The potential impact on the mining industry resulting from proposed Canadian legislation reinforcing the federal government's commitment to a net-zero carbon target by 2050 remains unclear, with the possibility of additional regulatory action years away, according to Osler Hoskin & Harcourt LLP partner Sander Duncanson.
"There's a lot of unknowns about what this regime looks like," Duncanson said. "How much of this is just easy political statements without a lot of teeth, versus really requiring wholesale change?"
Prime Minister Justin Trudeau's government unveiled the legislation Nov. 19, aiming to firm up a commitment to hit carbon neutrality by 2050. If passed, Bill C-12 will require Canada to set emissions targets every five years starting in 2030, while also tasking an advisory group with providing nonbinding feedback to the government about its progress on carbon goals.
The legislation, which comes without penalties for not meeting goals, also requires governments to produce emission-reduction plans that include an outline of "relevant sectoral strategies," according to the proposed bill.
|A welder works on a section of pipe at Trans Mountain Corp.'s Westridge Terminal.
Source: Trans Mountain Corp.
For the mining sector, a key question in coming years will be how government addresses regulatory requirements for some projects undergoing permitting to prove they can become net carbon neutral after 2050 if extending beyond that year.
"The federal impact assessment space is where a lot of this discussion is going to take place," Duncanson said. "For projects that do need to demonstrate net zero by 2050, what types of conditions are going to be attached to those projects to actually require them to do that and how onerous are they going to be?"
While the middle of the century may seem a long way off, larger mining developments can have lifespans of many decades, which means some new projects undergoing federal review will have to show carbon-neutral plans for beyond 2050, such as by using emission credits.
Canadian industry is already taking steps to align with the carbon neutrality policies, with some larger resource companies having announced strategies mirroring the government's 2050 plan. Diversified mining company Teck Resources Ltd. said in March that it would seek to be carbon neutral by 2050 and reduce its carbon intensity by 33% by 2030. Similarly, pipeline operator Enbridge Inc. said in early November that its goal was to cut its greenhouse gas emissions intensity by 35% by 2030 and be carbon neutral by 2050.
The Trudeau government has made reducing carbon emissions a core policy plank. It has introduced federal carbon pricing and redrew Canada's environmental permitting process to target industry emissions, among other things.
Polls have suggested that most Canadians support action to reduce emissions in an effort to stem climate change. But the issue has been divisive, especially in provinces that produce more emissions, such as Alberta, where exploiting vast oil sands deposits is a major industry. Canada's competitiveness has declined amid more stringent permitting, making it harder to source capital in the resource sector, according to certain mining and energy executives.
For Bill C-12 to pass, Trudeau's minority government will need support from another federal party. Canada's Green Party has indicated it will not support the bill, saying it is not stringent enough, while the New Democratic Party has said it will try to have the bill amended to include a target for 2025. The position of the Conservative Party, Canada's official opposition party, is not clear.
"Our caucus is reviewing the Liberals' proposal and consulting with stakeholders," Chelsea Tucker, press secretary for Conservative leader Erin O'Toole, said in an email. "We will have more to share in the coming weeks."
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