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New and expanded thermal-coal mines are highly unlikely to get the green light under a policy change announced by the federal government Friday, throwing into jeopardy one company’s plan to vastly expand its mine in the foothills of the Rocky Mountains.

Canada has been something of a cheerleader in the international push to phase out thermal coal, which is burned to produce power, and last month joined other G7 countries to underscore the need to immediately end international investments in thermal-coal projects. Ottawa’s policy shift comes as G7 world leaders gather in Britain to address global challenges, including climate change.

The change could sound the death knell for the Vista coal-mine expansion project in Alberta, near the town of Hinton. The mine operator, Coalspur Mines Ltd., wants to more than double its annual output to between 13 million and 15 million tonnes.

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Environment Minister Jonathan Wilkinson ordered a federal environmental assessment for the application last year, citing the scale of the project. On Friday, he wrote to the company to let it know that its planned expansion is unlikely now to ever be approved.

But that doesn’t mean the federal government is outright banning new or expanded thermal-coal mines.

“Proponents can still bring a project forward for assessment, but we’ve told them at the front end that it will cause unacceptable – and that’s a pretty strong word – environmental impacts,” Mr. Wilkinson told The Globe and Mail Friday.

“When you say that a project like this will have unacceptable environmental impacts, it is a pretty strong statement in terms of the Government of Canada’s view. And I think it would cause investors and proponents to reflect on whether they think it’s worthwhile spending time and energy to bring forward.”

While environmental groups reacted positively to the move, Hinton Mayor Marcel Michaels says the decision could have a devastating impact on the long-term economic future of the town and Alberta’s economy.

“I have a young family, and I understand thermal coal probably won’t be around 100 years from now. I get it. But there’s no plan in place to replace these jobs,” he said.

As Ottawa pursues carbon-reduction goals, Mr. Michaels says it also needs to develop a long-term employment strategy so that communities such as Hinton – which is largely reliant on energy and forestry jobs – have a viable future.

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Mr. Wilkinson said that the recent federal budget contained numerous programs for “communities and workers that may be affected not just by this, but by the broader energy transition that will be happening over the coming decades.”

Mr. Michaels countered that those are simply “Band-Aid solutions.”

“It does not fix the overall input and output of the economy,” he said.

Coal has become a major flashpoint in Alberta, where the provincial government has come under fire for quietly scrapping a decades-old land-protection policy around coal mining. The backlash was so fierce that the province ended up reinstating the policy and has launched public consultations to develop new rules.

The major concern in the province is a series of new metallurgical coal mines planned for the eastern foothills of the Rocky Mountains – something that the new policy from Ottawa won’t affect. (Unlike thermal coal, which is burned for power, metallurgical or coking coal is used in steel production.)

But Mr. Wilkinson said his government will release new regulations on coal-mine effluents “within the next couple of months” to address concerns about water contamination caused by coal mines.

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The Vista mine in Alberta is owned by U.S. coal giant Cline Group and operated by Coalspur Mines Ltd. It currently produces about six million tonnes of thermal coal each year. Coalspur was granted creditor protection on April 26, after it dialled down operations earlier this year and temporarily laid off 300 people in February.

The company did not return requests for comment.

It’s the only thermal mine with an application before federal regulators, but Mr. Wilkinson said the change announced Friday wasn’t targeting a single company.

“It’s about making a statement to anybody that’s considering bringing forward a new thermal-coal project. I think it’s better for us to be clear about that before folks consider bringing those things forward,” he said.

Coal-fired electricity generation accounted for 30 per cent of global carbon-dioxide emissions in 2018, the majority of which came from Asia, according to the International Energy Agency.

Mr. Wilkinson said Friday’s change “makes a statement” about Canada’s commitment to fighting climate change.

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Alberta’s Energy Minister Sonya Savage said in an e-mail her government is reviewing the policy, but she was “deeply disappointed” that Ottawa failed to consult with provinces before it made the decision.

“Alberta’s government has always been committed to balancing environmental considerations with job creation and the economy. However, the federal government must stop moving the goalposts on natural-resource project approvals,” she said.

“Sudden and unexpected changes in direction – like this one – will have long-lasting implications on job creation and investment, and impacts international customers who depend on our responsibly produced energy resources.”

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