Taking action on climate change is ultimately about protecting the wellbeing and security of Canadians today and for generations to come.

If implemented effectively, through a combination of policy reform and coordinated action, efforts to reduce GHG emissions can also result in new economic opportunities for Canadians. As some countries are already demonstrating, good green jobs linked to technological innovations are resulting in robust new economic sectors. Canadians have the skills, knowledge, and motivation to thrive during this transition and seize these opportunities.

Yet we cannot overlook the economic and social costs to those who have made a good living working in traditional resource sectors. Governments, along with employers and unions, must ensure that workers are not left behind as we transition to a cleaner, low-carbon economy.

What the future looks like will differ worker by worker, family by family, and community by community—but there is one common denominator. All will need new economic opportunities to replace traditional industries. A successful transition will mean good jobs, strong communities, and a bright future for workers and their families.

That is what just transition can accomplish.

Just transition is about more than supporting workers and communities affected in the short term; it requires a long-term path to prosperity.

Unions and civil society have been fighting for a global commitment to a just transition for those affected by the movement towards a low-carbon economy. The 2015 Paris Agreement, a historic international effort to reduce GHG emissions, strengthen adaptation efforts, and provide climate financing, also recognizes the need for a just transition.

Yet the Paris Agreement is only the start. It will take serious, deliberate, and ongoing effort to see it through. Over 180 Parties have ratified the Paris Agreement, including China, India, the United Kingdom, Germany, and Canada.^{Footnote 4}  Each country must do their fair share to reduce GHG emissions and support affected workers and communities.

Since coal-fired electricity is a source of significant GHG emissions, it is widely recognized that all countries will need to phase out coal-fired electricity to avoid the worst impacts of climate change.^{Footnote 5}  Analysis shows that to meet the Paris Agreement’s objectives, coal phase-out is needed no later than 2030 in the OECD and EU28, and no later than by 2050 in the rest of the world.^{Footnote 6} 

In response to economic trends, health and environmental concerns, the use of coal to generate electricity has been declining in Canada for decades.

In 2012, the Government of Canada set limits on GHG emissions from coal-fired generating stations. This decision meant that the majority of stations would close earlier than planned. In 2016, the Government of Canada made the decision to accelerate the coal phase-out, setting a 2030 deadline for all traditional units.

The 2016 decision has started to directly affect coal miners and employees of generating stations, their families, communities, and employers. It is also anticipated that the phase-out will have a ripple effect, impacting not only the workers at the generating stations and mines, but also those who work with the coal power sector, such as contractors and suppliers, railways, and ports. It may also, in some jurisdictions, be felt by electricity consumers who have relatively more affordable electricity rates from coal-fired electricity generation. Phasing out coal-fired electricity will disrupt people’s lives, cause families to experience financial stress and uncertainty, and threaten the existence of whole communities. For those most affected, taking action on climate change means risking the wellbeing of their families and communities.

The Government of Canada cannot afford to ignore the wide-ranging impacts on affected workers and communities of its actions on climate change. The Government must acknowledge people’s anxieties and fears that reducing GHG emissions will negatively affect the livelihoods of some Canadians, and take the steps needed to secure a just transition. We cannot replace stable, good-paying jobs with precarious, low-wage work and leave workers and communities behind if we are to successfully transition to a sustainable, low-carbon economy.

Under these circumstances, it is of the utmost importance that the Government of Canada—working closely with provinces, communities, employers, unions, and workers—put in place measures that will help both workers and their communities successfully navigate through the challenges imposed by the coal phase-out. Indigenous communities will be among those affected by the transition. Beyond providing economic opportunities and benefits to all communities, just transition can also contribute to reconciliation with Indigenous peoples, consistent with calls for more equitable prosperity.

We are confident that other countries will be looking to Canada’s leadership on just transition actions as an example of how to put people at the center of progressive climate policy.

As important, if this first just transition plan is developed and implemented effectively, it will help to strengthen public support within Canada for future climate action. Concrete and effective just transition supports will help build the broad consensus needed for ambitious climate change action.

Just transition must become an integral part of climate action plans, in Canada and internationally, as the world transitions to a low-carbon economy. Without just transition, we risk increased polarization on this issue and eroding public support for action on climate change.

To transition successfully, all governments must be leaders for just transition: federal, provincial, and municipal. Employers, workers, spouses, youth, community members, and civil society also need to buy into, and ultimately embrace, the transition to a low-carbon Canada.

