On June 11, 2021, the federal government issued a Policy Statement on new thermal coal mines and expansion projects in Canada. In short, the federal government’s position is that new thermal coal mining projects, or expansions of existing thermal coal mines in Canada, are likely to cause unacceptable environmental effects. In addition, the federal government considers such projects as being inconsistent with Canada’s emission reduction commitments under the Paris Agreement; Canada recently announced a more ambitious national emissions reduction target under the Paris Agreement of 40-45% reduction below 2005 levels by 2030.
The Policy Statement builds on earlier efforts to address emissions from thermal coal, which contributes approximately 30% of global carbon emissions. In order to meet the goals of the Paris Agreement, analysis shows that a global phase-out of coal is needed by no later than 2030 in the OECD and EU28, and by no later than 2050 in the rest of the world. Together with the United Kingdom, Canada is a co-founder of the Powering Past Coal Alliance (PPCA), which consists of a broad range of governments, businesses and organizations that are committed to taking action to accelerate clean growth and climate protection through the rapid phase-out of coal power. As of March 2021, Canadian members include Alberta, British Columbia, Ontario, Québec, and Vancouver, along with eight businesses and organizations. In 2018, the federal government introduced regulations to phase out conventional coal-fired electricity across Canada by 2030. The federal government estimates that the phase-out of coal-fired electricity will eliminate 12.8 million tonnes of carbon emissions from the atmosphere in 2030.
Implications of the Position Statement on Federal Impact Assessment Process
The federal government has said that the Policy Statement will inform federal decision making on thermal coal mining projects. In order for a project to move forward under the Impact Assessment Act (IAA), the Minister of Environment and Climate Change (or Governor in Council) must determine that the effects within federal jurisdiction likely to be caused by a project are in the public interest. This decision is informed by, among other things, whether the project contributes to sustainability, and whether it hinders or contributes to Canada’s ability to meet its commitments in respect of climate change.
The federal government has indicated that the Policy Statement on thermal coal mining will be an important consideration in the Minister’s or Governor in Council’s determination under the IAA, as it pertains to whether the effects within federal jurisdiction caused by proposed new thermal coal mines or expansions of existing coal mines are in the public interest. Similarly, the Policy Statement will inform (i) the Environment Minister’s use of the discretionary authority under section 9 of the IAA to designate any proposed new thermal coal project or expansion that is not listed in the Physical Activities Regulations, and (ii) the Environment Minister’s opinion, under section 17 of the IAA, about whether a designated project would cause unacceptable environmental effects within federal jurisdiction before the commencement of an assessment.
In parallel to the release of the Policy Statement, Environment Minister Jonathan Wilkinson informed Coalspur Mines Ltd. that the policy will apply to the consideration of its proposed thermal coal mine expansion at the Vista Coal Mine near Hinton, Alberta.
Policies to Support Clean Energy Investments
The announcement of the Policy Statement follows an agreement in May 2021 by all G7 countries to take concrete steps towards ending government investment for unabated international thermal coal power generation projects by the end of 2021. Previously in 2019, Export Development Canada committed to no new financing for coal-fired power plants, thermal coal mines or dedicated thermal coal-related infrastructure.
Other recently announced initiatives to facilitate the growth of clean energy include an October 2020 commitment by the Canada Infrastructure Bank to invest $2.5 billion in clean power projects over the next 3 years. In addition, the federal government has committed $964 million over four years to advance smart renewable energy and grid modernization projects under its updated climate change plan, A Healthy Environment and a Healthy Economy. With COP 26 scheduled to take place in Glasgow in November 2021, further announcements of emission reduction initiatives by federal, provincial and municipal governments are likely on the horizon.