Should Canada’s leaders stand up to powerful foreign bullies or simply give them what they want and hope for the best? Alberta Premier Danielle Smith revealed her preference this month when her Energy Minister Brian Jean quietly instructed regulators to once again rescind a moratorium on coal mining on the eastern slopes of the Rockies – a widely unpopular decision in the province and will benefit the richest person in Australia, billionaire coal baron Gina Rinehart.
Rinehart has long lobbied for open pit coal mines in western Alberta – something that 70 percent of Albertans oppose. Well-founded fears of selenium contamination of local rivers, and of despoiling some of the most striking vistas in Canada mean that public support for coal mining is always going to be a hard sell.
But who needs public support when there is unlimited money for lobbyists and lawsuits? Four Australian coal companies sued Alberta for $13.8 billion in damages after Alberta reinstated the coal moratorium in 2022 following massive public backlash to its original cancellation in 2020. Rinehart launched separate lawsuits seeking $2 billion in damages for the revived moratorium, and her rejected Grassy Mountain coal mine. She also poured money into lobbying firms with close ties to the United Conservative Party (UCP) to hound elected officials.
Smith’s quick capitulation to Big Coal mirrors her recent dealings with President Donald Trump. She was the only premier not to sign a pan-Canadian solidarity pact to retaliate against Trump’s threatened 25-percent tariffs. Smith also made an unscheduled ring-kissing journey to Mar-a-Lago prior to the inauguration to seek a tariff carve-out for Alberta oil, presumably at the expense of the rest of Canada and Alberta’s non-oil economy.
Did Smith get anything in return for this undignified display of fealty? Trump continues to threaten crippling tariffs and has repeatedly said the U.S. requires nothing from Canada, including Alberta’s oil. Trump also regularly muses about making Canada the 51st state after Smith helpfully demonstrated which province is the weakest link in national unity. Support for joining the U.S. is highest in Alberta but still is opposed by 82 percent of people polled there.
A Poor Negotiating Tactic
Smith would be wise to remember that cancelling Canada remains an unpopular idea even in Alberta, and that quickly caving into bullies like Trump is a poor negotiating tactic. However, the same capricious capitulation was on display when Smith’s government gave in to Australian coal companies without a fight. “If you look at the lawsuits that have been filed, it’s $16 billion with the potential liability,” Smith said. “We have to take that seriously, and we have to make sure that the taxpayers are protected.”
So did Alberta really need to silently accede to Australian coal companies simply because they were sued in court? Nigel Bankes, professor emeritus with the University of Calgary’s Faculty of Law told DeSmog that Rinehart’s lawsuits regarding the Grassy Mountain project had “zero” hope of success since federal and provincial regulators had already rejected it. “They have absolutely zero case because their project was turned down by the Joint review panel, and there is no world in which government is an insurer for bad projects,” he said.
And what about the other lawsuits? Bankes believes that the former UCP government of Premier Jason Kenney created this mess when they abruptly lifted the coal moratorium in 2020, which had been in place since 1976. Within months, companies that had exploration applications on the books were awarded over 186,000 hectares of coal leases they paid nothing for and are now somehow claiming are worth $13.8 billion.
“It was not just bad environmental policy, it was bad economic policy because they didn’t put those lands up for bid,” explained Bankes. “They just said, ‘Here’s the lease.’ There were no bonus payments. There was no attempt to extract rent from this decision, it was just a giveaway to people who happened to be in line.”
Because of UCP’s incompetence around suddenly lifting a legal moratorium or embracing coal mining as the rest of the world rapidly decarbonizes, Bankes believes the Alberta government is not without some liability. “When government actively encourages stupid behavior, then I don’t think it’s entirely unreasonable saying they should be on the hook for something.”
However, he described the claimed damages of $13.8 billion as “total nonsense” and “ludicrously speculative.” Rather than rolling over for foreign coal giants, or forking over billions in taxpayer-funded damage claims, Bankes believes Alberta should simply fix this case through special legislation that would “offer companies a fraction of compensation based on costs incurred since 2020.”
“How do you determine the market value of metallurgical coal in a world that is quickly becoming allergic to coal?” Bankes asked on how to best determine reasonable compensation due to companies for the government’s ill-conceived flip-flop on coal mining. “It’s entirely possible that value could be zero. Costs incurred could be more generous than value.”
This opinion is shared by mining experts who provided expert evidence during hearings for the rejected Grassy Mountain project regarding the poor quality of coal from Alberta’s eastern slopes compared to competing existing mines in nearby British Columbia. “These speculative mines don’t meet the requirements to be viable by any economic analysis,” warned Cornelis Kolijn, a process mining engineer with 40 years of experience in metallurgical coal.
Kolijin colorfully dispelled the oft-repeated fantasy that metallurgical coal mining will make Alberta rich in markets like Japan in an article in the Tyee. “The Japanese are a very polite people but even they called the coal from the Crowsnest Pass ’shit coal’.”
Blowback is building in the province against the latest capitulation to Big Coal. Will Premier Smith side with the vast majority of Albertans who oppose coal mining on the eastern slopes of the Rockies? Or with bullying foreign billionaires? Pretending that her hands are tied on this issue due to dubious lawsuits is not just dishonest; it is cowardly. And nobody respects a coward – especially a bully.
