Auditor general slams Ottawa’s support for transition from coal in Alberta

The federal government failed to support coal miners and communities in its transition to a low-carbon economy.

The Office of the Auditor General of Canada released a scathing report on Tuesday hammering Ottawa for being unprepared to support the sector in its transition or actually following through on its promises and programs.

Robin Campbell, president and CEO of the Coal Association of Canada, did not need the independent review to affirm this — to him, it was obvious.

“This government had no intent at all to provide the proper supports that were needed to look after coal miners who were losing their jobs because of the government policies on coal-fired generation,” he said. “They should be embarrassed. This committee they put together was a sham.”

Campbell was a former Alberta finance and environment minister.

The report did not argue the need to transition from carbon-intense energy. However, it highlighted the government’s abject failure of Employment and Social Development Canada and Natural Resources Canada to meet the objectives of the Paris Agreement to provide equitable support to workers and communities to minimize the impact of a transition to a low-carbon economy.

According to the report, the closest the federal government has come to helping workers transition is offering employment insurance at 55 per cent of their previous wage. The Alberta government topped that up to 75 per cent in 2018.

Campbell said the damage goes beyond just the individual coal miner and their family, as the industry supported thousands of jobs outside of the sector across Canada.

Robin Campbell is president of the Coal Association of Canada.
Robin Campbell is president of the Coal Association of Canada. Postmedia

According to a provincial government spokesperson, in 2017 there were estimated to be 1,100 coal workers in Alberta. As of December 2021 there were believed to be 331 workers.

Prime Minister Justin Trudeau started making climate pledges in 2015 and the phase-out by 2040 was mandated in 2018 and later accelerated to 2030.

The report indicates establishing programs to transition displaced workers was delayed until 2019, then kicked further down the road. When the pandemic hit it was put on hold again, and when Trudeau called an election this past fall it was put on hold once again.

When the audit began — looking at December 2018 through September 2021 — the federal government had just begun meaningful engagement and then had only talked with two provinces and three stakeholder groups.

Environment and Parks Minister Jason Nixon said no meaningful discussion had taken place with Alberta; they had only been dictated to by Trudeau and Environment Minister Steven Guilbeault.

“We can help solve these problems without costing hundreds of thousands of people their jobs,” said Nixon. “But it seems the federal government is bound and determined to put everyone in the industry in the welfare line, which is something the Alberta people will not accept.”

Alberta Environment Minister Jason Nixon, left, and his federal counterpart Steven Guilbeault.
Alberta Environment Minister Jason Nixon, left, and his federal counterpart Steven Guilbeault. Photo by The Canadian Press

The federal government did promise to open up mining projects in their recently tabled budget to support green tech and stockpile resources for EV cars and batteries.

Campbell said people are “dreaming in technicolour” if they expect environmental groups to permit those projects from starting. If they do get approval, they are years away from shovels in the ground.

Ottawa had also fallen short on supporting communities.

The report said 21 coal-fired generating stations and thermal coal mines across four provinces would be phased out, including nine in Alberta — most notably impacting Wabamun and Parkland County.

Parkland County Mayor Allan Gamble said in a statement that the county has lost $217 million in assessment value since 2018 due to the transition and estimates another $1 billion to be in jeopardy. He also put the job loss in the county at more than 1,440 jobs due to the shutdown of coal. He said the county has received some one-time funding from the federal government through Prairies Canada to support study and development of work for future economic opportunities, but it does not offset their ongoing losses.

In total, Ottawa has committed $25 million to 34 Alberta projects through the Canada Coal Transition Initiative. There has been an additional $105 million through the CCTI’s infrastructure fund for seven projects in Alberta impacting 16 communities. These projects are geared towards improving roads and sewers and other infrastructure to attract industry.

While there are some positives, the report said these efforts still fell short as they “could not demonstrate that all of the projects they funded supported a just transition for the affected communities.”

“As the federal government continues to invest energy into a transition away from fossil fuels, it is important to consider that regional and local jobs are not easily transportable to new locations without the development, alongside impacted communities, of thoughtful programs and mitigation strategies,” said Gamble in his emailed statement.

Parkland County Mayor Allan Gamble.
Parkland County Mayor Allan Gamble. Photo by File Photo

The challenge going forward is finding a smoother transition for oil and gas while taking into consideration energy needs, an industry that RBC in a report on Tuesday pointed to a bright future despite environmental pressures. Carbon capture utilization and storage will play a role in this as will hydrogen technology. But the demand for oil and gas has not dissipated and Premier Jason Kenney continues to push for a larger role for Alberta to offset the global demand for Russian oil.

The province has also focused heavily on retraining and reskilling the workforce, including committing $600 million over three years for the Alberta at Work program in their spring budget.

Carol Howes, vice president of communications for PetroLMI and Energy Safety Canada, said the focus on the type of workforce we need going forward needs to be ratcheted up to meet the demands of new tech, green energy, oil and gas and other industries.

“We really need to spend some time understanding what this workforce will look like, what’s going to be required and how do we transition some of the workers over,” she said.

Twitter: @JoshAldrich03


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