The Liberal government has announced its plan to virtually eliminate the use of traditional coal-fired electricity by 2030, but will offer some flexibility to the provinces.
Environment Minister Catherine McKenna unveiled the coal-phase-out plan Monday as one of a series of measures that Ottawa is introducing ahead of the first ministers' meeting in December, when Prime Minister Justin Trudeau hopes to conclude a pan-Canadian climate accord.
"Taking traditional coal power out of our energy mix and replacing it with cleaner technologies will significantly reduce our greenhouse gas emissions, improve the health of Canadians, and benefit generations for years to come," Ms. McKenna told reporters. She could not provide an estimate on the cost to consumers but said Ottawa will work with provinces to invest in the most affordable options.
The coal regulation would accelerate the existing timetable – laid down by the Conservative government in 2012 – for the four provinces that still burn coal for electricity to either adopt technology to capture carbon emissions or shut down the plants.
However, government sources say Ottawa recognizes that provinces need flexibility and is willing to negotiate agreements that would allow some plants to stay open so long as equivalent emission reductions are achieved elsewhere.
The federal government has agreed to negotiate a deal with Nova Scotia that will allow the province to burn some coal after 2030 in high-demand winter months, while it achieves deep emissions reductions in its electricity sector, sources have said.
"There is an agreement in principle to negotiate a new equivalency agreement," a senior Nova Scotia official said. The flexibility will allow the province "to go from coal to clean" rather than relying on natural gas, the official said.
Nova Scotia is also closing in on an agreement with Ottawa on carbon pricing after Premier Stephen McNeil balked at the federal plan announced by Mr. Trudeau last month.
Alberta has already announced its plan to shut down coal-fired power plants by 2030, but a federal regulation would prevent a future provincial government from relaxing those rules. Saskatchewan and New Brunswick each have units that are expected to remain in operation until 2040 and their governments or utilities have expressed concerns about the federal plan.
Saskatchewan Premier Brad Wall denounced the federal coal plan, saying Ottawa is unilaterally announcing new regulations after promising to work with the provinces on the national climate strategy.
"These actions have severely undermined the December meeting and have exposed the prime minister's disingenuous commitment to federal-provincial collaboration," Mr. Wall said in a release Monday. The premier said his government will review the environmental and economic impacts of the accelerated coal phase-out.
He added he will not sign a climate accord next month unless Mr. Trudeau withdraw his plan for a national minimum carbon price.
A report to be released Monday says a national coal phase-out by 2030 would prevent more than 1,000 premature deaths across Canada and result in billions of dollars in health benefits. In addition to carbon dioxide, coal-based power plants emit sulphur dioxide, nitrous oxide, mercury and other heavy metals, notes the report from Calgary-based Pembina Institute and several health organizations.
"The scientific evidence on the destructive health effects of coal pollution is clear," Ian Culbert, executive director for the Canadian Public Health Association, said in a release.
"By tightening federal regulations on coal-fired power plants, the government of Canada can take an important step towards creating the healthy energy environment that will protect the health of Canadians today and provide a stable climate for the future."
The long-promised Liberal plan comes as U.S. president-elect Donald Trump vows to resurrect the coal industry in the United States by rolling back the Obama administration's environmental and climate regulations. It's unclear, however, whether utilities will reverse the trend away from coal in favour of cheap natural gas and renewable technologies that are increasingly cost competitive.
Last week the Canadian government released its long-term strategy for deep emission reductions by 2050 and it hinges on a two-pronged, long-term approach: render the electricity sector emissions-free, and increase the use of electricity in transportation and heat for buildings.
In his fall economic update, Finance Minister Bill Morneau pledged federal investment in clean infrastructure, including projects to assist in the transition from coal such as interprovincial transmission lines.
The utilities industry warns the Liberals must show enough flexibility to ensure that companies are not saddled with steep losses due to plants being shut down while they are still viable assets, and to ensure that regional economies are not undermined. Consumer costs must also be a central focus, Sergio Marchi, chief executive officer at the Canadian Electricity Association, said in an interview.
"There will be an impact on electricity prices to consumers," he said. Mr. Marchi added he recently wrote to Mr. Trudeau to express the industry's conditional support for a coal phaseout.
Coal-fired power accounts for 11 per cent of Canada's electricity capacity, but 70 per cent of the sector's greenhouse gases. Mr. Marchi notes the electricity sector has cut GHG emissions by 30 per cent from 2005 levels and expects another 30 per cent reduction by 2030 under current rules.
Canada's electricity sector is now 83 per cent GHG emissions free, with a great reliance on hydro, nuclear and growing use of renewable power.
While Alberta has the largest share of the country's coal-fired power, Saskatchewan also depends heavily on the fossil fuel, with seven units and a total capacity of 1,530 megawatts. Mr. Wall has touted his province's investment in carbon-capture technology that removes carbon dioxide from the smokestack of one unit at Boundary Dam. The government and SaskPower must decide whether to make similar billion-dollar investments in the other Boundary Dam generators.
For its part, Nova Scotia is leading the country in emissions reductions, and is on track to cut greenhouse gases by 46 per cent from 2005 levels by 2030. Mr. McNeil argues his province can dramatically reduce its dependence on coal-fired power, but will need some capacity to meet the peak demand in the winter until at least 2040.
New Brunswick has just one coal-fired power plant. The 450-megawatt Belledune station provides jobs in the depressed northern part of the province and is a key customer for the port at Belledune.
Editor's note: The name of the port serving New Brunswick's coal-fired power station has been corrected in the online version of this story.