Canary in the Coal Mine: The Government of Alberta makes itself vulnerable to litigation by failing to consult on major policy shifts

Environmental laws and policies change often. Sometimes it’s little tweaks here and there; other times, it’s major shifts in regulatory and decision-making processes.  Choosing to make major legislative and policy shifts without meaningful consultation with Indigenous communities or with members of civil society groups (such as environmental and community groups) and the general public can make the government vulnerable to litigation.  

This has been the case with Alberta’s coal policy. In June of 2020, without prior public consultation, the government rescinded the coal policy that had been in place since 1976.  This resulted in public outcry and the policy was reinstated a few months later.  More recently, at the end of 2024, the government announced new policy direction for coal called the Coal Industry Modernization Initiative (CIMI). Unfortunately, rather than undertaking widespread public consultation, it seems consultation is being limited to the coal industry (see previous blog).  The government is now facing litigation associated with these significant policy shifts – litigation that may well have been avoided by undertaking meaningful, widespread consultation to develop comprehensive land-use plans to address the concerns associated with coal development.

Significant Shifts in Alberta’s Coal Policy

The government is currently facing two types of litigation: coal companies claiming de facto expropriation and First Nations challenging an order to lift a ban on certain coal mining. In order to understand these legal actions, it is necessary to outline the various Ministerial Orders that were made to enact changes to Alberta’s coal policy.

As a starting point, A Coal Development for Alberta (Coal Policy) was released in 1976.  Much of the Coal Policy had been rescinded by 2020 (due to replacement with regulatory processes under legislation) but four land-use categories for coal exploration and development in the Eastern Slopes remained in place.  On category one lands, no exploration or development is allowed.  Lands in categories 2, 3 and 4 are not automatically open to exploration and land in categories 3 and 4 are not automatically open to development.  The Coal Policy requires that particular care be taken to review applications for exploration and/or development in these areas.

From 2020 to 2025, a series of Information Letters and Ministerial Orders were issued which first rescinded the Coal Policy, then reinstated the Coal Policy, and created and removed moratoriums on coal projects. Here is a list in chronological order:

  • IL 2020-23 (May 15, 2020): The Government of Alberta announces that the Coal Policy is rescinded and that the coal categories no longer applied. The IL states that “all restrictions on issuing coal leases within the former coal categories 2 and 3 have been removed. Alberta will continue to restrict coal leasing, exploration and development within public lands formerly designated as coal category 1.”  In addition, a 120-day moratorium on new coal lease applications is put into place to allow Alberta Energy to work through a backlog of active coal lease applications (this is further explained in Coal Information Bulletin 2020-02 issued the same day).
  • Coal Information Bulletin 2020-03 (September 14, 2020): The Government of Alberta announces that the 120-day moratorium on new coal lease applications has been lifted and new requests for coal rights will be reviewed in accordance with the process described in IL 2020-43 (issued the same day). Coal rights in areas previously classified at category 1 remain unavailable for lease.
  • MO 054/2021 and IL 2021-07 (February 8, 2021):  The Government of Alberta announces in IL 2021-07 that the Coal Policy is reinstated and will consider the coal categories in its decision-making related to coal.  This includes ceasing issuance of any new coal exploration approvals in category 2 lands pending widespread consultations on a new coal policy.  MO 054/2021 provides direction to the AER that includes not issuing any new approvals for coal exploration on category 2 lands and confirming that any proposals for exploration and development on category 2 lands do not involve mountain top removal.
  • MO 093/2021(April 23, 2021): This MO directs the AER to suspend or pause all approvals for coal exploration on category 2 lands until December 31, 2021 (or such other date specified by the Minister).  By a letter dated November 10, 2021, the Minister directed the AER to continue the suspension/ pause until further notice to allow the Coal Policy Committee’s report to be completed and reviewed.
  • MO 002/2022 (March 2, 2022): This MO provides direction to the AER that no coal exploration or commercial coal development is to be permitted within category 1 lands.  Further, all approvals for coal exploration on category 2 lands in the Eastern Slopes will continue to be suspended and no new applications will be accepted until there is notice otherwise.  Except for lands subject to an advanced coal project or an active approval for a coal mine, all approvals for coal exploration or development on category 3 and 4 lands in the Eastern Slopes are suspended and no new applications will be accepted.  An advanced coal project is one for which the proponent has submitted a project summary to the AER for the purposes of determining whether an environmental impact assessment is required.  An active approval for a coal mine means that a license has been issued under the Coal Conservation Act. Complementary policy guidance on restrictions for coal leases was provided by IL 2022-09 (March 8, 2022).
  • IL 2025-06 (February 10, 2025): This IL replaces IL 2022-09 and provides policy guidance on coal tenure.  It indicates that, until further notice, no new coal lease applications will be accepted on category 2, 3and 4 lands within the Eastern Slopes.  The restriction against accepting coal lease applications on category 1 lands will also continue.  Within active coal mine permit areas, applications for lease will be accepted where the lease is required for approved mining activity.

