Questions raised on Canada’s coal policy

Is Canada really committed to phasing coal out? Canada needs “clean hands” if it expects others to act,

Just what is Canada’s position on coal? Last week Environment and Climate Change Minister Catherine McKenna was in London announcing an alliance with the United Kingdom that “will champion a global alliance on the transition from unabated coal-fired electricity at next month’s United Nations climate change meetings in Bonn, Germany. From cleaner air to public health, to sustainability, the benefits of moving towards low or non-emitting sources of power are clear.”

While she was there the New York Times reported the Canada Pension Plan Investment Board is trying to buy the coal assets of Rio Tinto – a deal estimated to be worth $2 billion. The money for this deal was collected by the Canadian government from the pay cheques of Canadians and their employers.

So what is Canada’s policy on coal? A phase-out or an investment opportunity? Is the federal government committed to ridding the world of coal or just trying to drive down the value of coal assets so the CPPIB and scoop them up cheap?

Ms. McKenna is correct. Phasing out coal-fired electricity around the world will have a tremendously positive impact on climate, air pollution, and public health. And, the technology is now available and economically viable.

Canada, however, derives only 10 per cent of the country’s electricity generated by burning coal. Ontario has already shut down its coal plants and most of the other provinces have made commitments to do the same. So even though we are leaders in getting rid of coal, it has never been the huge challenge that many developed and developing countries face.

Leading a global alliance requires Canada to demonstrate a real commitment. How can Canada be taken seriously if Canadian taxpayers’ pension payments are being used to make new investments in coal? At the very least, can’t our credibility be called into question?

The Rio Tinto deal isn’t unique. The CPPIB has holdings in at least 35 other coal companies including Duke Energy which was fined $100 million recently for polluting rivers in the United States with coal ash.

Isn’t this analogist to the old “clean hands” debate in the 1980s? How could we ask then-president Ronald Reagan to clean up acid rain if Canada wasn’t willing to clean up its own act? Only after Ontario slapped regulations on INCO did the U.S. act. We had clean hands.

The Canada Pension Plan Investment Board was set up to earn returns for Canadian pensioners at arm’s length to the government. In 1999 it was freed to go global and seek opportunities around the world.

Going global may have allowed the CPPIB to gain better returns, but whether intentionally or not, it also made it part of Canada’s foreign policy. Its actions have a bearing on the success of Canada’s diplomatic objectives. Its dirty coal holdings and ambitions are seen as Canada’s.

In areas other than climate change and health, the CPPIB has recognized this by publicly stating it will not invest in land mines and will respect human rights and Canadian foreign policy objectives.

So why, when it comes to climate change, if Canada’s signature is on the Paris Agreement and it is championing a global phase-out of coal, is the CPPIB trying to buy more coal assets?

How will Ms. McKenna explain the actions of the Canada Pension Plan at climate talks in Bonn next month? Where she will “champion” a coal phase-out.

More importantly, how can she expect others to act when we don’t have clean hands?