May 21, 2024

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The big question at the heart of the feud over ‘sustainable jobs’

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The big question at the heart of the feud over ‘sustainable jobs’

How many new jobs do you have to create to transition a workforce? 

It depends who you ask.

But the answer is at the heart of an intergovernmental spat with significant implications for the economy, employment and the environment. 

About 138,000 people work in oil and gas in Alberta, per Statistics Canada. A federal ministerial briefing note put the number at 187,000.

And the federal government hasn’t proposed how many jobs it’s aiming to create to replace employment lost in the pursuit of net-zero emissions targets.

The Liberals first talked about a “Just Transition” in the 2019 election.

Fast forward to 2023. 

A formal jobs action plan is expected in two years. That means we will have spent more time anticipating the strategy than there is time to act on it by interim 2030 emissions deadlines. 

The first official jobs legislation came last week. 

Bill C-50 creates a council to advise the government on clean energy jobs, requires Ottawa come up with a sustainable jobs plan every five years, and establishes a secretariat who would oversee the government’s work on building a clean energy sector.

Call it whatever you like — Just Transition or Sustainable Jobs or a plan to plan to come up with a plan — the pretzeled rhetoric is leaving a big question mark hanging over the workers.

As University of Calgary engineering student Kiran Kuruvinashetti told CBC News last month when discussing the future of the province: “Everything is good here … the only limitation is the jobs.”

A loss or a net gain?

That isn’t federal Natural Resources Minister Jonathan Wilkinson’s concern. 

“I am actually quite worried that there are so many opportunities … we will not have enough workers to fill the jobs,” he said at the start of the year.

He’s touted building retrofitting, construction, carbon capture and critical mineral mining. 

An RBC report projects between 235,000 and 400,000 clean energy jobs could emerge from the transition. That same report estimated 15 per cent of the country’s labour force will be disrupted by the shift by 2032.

But the federal government hasn’t said where, when or how those jobs will materialize. The legislation didn’t state a job creation goal. It didn’t set phaseout targets. It didn’t give a firm timeline. 

If you can’t quantify the impact of a specific action, wouldn’t it be hard to design a policy to address it?

The void left by a lack of details often is filled by political spin. For example, a lack of specifics about Ottawa’s ‘Just Transition’ plan provided space for Alberta’s premier to warn that the strategy was a threat to 2.7 million jobs (this turned out to be a misreading of a briefing note).

While the impact on jobs is muddy, companies are also wary about what it means for their future. 

Ottawa’s new clean jobs plan receives criticism for potentially harming oil workers

The federal government released its new sustainable jobs plan, unveiling a framework for transitioning workers from the fossil fuel industry toward clean energy. The Liberal plan has received criticism from conservative voices claiming it harms Canada’s energy industry.

Federal 2030 goals (a 40 per cent reduction below 2005 levels) would require an emissions cut so large the industry has called it a de facto production cap.

In 2021, the oil and gas sector produced more than a quarter of Canada’s total emissions. Oil titans are quick to emphasize that net-zero for them is about decarbonizing production, not killing it.

Oil companies say they aren’t afraid of transitioning their business to net-zero, but they’re asking for investment and for regulatory certainty so they can pursue projects like the $16.5-billion carbon capture hub planned for Alberta’s oilsands.

Cenovus, one of the members of the Pathways Alliance, says the consortium could create 35,000 jobs on the way to net-zero.

Miles away from a kumbaya moment

As the calendar flips closer to 2030, Canadian policies have inched forward compared to the relative leaps observed in the United States, where tens of billions of dollars in green energy investment incentives are in play via the Inflation Reduction Act.

And while that chasm of competitiveness grows, there’s a similarly large political rift between federal and provincial governments.

Ottawa is also proposing an emissions cap that could set limits at a total not seen since 1992. Premier Danielle Smith has warned the federal government about unilaterally introducing policies that would impact Alberta oil and gas. 

“There should be the ability to have a kumbaya moment,” Smith said. “But the fact of the matter is there’s a hard line.”

Wilkinson has pushed back in that jurisdictional tiff.

“I think it’s a mistake for anybody to be drawing a clear line in the sand saying we’re not willing to compromise on anything,” he said.

The income of thousands of Canadians may end up relying on a compromise due to the ripple effect the industry has on the labour market.

Statistics Canada reports every direct job in oil and gas leads to as many as five additional related jobs in sectors like sales, food and retail. 

Employment in Alberta natural resources shot up 20 per cent in 2021 as the sector rebounded from a collapse the year before. 

The reality is a stark one. In any given year, about a quarter of Alberta’s GDP is based on natural resources. Alberta has the fourth largest oil reserve in the world. But prices are as volatile as the geopolitics that influence them. 

Net-zero scenarios modelled by the Canada Energy Regulator’s 2023 annual report projects emissions from oil and gas production will decrease by 90 per cent by 2050. And that could come with a 76 per cent reduction in production. 

(The regulator modelled two other scenarios — one in which Canada achieves net-zero by 2050 but large developing countries like China and India move at a slower pace. In that version, the CER said global oil prices would likely remain above $60 US per barrel all the way to 2050, with Canadian oil production declining just 22 per cent.)

Both Alberta and Ottawa are providing support for the development of carbon capture, utilization and storage (CCUS). Both support the expansion of the Trans Mountain pipeline. Both are aiming for carbon neutrality by 2050. 

But their differences in approach are fuelling high-level sparring matches, each asking why the other won’t think of the workers. 

Meanwhile, global markets and investor decisions independently push toward decarbonization.

Add it all up, it’s a situation that will leave many energy workers searching for someone to give them an answer about what happens to their jobs, families and wallets in the new clean economy. 

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