Now is the time to act, invest, plan, collaborate, partner and communicate to ensure Canada delivers on a just transition for Canadian coal power workers and communities.

How we developed this report

Following the direction set out in our mandate, the Task Force engaged directly with stakeholders to gather information on: the context for coal-fired electricity in each province; the known and anticipated impacts of the Government of Canada’s policy to accelerate the phase-out of coal generated electricity; transition planning that is underway; the strengths and weaknesses of existing funding and support systems available to provide transition supports to workers and communities; and any gaps in planning, policies, and programs.

We travelled to all four affected provinces in the spring and summer of 2018:

• Alberta: May 14 to 17
• Saskatchewan: June 11 to 13
• New Brunswick: June 25 to 26
• Nova Scotia: June 27 to 29

Across Alberta, Saskatchewan, New Brunswick and Nova Scotia, we visited fifteen affected communities, held eight public engagement sessions, toured five generating stations, two mines, one port, and, met with as many employers of coal workers and businesses that rely on the coal industry as possible.

During these meetings we heard directly from affected workers and their families, employers, labour union representatives, municipalities, community members, business representatives, and economic development and non-governmental organizations. Everyone was both generous with their time and heartfelt with their insights.

We met with officials from provincial and federal governments. We also received written input from over two dozen individuals and organizations.

A separate report provides a summary of what we heard by province and theme.

Background and overview of coal-fired electricity in Canada

Coal has been used in Canada for centuries and is currently used for two main purposes: thermal coal to generate electricity; and metallurgical coal to produce steel, as summarized in Figure 3. The Government of Canada’s policy to accelerate the phase out of traditional coal-fired electricity by 2030 will affect only thermal coal production and use. Canada will continue to mine, use, and export coal for metallurgical processes.

In 2005, coal was being used to generate approximately 16% of electricity in Canada. By 2016, that number had dropped to 9%, largely attributable to Ontario’s closure of all of its coal-fired generating stations.^{Footnote 11}

As shown in Figures 1 and 2, Alberta, Saskatchewan, Nova Scotia, and New Brunswick are the only provinces that continue to use coal to generate a significant percentage of their overall daily electricity generation. Alberta has the largest percentage of coal-fired generating capacity. Manitoba has a single coal-fired unit, for emergency use only that is slated to close before 2030. Manitoba Hydro plans to keep the workers impacted by this closure employed within its operations.^{Footnote 13}

Figure 1 Coal-fired generating capacity by province, 2017^{Footnote 14}

Circumstances in these four provinces vary greatly, which has and will impact the way any just transition plan is developed and implemented. Their differences influence relationships with workers, unions, communities, and governments—and the phase-out itself. Alberta has multiple private companies competing in an open electricity market. Nova Scotia has a single publicly-traded utility. Saskatchewan and New Brunswick each manage their electricity needs through crown corporations.

This said, all of these provinces have, to varying degrees, reduced the amounts of coal mined and used in their generating stations over the past decade. These reductions are due in large part to economic factors in the energy sector, but also because of environmental targets and regulations prompted by a growing recognition of the environment and health impacts of coal-fired electricity.

Figure 2 Map of coal-fired generating stations and thermal coal mines in Canada

Figure 3 Select History of Coal in Canada

Economics

Provincial, national, and international economic and environmental trends suggest that coal-fired electricity generation will continue to decline in Canada in the coming years.

In some jurisdictions such as Alberta, natural gas can be a viable alternative to coal. Between 2014 and 2018 the price of natural gas fell by approximately 66% in Canada.^{Footnote 18}  Combined with efforts to reduce GHG emissions, the lower price of natural gas and associated reduced labour costs has made switching from coal to natural gas more economically viable in the long-run for some generating stations.

Renewable energy is also becoming an increasingly viable and cost-effective option. Wind energy is now among the lowest-cost options for new electricity supply in most Canadian provinces.^{Footnote 19}  Canadian utilities are actively exploring ways to deploy more renewables and recent infrastructure investments in hydroelectric prove that they are dedicated to following through. For example, Nalcor Energy’s Lower Churchill Project (also commonly known as the ‘Muskrat Falls’) in Newfoundland and Labrador is expected to help create employment and economic benefits in the province and to transmit power to Nova Scotia to help them achieve their renewable energy targets. From 2005 to 2015, electricity generation from renewable sources grew by 17% in Canada.^{Footnote 20}

When looking at the future of coal, some projections assume that Canada will increase its use of carbon capture and sequestration (CCS) technology for coal-fired electricity generation.^{Footnote 21}  Research to date has shown that deploying this technology increases the cost of using coal. While coal-fired units with CCS are often not yet economically viable, the next generation of CCS may be deployable on a smaller scale and used by different types of industrial facilities.

