Final Report by the Task Force on Just Transition for Canadian Coal Power Workers and Communities: section 7

Our Recommendations for a Just and Fair Transition for Canadian Coal Power Workers and Communities provide advice to the Government of Canada to ensure that the country as a whole bears the costs associated with phasing out coal-fired electricity.

The Task Force calls on the Government of Canada to act immediately and provide just transition supports in three areas: Foundational, Workers, and Communities.

Taking action on these three fronts will affirm the Government’s commitment to a just transition, protecting workers’ rights, supporting families, and enabling local economic growth. These objectives can and indeed must be advanced in step with Canada’s efforts to mitigate climate change.

While our recommendations cannot eliminate all the uncertainties and changes coal workers and communities are facing, the Government’s implementation will demonstrate that it can act swiftly, with purpose, and in the best interests of Canadians. Support is needed in all affected provinces. Of these, there is particular urgency for action to support workers and communities in Alberta, where the coal phase-out is well underway.

We welcome the Government of Canada’s initial investment of $35 million to support affected workers and communities as a necessary first step. Based on what we heard and consistent with our broader recommendations, we advise that this funding be prioritized in two ways:

The $35 million committed in 2018 should be the beginning of a longer plan. Based on what we heard, the direct and indirect costs of the phase-out will stretch well into the hundreds of millions of dollars and the timeframe will go beyond 2030. While there are opportunities to reprioritize, reallocate and dedicate some existing funding, including for infrastructure, achieving a just transition will require additional and more substantial investments in Budget 2019 and budgets thereafter.

The Government of Canada is investing billions of dollars to mitigate and adapt to climate change, including historic investments in infrastructure.^{Footnote 35}  If the Government is strategic with these existing funds and commits to new support extended over the several years of transition planning, affected workers will see new economic opportunities in their communities that can employ and sustain them, their families, and their neighbours for years to come.

Foundational just transition supports

Key messages

What we heard

Coal workers, their families, and communities fear that without careful and inclusive planning, they may face devastating impacts from the coal phase-out. Workers and community members expressed their dissatisfaction with how the Government decided and announced the phase-out in the first place, pointing to limited or no consultation about the impacts for both provincial power grids and for the coal mine and electricity-generation workforces.

Going forward, stakeholders ask that the Government of Canada structure the transition process in ways that allow for considerate, collaborative, and transparent decision-making that accommodates the unique circumstances of each province to the greatest extent possible. They called for both the monitoring and evaluation of the short and long-term results of all government spending and other actions taken. They want to see new solutions put in place, through increased and improved planning, new supports for those affected, and a commitment to doing better—immediately and over the long term. They acknowledged that predictable and durable policies, programs, and services are necessary in order to plan sound futures. When governments change, coal workers and communities do not want their supports rolled back or cancelled.

Additionally, coal workers, their families and communities are hoping for and need a suite of solutions that are, to the greatest extent possible, driven by local conditions. It was clear in our meetings with stakeholders in all four provinces that every community and workplace is different. They emphasized repeatedly that there is no “one-size-fits-all” set of programs and services that could work without built-in mechanisms to allow flexibility and adaptability.

Coal workers and community members have many questions about when, if, and how the coal transition will affect them personally as well as professionally. Furthermore, many expressed sincere doubt about the ability of government to support them through a transition, and mistrust of government’s intentions and capabilities. Given worker and community suspicion of government, some representatives called for ongoing external oversight and advice. A lack of confidence, given past transition failures, is driving anxiety and fears that the government will not deliver on just transition.

In travelling across the country, we heard not only about the fears and concerns of workers and communities, but also about what has worked in some previous workforce transitions. We learned how locally-run transition centres that opened following the closure of other industries were an important resource and space to facilitate information sharing and service delivery. Workers, governments, and community representatives recognized these centres as a proven model to deliver consistent yet context-appropriate and flexible services and information, covering everything from re-employment opportunities and skills recognition, to educational and financial services, and healthcare. We heard how important it is that these centres be locally driven and adequately resourced to offer a broad range of services delivered by qualified personnel that understand and appreciate local conditions.

One of the key concerns we heard was a lack of information that would allow coal workers to effectively plan for what is to come. Workers, families, and communities struggle to find examples of successful transitions that they can use as a road map. While some were hopeful about the future, many more were pessimistic. Timely, accurate, and trustworthy information from employers and governments would help to reduce anxiety and give workers greater assurances when making decisions for themselves and their families.

