Wooden train cars in front of forest and mountains

Highlights

The Canadian province of Alberta has committed to ending pollution from coal power by 2030. This commitment was followed by extensive consultations, led by the government and labor groups, that ensured that diverse perspectives informed just transition plans. The government also made substantial investments in financial support for coal-dependent workers and communities. The coal phase-out is now years ahead of schedule, but communities are also continuing to make socioeconomic gains.

Context

Alberta is the most carbon-intensive province in Canada: in 2015, it contributed 38% of the nation’s greenhouse gas emissions, even though it has only 11% of the population. Coal plays an important role in Alberta: in 2017, it provided nearly 55% of the province’s electricity. However, due to the cost-competitiveness of natural gas, regulations on coal and concerns related to health and climate change, coal-fired electricity has been declining since 1997.

In the summer of 2015, shortly after the Alberta New Democratic Party (NDP) won a majority government, the Alberta government created Alberta's Climate Change Advisory Panel. The panel brought together many different groups – including unions, farmers, indigenous communities, academia, public health advocates, environmental non-governmental organizations (ENGOs) and industry representatives – in a consultative process to discuss a climate change strategy for Alberta.

In November 2015, the panel released its Climate Leadership Report to the Minister, which informed the NDP’s Climate Leadership Plan, including the complete phase-out of coal power plants by 2030 and the introduction of an economy-wide carbon tax. This is a significant commitment that will require retiring 40% of Alberta’s installed capacity (which totaled 16.4 GW in 2016). In November 2016, the Government of Alberta announced agreements with the major coal utilities in Alberta to compensate them for stranded capital resulting from the coal phase-out (Off-Coal Agreements). TransAlta, ATCO, and Capital Power agreed to convert to natural gas in return for a compensatory payment of CAD 1.36 billion ($1.01 billion), to be distributed over 14 years (2017 to 2030). These payments will be financed through the province’s carbon tax on large industrial emitters.

Just Transition Plan and Results

Following the release of the Climate Leadership Plan, the Alberta Federation of Labour created the Coal Transition Coalition (CTC) to defend the interest of coal workers and their communities. The CTC organized several meetings in coal communities and, in March 2017, produced a report on the need for a just transition strategy.

The CTC’s work and recommendations intersected with that of the Advisory Panel on Coal Communities. This Advisory Panel, a small body made up of experts with experience in government and stakeholder engagement, was established by the Alberta government in September 2016 and tasked with collaborating with workers, communities and First Nations to produce recommendations for supporting groups impacted by the coal phase-out. In September 2017, the Panel released 35 recommendations for supporting coal workers and communities. The provincial government has created several programs and funds that support a just transition, including measures informed by the recommendations.

Coal Workforce Transition Programs:

The government created a CAD 40 million ($29.9 million) Coal Workforce Transition Fund to finance multiple initiatives in support of coal workers. The initiatives are operational as of January 2018 and include:

  • The Bridge to Retirement program, which provides biweekly payments to workers who lose their jobs and are close to retirement, but not yet eligible for their pension. It provides up to 75% of a worker’s previous weekly earnings for up to 72 weeks, until they receive their pension, or when gross employment income is greater than the relief payment, whichever condition is met first. To be eligible, workers must be at least 53 years old, have worked for the same company for at least 10 years, and have not received their employer pension.
  • The Relocation Assistance program, which reimburses coal workers that are laid off and need to move at least 40 kilometers (25 miles) to begin a new job. Workers are eligible for reimbursement of up to CAD 5,000 (approximately $3,740) for moving-related expenses.
  • Coal and Electricity Transition Tuition Voucher, which provides affected coal workers with a voucher to pursue secondary education and train for new careers. Coal workers can claim a maximum of CAD 12,000 (approximately $8,900).

Support for Communities:

  • The Coal Community Transition Fund provided CAD 5 million ($3.7 million) in March 2018 to municipalities and First Nations affected by the coal phase-out, aiming to help them diversify their economies. The fund supported 12 projects in 17 communities across the province. To be eligible, a project had to contribute to building economic development capacity, strengthening approaches to improve economic conditions and supporting a transition to long-term economic stability.
  • The Community and Regional Economic Support (CARES) program, which issued its first grants in late 2016, supports the economic development of regions, municipalities and communities. It prioritizes projects that focus on innovation, investment and tourism. To be eligible, projects must improve the local business environment and/or regional economic collaboration; increase support for entrepreneurs and small and medium-sized enterprises (SMEs); enhance support for associations, businesses and industries that enable diversification in a community or a region; and increase industry and sector competitiveness to lay the foundation for investment and job creation, particularly in tourism.

A 2019 study found that Alberta’s coal phase-out was about six years ahead of schedule, but coal communities have actually seen socioeconomic improvements since the creation of the Coal Community Transition Fund. In the municipal district of Parkland County, for example, which has some of the communities most affected by the coal phase-out, public infrastructure projects (road construction) have been launched that will stimulate the economy by attracting private sector investments and creating jobs.

Strengths

  • Social dialogue and stakeholder engagement: The creation of governmental (Alberta's Climate Change Advisory Panel) and non-governmental (the Coal Transition Coalition) consultations and planning exercises facilitated important social dialogue and stakeholder engagement among key stakeholders, including but not limited to unions, employers, government, farmers, coal workers, communities affected by the coal phase-out, ENGOs, business leaders and academics. These dialogues informed the creation of multiple financial support programs for communities and workers.
  • Off-Coal Agreement: The Off-Coal Agreement marked an important step for enabling a transition towards a cleaner energy system by offering compensation for the province’s major coal companies to convert to natural gas.

Challenges and Gaps

  • Uncertainty about long-term resources: The Coal Community Transition Fund provided crucial resources to coal-dependent communities. However, it was a one-off payout in March 2018, which funded 12 projects across 17 Albertian coal communities with a budget of CAD 5 million ($3.7 million). It is unclear whether future rounds of funding will be available. There is also uncertainty about the future of the Coal Workforce Transition Programs, which undermines just transition efforts.
  • Variability in how climate-friendly job creation may be: Economic diversification is an important element of Alberta’s transition; however, without guardrails, there is a risk of investing in projects that entrench other unsustainable industries, such as road construction potentially locking in emissions-intensive transport modes.
  • Delays in engaging in consultation with communities and workers: The delay between the announcement of Alberta’s coal phase-out and consultative process with, and recommendations for, affected communities created unease and discontent among coal workers and communities, feeding opposition to the phase-out that could have been avoided.

Further Reading