Skip to main content

Coal is loaded onto a cart at a coal mine.Reuters

In recent weeks, the town of Tumbler Ridge has been in the spotlight as the destination for temporary foreign workers headed to jobs at a coal project nearby.

On Thursday, the federal government announced a review of the program through which those Chinese workers were hired, throwing a wrench into plans to bring up to 200 people to the Murray River project.

But while Ottawa may have at least temporarily put the brakes on foreign coal miners in B.C., that action is unlikely to derail a coal boom that involves several proposed new mines and millions of dollars worth of infrastructure to ship the product to market. As in the 1970s and 1980s, when Japanese investors were making big bets on B.C. coal, provincial coal fields are drawing international attention. This time, the biggest factor is China, which since 2009, has shifted from exporting to importing coal and is shopping for new supplies.

B.C. has 10 active coal mines and another 20 in various stages of exploration and development. Several of those proposed projects, including Murray River, are backed by Chinese interests.

"The last couple of years have really seen the demand turned on," Coal Association of Canada president Ann Marie Hann said. Fast-growing Asian economies and flooding in Australia that disrupted coal shipments have helped drive the trend, she added.

"Buyers looked elsewhere, and one of the places they have looked to is Canada," Ms. Hann said.

Most of the coal produced in B.C. is metallurgical (coking) coal used in making steel, although the province does produce some thermal coal, which is used in electricity plants. Coal exports have surged in the past decade; last year, revenue climbed to $5.2-billion from $3.4-billion in 2010, and accounted for more than 50 per cent of provincial mining revenues of $9.9-billion.

Coal-handling facilities have spent millions to accommodate increased volumes. Neptune Bulk Terminals, a North Vancouver operation that handles potash and fertilizer as well as coal, has announced plans for $400-million worth of upgrades by 2013.

Westshore Terminals in Delta has gone through several upgrades since it opened in 1970, and last year loaded a record 27.3-million tonnes of coal onto 277 ships.

The provincial government has courted coal investment. On a trade mission to China last November, Premier Christy Clark heralded $1.36-billion worth of investment in coal projects that would create more than 6,700 jobs.

The controversy over who will get those jobs has become a headache for provincial and federal governments. After weeks of public outcry and a court action filed by two B.C. labour unions, Ottawa – which is in charge of the temporary foreign worker program – has said it is not satisfied that the company followed proper procedures, which include trying to find employees locally.

The B.C. government, meanwhile, has said it will investigate allegations that recruitment agencies in China told would-be workers they would have to pay fees to land Canadian mining jobs, which is in contravention of B.C.'s Employment Standards Act.

Amid the furor, analysts are watching as China – with proven coal reserves second only in size to those of the United States – shifts from seller to buyer, shaking up global trade.

China's debut as a buyer could be driven by factors including transportation bottlenecks and dwindling coking coal reserves, Kevin Jianjun Tu, a senior associate at the Carnegie Energy and Climate Program, wrote in a February report.

Bulking up on imports might also allow China to close small, inefficient and sometimes dangerous domestic operations, he said.

Official statistics put the number of Chinese coal miners killed in mining accidents at more than 250,000 since 1949. Small mines run by township and village enterprises accounted for one-third of production over the past decade, but three-quarters of fatalities, Mr. Tu wrote. Local officials have balked at central-government attempts to shutter the operations.

"Insofar as they help ease supply-and-demand constraints, rising coal imports should make it easier for China to continuously close or consolidate small and unsafe mines," he said.

On the labour front, the controversy in B.C. over foreign mine workers mirrors disputes in Australia, where labour unions have raised concerns about mining companies hiring from overseas. As in B.C., wages have been flagged as a key concern.

Before they can hire temporary foreign workers under the federal program, employers have to apply for a labour market opinion (LMO) that demonstrates there is a need and that no Canadian workers are available. Under the system, companies – when advertising for domestic workers – are required to offer wages that are "consistent with the prevailing wage rate paid to Canadians in the same occupation in the region." Critics of the program say employers in pursuit of favourable LMOs offer wages that are not always competitive and tend to be lower than if they were trying to recruit from other parts of the country.

"The [temporary foreign worker] program in the past decade has prevented internal migration to provinces where the jobs are," said Dominique Gross of Simon Fraser University's School of Public Policy. "There's not a good enough incentive for unemployed workers to travel all the way across the country."