Recommendations

Based on what we heard, we recommend that the Government of Canada:

Embed just transition principles in planning, legislative, regulatory, and advisory processes to ensure ongoing and concrete actions throughout the coal phase-out transition

Recommendation 1: Develop, communicate, implement, monitor, evaluate, and publicly report on a just transition plan for the coal phase-out, championed by a lead minister to oversee and report on progress

• Building on our report, the Government of Canada would initiate a multi-stage planning process for this transition in close collaboration with provinces, employers, workers, unions, municipalities, and economic development organizations
• The lead minister would be responsible for the plan and would be held accountable for its overall success. To ensure short and long-term accountability, the plan would clearly define and assign responsibility to all other ministers who are responsible for implementing parts of the plan. Key to the ultimate success of the plan will be the ability for federal departments and agencies to coordinate service delivery and prioritize expenditures in their respective areas of responsibility
• While the plan would have concrete and time-bound actions, it also needs to have the necessary flexibility to evolve as new transition options and opportunities emerge over the next decade
• An independent multi-stakeholder advisory council, comprised of trusted representatives, would provide advice and oversight to the Government on just transition. Through such a body, unions could continue to play an important role in policy development and delivery, respecting their deep knowledge of the issues, relationship with workers, existing networks, and long-term commitments to the workers, families, and communities
• The Government of Canada would work with partners to evaluate, assess, and report on the effectiveness of the plan and the phase-out’s actual impacts on workers and communities—from 2019 to 2030 and beyond
• Annual public reporting and a detailed report to Parliament every five years would ensure accountability and transparency

Recommendation 2: Include provisions for just transition in federal environmental and labour legislation and regulations, as well as relevant intergovernmental agreements

• New government actions must be robust and difficult to reverse, grounded by new legislative, regulatory, or intergovernmental obligations
• Including just transition provisions in relevant agreements between federal and provincial governments would demonstrate clear commitment and transparency, for example:
  • equivalency agreements under the Canadian Environmental Protection Act, 1999
  • infrastructure bilateral agreements
  • labour market development agreements
• Widespread support for continued climate change action is at risk of eroding if strong just transition provisions are not embedded in climate change and labour policy

Recommendation 3: Establish a targeted, long-term research fund for studying the impact of the coal phase-out and the transition to a low-carbon economy.

Ensure locally available supports

Recommendation 4: Fund the establishment and operation of locally-driven transition centres in affected communities.

Just transition supports for workers

Key messages

What we heard

Many of Canada’s coal workers are the second or third generation in their family to work in the coal industry. They are not only proud of this legacy, which helped build a prosperous nation, but are proud of their current contributions to providing affordable and reliable electricity in their home province. Many are now frustrated that the coal sector is not only being phased out but also disparaged as “dirty”.

Supporting workers close to retirement will be a significant challenge, as most employers reported a significant proportion of workers over the age of fifty. Older workers emphasized what the phase-out means for their planned retirement. Many feel vulnerable in the job market—often having not applied for a new job in decades—and are not in a position to retire early. While workers approaching retirement recognize that their employers will be hesitant to retrain them, many are hopeful that, if they must retire early, there will be ways to do so without penalty.

One worker looked at the lifespan of the generating station and how many years he had to retirement as factors in a decision to take on more debt to expand his family farm, and thus sustain his family in retirement. To pay off the debt on his farm, he needs the ten years of income that he would have received if the generating station were allowed to continue to its expected end-of-life date.

For those workers who will need to find new jobs, many indicated they will require income support. Through emotional and personal stories, workers shared their hardships following previous industry closures, including the hardship of sudden and unexpected job loss, receiving bad financial advice, and experiencing pension problems. Workers called for adjustments to how the Government of Canada views and delivers Canada’s Employment Insurance (EI) program. They believe that existing income programs may not be enough to help them succeed through the transition. Workers also commented on the complexity and inequity of EI.

They fear that if they lose their jobs, they will face penalties on their severance packages and lose their health plan benefits. Workers in the prairies who are also farmers are concerned that EI will penalize them for having multiple sources of income. For many, working in the coal industry effectively keeps their farms viable. Some suggested that EI is too complicated and that it works for government and not the people it was meant to support. Adverse financial outcomes of the coal phase-out are inconsistent with a just transition. Through improved support programs, workers could and should remain financially secure.

Affected workers are likely to face challenges getting retrained or furthering their education. Ideally, they would use their existing skills and earn comparable wages and benefits. If they need to gain additional skills, they face significant barriers, including the financial and personal costs of leaving their families and jobs for extended periods to retrain or go to school. Workers called for support to retrain and receive education in their communities, preferably before they are laid off.

Some workers are now looking to gain the necessary skills to prepare for careers in different sectors. Workers are also looking for accreditation for their existing skills, which will make it easier to transition into other jobs. Workers who have only ever had one employer and did not receive external training or education called for ways to have their many hard-earned skills formally certified, as their training and skills are often not recognized outside the company.

We also heard about opportunities to build relationships with unions and educational institutions, such as creating specialized educational programs, full or part-time, at community colleges, universities, or through distance education.

Moreover, information is not readily available about the skillsets of affected workers, or local and regional job prospects. This frustrates attempts to match laid-off workers with future employers. Workers and community and labour representatives called forbetter and more accessible labour market information, to help workers and employers identify viable options for what jobs they should transition into, as well as opportunities for communities and local employers to make the most of a highly-skilled workforce. Workers being laid off have a set of unique skills that could be more effectively matched with workforce opportunities.

