Estevan, Sask. preparing for coal phase-out putting hundreds of jobs at risk

Click to play video: 'Estevan preparing for transition amidst coal phase out.'
Estevan preparing for transition amidst coal phase out.
WATCH: Coal power is being partially phased out in Saskatchewan, which means communities like Estevan will have to develop new industries to fill a job gap. – May 28, 2019

Coal has been a major part of Estevan, Saskatchewan’s identity for more than a century. Now, The Energy City is preparing for the resource to take on a lower profile.

Through an equivalency agreement, signed between the provincial and federal governments, conventional coal power will be wound down by 2030.

The good news for Estevan, the SaskPower’s Boundary Dams 4 and 5 power stations will be able to run until 2021 and 2024, the end of their operational lifespans. Without the deal, both would have shut down by the end of this year.

“It was great news for us to hear that,” Jody Dukart, a member of the United Mine Workers Association (UMWA) said.

“It gives us some direction with our membership as to where we’re going to go because we were kind of up in the air with what was going to happen. We were looking at anywhere from [a] 75 to 100 member layoff if that equivalency agreement wasn’t signed.”
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Now, the local UMWA membership has a few more years to plan for what may come next after Boundary Dam 4 and 5 shut down. This includes waiting for some miners to retire, to drop jobs through attrition instead of layoffs.

Job losses will still happen when Boundary Dams 4 and 5 close. Dukart said people aren’t too worried yet, but he expects anxiety to increase now that the equivalency agreement is signed.

The local UMWA branch has around 300 members, plus 100 out of scope staff working at Estevan’s coal mines, according to Dukart.

The Shand Power Station may continue operating past 2030 if it is retrofitted with carbon capture and storage (CCS) technology. A decision on this is years away, according to the province.

Retrofitting the facility is a popular idea in Estevan as it would provide greater economic certainty in the next decade.

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Estevan’s main economic drivers include mining, power generation, oil, and agriculture. With the oil industry still experiencing a downturn, Dukarty wonders what’s next for miners.

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“I’m not sure what people are going to do. They’re talking solar, wind farms, and geothermal, but they don’t employ the amount of people that we’re going to be losing from the mining industry,” he said. “It’s going to be tough.”

Compounding job losses

The mines are an attractive employer, as jobs can include a high salary. However, with the looming loss of these high paying positions, it has the city and chamber of commerce bracing for jobs impacted in the broader economy.

“We’re probably looking at between two to four jobs that will be affected for every job lost between SaskPower and the mines,” Estevan Chamber of Commerce president Jackie Wall said.

It’s expected 50 SaskPower jobs will be moved out of Estevan when Boundary Dams 4 and 5 shut down. Add that to upwards of 100 lost mining jobs, and Estevan could see 450 to 750 total jobs impacted.

“Even if you take a general estimate of $100,000 per [mining] job, and you multiply that by 100 jobs you really get to see how that affects our community,” Wall said.

“Plus, if those workers decide they’re leaving our community they take their spouse with them, they take their children with them, so we have less enrolment in our schools. It affects everything throughout the community.”

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Economic development plans

A coal miner himself, Estevan Mayor Roy Ludwig knows the clock is ticking. Like Dukarty, he’s pleased to see the equivalency agreement signed because it gives the city time to plan for the future.

Ludwig is leading an economic development committee that involves city council, the chamber of commerce, USWA, and other stakeholders.

Through federal funds to help coal communities transition, the city was able to hire a full-time economic development officer. That position’s mandate is straight forward.

“[That position will] see what would work in our community, talk to our existing business people, look at possible potential expansion, or maybe new businesses. What would be a good fit for our community,” Ludwig explained.

With oil experiencing a prolonged struggle, and the base industries of power generation and mining bracing for a hit, Estevan is looking outside the box for new industries.

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“We’re looking at Medicine Hat [which] has a lot of greenhouses for pot. So we feel if Medicine Hat can do it, why can’t we? We’re looking at greenhouses for the production of pot,” Ludwig said.

Estevan’s economic development officer will be meeting with Aurora Cannabis later this week, with the hope of further conversations.

In their past two budgets, the federal government announced $35 million and $150 million to help coal towns diversify their economies.

Both Premier Scott Moe and Saskatchewan Environment Minister Dustin Duncan have said they’re waiting to find out more on how these funds will be divided before pledging provincial support. Both noted the decision to wind down coal was made by the federal government.

Wall and Ludwig said it has been frustrating to not have the province be an active voice at the table on this issue, adding they see the provincial government as pushing responsibility solely to Ottawa.

This doesn’t mean communication channels aren’t open. Ludwig said they’re now lobbying the province for $5 million to contribute to economic diversification and attracting more industry to the changing city.

“We would like the province to take a hard look and say, ‘oh Estevan is struggling right now, especially looking at 2021 and 2024, let’s see if we can’t get manufacturing base down there,’” Ludwig said.

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The equivalency agreement is currently scheduled to come into force on Jan. 1, 2020.

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