Health and environment

Research shows that using coal to generate electricity produces air pollutants and GHG emissions that are harmful to human health and the environment, including:

• sulphur dioxide
• nitrogen oxides
• particulates
• mercury
• carbon dioxide
• methane

Breathing these pollutants can contribute to lung cancer, asthma, other respiratory and cardiovascular illnesses, and premature death.^{Footnote 23}

Pollution from coal can also negatively impact Canadians and their communities by causing acid rain, haze and smog. For people with asthma or cardiovascular illnesses, smog can prevent them from going outside or cause them to go to the emergency room. For children, smog alerts can mean staying inside during recess instead of playing outside.

Using coal for electricity emits GHGs that contribute to climate change. Changes to Canada’s climate will have long-term negative impacts on the health, wellbeing, and wallets of Canadians, due to factors including more severe and frequent heatwaves, storms, and floods.

Federal approach to phasing out coal-fired electricity

In 2012, the Government of Canada, under Conservative leadership, put in place the Reduction of Carbon Dioxide Emissions from Coal-fired Generation of Electricity Regulations.^{Footnote 27}  This was the first set of regulations towards the phase-out of coal-fired electricity, requiring coal-fired electricity generating units in Canada to limit emissions to no more than 420 tonnes of carbon dioxide per gigawatt hour.

As a result of the 2012 regulations, most of Canada’s coal-fired units will close before their end-of-life date, unless they are equipped with technology to meet the performance standard or are located in a province that has an equivalency agreement with the Government of Canada.

In December 2018, the Government of Canada amended the 2012 regulations to accelerate the phase-out of traditional coal-fired electricity by 2030. The amended regulations are now in force.

Provincial approaches to coal-fired electricity

Each province has unique circumstances and considerations. As a result, the coal phase-out is not unfolding in a uniform way across the country.

Alberta

The phase-out of coal is already well underway in Alberta. In November 2015, the Government of Alberta released its Climate Leadership Plan, which included commitments to phase out coal-fired electricity and to increase its power generation mix to 70% natural gas and 30% renewables by 2030.^{Footnote 28}  Given the availability of natural gas, some companies have begun switching coal-fired generating stations over to this lower-carbon emissions and reduced labour option, well in advance of 2030. As a result, layoffs have begun and more are anticipated in the near future.

In 2016, the Government of Alberta concluded a $1.1 billion compensation agreement with TransAlta, ATCO, and Capital Power, the major utilities in Alberta that use coal. In 2017, a provincial panel, the Advisory Panel on Coal Communities, examined the effects of the coal phase-out on workers and communities and released its recommendations for the provincial government.^{Footnote 29}

In response to the Advisory Panel’s report and other considerations, the Government of Alberta has implemented programs to mitigate, to some extent, the impacts on workers and communities. In November 2017 the Government of Alberta announced two funding programs: a $5 million Coal Community Transition Fund to municipalities for economic diversification plans and feasibility studies; and, a $40 million Coal Workforce Transition Fund to assist laid-off workers.

Saskatchewan

Since 2014, Saskatchewan has been operating the world’s first CCS system on their Boundary Dam Unit 3 generating unit near Estevan. Canada and Saskatchewan co-signed an agreement-in-principle in November 2016 to work together on an equivalency agreement for the federal 2012 regulations for the pre-2030 period. In 2017 the Government of Saskatchewan released its Prairie Resilience: A Made-in-Saskatchewan Climate Change Strategy, referencing the merits of an equivalency agreement with the Government of Canada that would enable them to continue using coal-fired electricity.^{Footnote 30}  The Strategy also committed to determine the viability of extending CCS technology to all its coal plants. Since the release of the Strategy, SaskPower and the Government of Saskatchewan have announced that they are not planning to deploy additional CCS technology on Unit 4 and Unit 5 at the Boundary Dam Generating Station, but SaskPower is evaluating the feasibility of implementing CCS on their newest unit at the Shand Power Station.

New Brunswick

The Government of New Brunswick adopted its Transitioning to a Low-Carbon Economy: New Brunswick’s Climate Change Action Plan in 2016.^{Footnote 31}  In that plan, the province committed to coal phase-out as quickly as possible, while respecting the province’s economic reality. New Brunswick Power, the provincially-owned utility, plans to eliminate coal from its energy mix by 2030 by replacing it with a new, cleaner energy source to keep the Belledune Generating Station in operation. The utility is investing up to $7 million to investigate alternative fuel sources for the generating station, including the use of hydrogen fuel sources, while also looking at biomass and natural gas.