We were also reminded by many stakeholders that employers must play a key role in a successful transition for workers. In addition to ensuring that every employee has access to current and accurate information as the transition progresses, employers can provide their current workers with the ability to have their skills recognized or modify work hours to support employees who want to upgrade their skills prior to layoff. Employers must also play an active role in ensuring that older workers can have a successful path to a dignified retirement.

Workers likewise face difficulties navigating the rapidly evolving labour market. Some workers have only had one employer since finishing their education. Repeatedly, workers emphasized they are hoping for good, unionized jobs that will ensure stability and certainty for themselves and their families. Many workers expressed uncertainty about what jobs to apply to or to retrain for, particularly if their mobility is limited by spousal employment, or farm or community commitments. Affected workers have a strong work ethic and are highly motivated, but need better access to the tools and supports that will guide them to new opportunities.

While workers had innovative ideas about jobs in the new economy, particularly in retrofits and environmental assessment, they also called for support to pursue jobs outside of the low-carbon economy since there are not always direct linkages to jobs in the clean growth sector. Wind and solar facilities create jobs in the construction phase, but there are very few ongoing, permanent jobs when these facilities are operational. To illustrate this point, we received comments about how there are no parking lots at wind farms, but coal-fired generating stations have large, full parking lots every day of the week.

There will, however, be new employment opportunities in some affected communities when converting power plants to burn natural gas, reusing fly ash, reclaiming mines, and decommissioning generating stations.

Many workers expressed frustration at the prospect of uprooting their families for jobs elsewhere or travelling long distances to work. They are attached to their communities, their spouses are employed in the community, and they are often volunteers for essential services (e.g., firefighting) in their local area. The devastating loss on the value of a worker’s home in a coal community facing economic downturn is also a major worry. Workers are calling for ways to either continue living in their communities or relocate without facing devastating financial losses.

Recommendations

Based on what we heard, we recommend that the Government of Canada:

Provide workers a pathway to retirement

Recommendation 5: Create a pension bridging program for workers who will retire earlier than planned due to the coal phase out

Transition workers to sustainable employment

Recommendation 6: Create a detailed and publicly available inventory with labour market information pertaining to coal workers, such as skills profiles, demographics, locations, and current and potential employers

Recommendation 7: Create a comprehensive funding program for workers staying in the labour market to address their needs across the stages of securing a new job, including income support, education and skills building, re-employment, and mobility.

Just transition supports for communities

Key messages

What we heard

Community members are proud of where they live. They told us that their ties to these places and their connection to coal help keep their villages, towns, and cities thriving. Many coal workers and their spouses are volunteer firefighters and hockey coaches, and contribute considerably to their municipal tax base through property taxes, as do coal mines and generating stations. Workers and families want to stay together in the communities where they live. While some workers may have to travel long distances for alternate work, this is not the preferred solution. It is not enough to point to locations where jobs exist; ideally, workers should have good jobs in the communities where they live.

Rural and remote communities face added challenges due to fewer economic opportunities and distance from amenities and services. Community members openly shared many common challenges that they face including:

Many people talked about the added burden that the coal transition will place on their communities. Economic development officers face challenges combating negative perceptions of communities in transition that deter investment and business development. They are afraid they will lose local services when revenue from coal is gone forever, which can be up to 75% of a community’s tax base. With declining revenues, some coal communities will struggle to maintain and upgrade the infrastructure necessary to both attract and retain residents and industry.

To attract new residents, industries, and businesses, communities recognize that they need to be sustainable, with vibrant and increasingly diverse economies, and modern infrastructure and services. Many municipal officials acknowledged that coordinated action within and across regions will be important to achieving these outcomes, as will partnerships with civil society and non-governmental organizations.

Ripple effects of the coal phase-out are pervasive in coal communities. Impacts on workers and communities are entangled with impacts on families and home life.

Financial hardships stemming from decreased or lost income and decreased home values add to the suffering of workers and their families. People expressed concerns with financial advice and services, and stressed the importance of support options and flexibility in the face of unforeseen job losses.

We heard grave concerns about how uncertainty and stress will negatively affect mental health and wellbeing, including children. In the eyes of coal communities, increased levels of substance abuse, poor mental health, family violence and divorce are directly correlated to the phase-out and exacerbated by limited access to mental health and social supports.

To address these challenges, communities see opportunities in transition centres, broadband internet connectivity, tourism, recreation centres, small-business supports like incubators, increased capacity for planning and delivering locally-driven ideas, and regional planning. Additional resources will help them innovate and find ways of developing and diversifying their economies. Respondents stressed the importance of community-specific and community-driven analysis in order to truly understand the impacts and opportunities of the coal phase-out. Ultimately, municipalities want decision makers to understand the breadth of these impacts and help residents to thrive through this upcoming transition.

Recommendations

Based on what we heard, we recommend that the Government of Canada:

Invest in community infrastructure

Recommendation 8: Identify, prioritize, and fund local infrastructure projects in affected communities

Fund community planning, collaboration, diversification, and stabilization

Recommendation 9: Establish a dedicated, comprehensive, inclusive, and flexible just transition funding program for affected communities

Recommendation 10: Meet directly with affected communities to learn about their local priorities and to connect them with federal programs that could support their goals