Effectively, this policy back and forth created a period of time between the rescission and reinstatement of the Coal Policy wherein a backlog of stored application for coal licences in the Eastern Slopes were processed and granted.  And then, with the direction to the AER to not issue any new coal approvals on category 2 lands, those leases could not be developed.  With the subsequent reversal in 2025, those leases are once again open to seek approvals from the AER for exploration and development.

Litigation by Coal Companies

As explained in our previous blog, five coal companies that acquired coal rights in the Eastern Slopes area filed lawsuits against the Government of Alberta.  The primary basis for the lawsuits is that the decision in 2020 to open up lands in the Eastern Slopes to coal leases, followed by the decision in 2021 to place a moratorium on coal exploration and development approvals amounted to a de facto expropriation.  Essentially, the coal companies are arguing that the policy shifts meant that their coal leases were effectively taken by the government because the relevant land is regulated in such a way as to deprive the coal lease holders of all reasonable uses of their leases. 

It appears that 2 of the coal companies have recently settled their lawsuits with the provincial government: see Joel Dryden (July 3, 2025) “Alberta reached settlement with 2 coal companies over policy change”. Because the settlement agreements are confidential, the settlement amounts, and other agreed-upon actions are unknown. It is not clear if the other lawsuits will continue or if the other coal companies will be satisfied with the 2025 Ministerial Order that lifts the moratorium.

Litigation by First Nations

The provincial government is also faced with litigation by two First Nations arising from MO 003/2025.  The Siksika Nation and the Kainai Nation have filed judicial review applications challenging the decision to lift the coal mining moratorium: see Siksika Nation media release and Kainai Nation Community Update on Coal Mining.  The Siksika Nation Application for Judicial Review argues that MO 003/2025 creates an “internally inconsistent policy framework which, despite the reinstatement of the 1976 Coal Policy, permits certain coal mining projects in the Eastern Slopes to resume” (para. 4).  Further, it is noted that this policy shift is contrary to the clear recommendations of the Alberta Coal Policy Committee. 

The Siksika Nation argues that MO 003/2025 is unlawful because it was made in breach of the duty to act honourably and consult owed to the Siksika Nation, in breach of the Minister’s duty of procedural fairness, and fails to demonstrate a justifiable, transparent and intelligible rationale for making the order.  The Siksika Nation seeks to have MO 003/2025 set aside, along with an order requiring the Minister to consult on coal mining policy and its implementation. Presumably, similar arguments are advanced, and similar relief is sought by the Kainai Nation.

What do we recommend?

The ELC recommends a renewed governmental commitment to regional planning under the Alberta Land Stewardship Act(ALSA).  This aligns with the recommendations by the Coal Policy Committee that coal exploration and development be guided by ALSA regional and subregional plans, and that these plans be completed before any major coal project approvals are considered.

Regional planning provides an opportunity for transparent and considered shifts in public policy, avoiding rapid and contradictory changes in policy that can trigger public outcry and litigation.  This is in part because effective regional planning requires extensive and meaningful involvement of the public and consultation with Indigenous communities (and the resultant plans should reflect those consultative efforts).  As well, sections 19 to 19.2 of ALSA contemplate and address situations where compensation or review of regional plan provisions may be warranted which provides a legislated process that avoids the need for litigation.

An issue-specific plan developed under ALSA can provide the necessary clarity and specificity as to what type of mining operations, if any, are appropriate in the Eastern Slopes.  Regional planning can also be used to address the significant water and habitat concerns that are associated with coal development.  Ultimately, regional planning that is conducted with extensive and meaningful public involvement and in consultation with Indigenous communities can lead to transparent and coherent policy around coal exploration and development in the province.

THANKS FOR YOUR SUPPORT

Your support is vital for stronger environmental legislation. As Alberta’s leading environmental charity, the Environmental Law Centre has served our community for over 40 years, providing objective guidance on crucial legislative changes. Your contribution helps protect our environment for future generations. 

Please support our work: Share, engage and donate to the ELC

Download File (PDF)

Support Stronger Environmental Legislation

We provide objective information and respected advice on changing environmental legislation and regulations; we are one of the only charities in Alberta that provide this to Albertans.