Nova Scotia

The Province of Nova Scotia has its own climate change strategy, Toward a Greener Future: Nova Scotia’s Climate Change Action Plan.^{Footnote 32}  Adopted in 2009, it focuses on making energy in Nova Scotia cleaner overall instead of specifically targeting coal. This policy is backed bythe province’s Greenhouse Gas Emissions Regulations, which established GHG emission caps on the electricity sector. Nova Scotia's Renewable Electricity Plan also supports the Action Plan by setting renewable electricity generation targets of 25% by 2015 and 40% by 2020. Nova Scotia exceeded its 2015 target by 2% and reports being on track to reach 40% by 2020. Recognizing these outcomes, the Governments of Nova Scotia and Canada signed an equivalency agreement to exempt the province from Canada’s 2012 coal-fired electricity regulations.That agreement came into effect in July 2015. The governments have also recently established an agreement in principle to work on a new equivalency agreement for the amended coal-fired electricity regulations.

Table 1 Utilities with coal-fired assets

*Includes petroleum coke units
**TransAlta and ATCO co-own (50/50 share) the Sheerness Thermal Generating Station in Alberta

Affected workers

Workers at coal mines and generating stations are highly skilled and uniquely qualified for the work they perform. They include engineers, welders, mechanics, electricians, heavy equipment operators, and maintenance staff. Most of the positions offer full-time employment, a higher than average wage based on the local costs of living, health benefits, and a pension plan consistent with their collective agreement (Figure 4 provides some illustrative examples). In 2017, these workers generally earned considerably more than Alberta’s and Nova Scotia’s average wage of $30.01 and $23.35 per hour, respectively.^{Footnote 33}

Based on the best available data, there are between 1,880 and 2,400 people working at coal-fired generating stations and between 1,200 and 1,500 working at thermal coal mines. It is anticipated that a significant number of these workers will lose their jobs by 2030—and some already have.

While nearly all thermal coal mine employees will be affected, some coal miners will continue to supply the Boundary Dam CCS unit and the Shand CCS research facility in Saskatchewan. For generating stations that convert to natural gas, employment in the station will be reduced by an estimated 60-70%. These percentages will vary for generating stations that convert to biomass or other alternatives.

Affected communities

In relation to thermal coal mines and coal generated electricity, there are nearly 50 affected communities in Canada, each with its own unique history, population, geography, economic circumstance, and overall landscape. Despite their distinct characteristics, these communities share strong cultural ties to the coal industry.

Canadian coal communities are small cities, towns, or villages with populations ranging from 650 to 34,000 residents. There are a number of regions where groupings of neighboring communities rely on the coal industry to support their economy. In places like Cape Breton, NS, coal has helped sustain the region for hundreds of years. In Saskatchewan, impacts may be felt up to 100 kilometres away from towns such as Coronach, as many residents commute long distances for work in the mine and generating station.

The western and maritime coal provinces have distinct economic circumstances and demographics. Alberta and Saskatchewan have oil-dependent economies subject to economic shocks, such as the 2008 recession, and volatile oil prices, as demonstrated by the 2014 oil crash. Communities in Nova Scotia and northern New Brunswick have a history of industry collapse or turnover and continue to face long-term impacts from the decline of industries such as mining, manufacturing, and pulp and paper.

Unemployment in coal communities in both the western and maritime coal provinces is higher than the national average, reaching double digits in Cape Breton, NS, and the Campbellton-Miramichi region, NS. The median age is more than 50 years, well above the national average, in coal communities in the maritime provinces and in a number of small Alberta coal towns. Their demographic profile poses unique challenges, particularly with regards to healthcare and retirement security. In nearly all coal communities, young families are difficult to attract and retain, influencing the economic outlook of these communities.

While the sense of urgency varies, all coal communities in Canada are discussing transition. A number of factors influence community-level discussions and approaches, including the degree of impact on their municipal tax bases, businesses and services, and population growth. Some communities rely significantly, or entirely, on the coal industry and are more vulnerable to the phase-out. Residents in communities that are further from urban centres and more isolated, such as Hanna, AB, will not easily be able to access services and opportunities offered in larger cities should their local services decline as a result of the phase-out of coal.