Study finds that for every job lost in the fossil fuel sector, 42 jobs have been created by other industries
Ottawa, Ont. – New research released today demonstrates that with prudent long-term planning, Canada’s transition to a low-carbon economy can be managed without causing unemployment for fossil fuel workers. “Employment Transitions and the Phase-Out of Fossil Fuels,” a report from the Centre for Future Work and commissioned by Environmental Defence, finds that a 20-year phase-out of fossil fuels implies an annual reduction of fossil fuel employment of around 8,500 jobs annually – the number of jobs typically created by the Canadian economy every ten days.
With a clear timetable for phase-out, combined with generous supports for retirement, redeployment, and regional diversification, that gradual transition could occur without any involuntary lay-offs.
“It is undeniable that the world is transitioning away from fossil fuels, much faster than expected even a few years ago,” said the study’s author, economist Dr. Jim Stanford. “Fossil fuel jobs are going to disappear in Canada, whether we want it or not. Our choice is to manage that transition, avoiding severe hardship for individuals and communities, or else wait until far more painful and chaotic changes are forced upon us.”
The report shows that the relative importance of fossil fuel work has already been declining since 2014 at a pace consistent with its complete phase-out over two decades, yet Canada’s labour market (until the COVID pandemic) remained strong. The pandemic caused the loss of another 17,500 fossil fuel positions to September. Several Canadian oil companies, including Enbridge, Husky/Cenovus, and Suncor, have announced permanent layoffs, suggesting that fossil fuel employment is unlikely to rebound after the pandemic.
“Historical and international experience confirms that fossil fuel jobs can be phased out over time, while still maintaining vibrant job markets and secure livelihoods for workers,” Stanford said. By examining previous labour market transitions in Canada, as well as low-carbon transitions abroad, the report proposes ten principles to guide effective and fair transitions for workers and communities during the coming phase-out of fossil fuels. These principles include: support for increased labour mobility; incentives for early retirement; income protections for affected workers; skills training; and stronger representation for workers in negotiating transition plans.
“Canadians want action on climate change, but we also don’t want to send our neighbours who work in the fossil fuel sector into freefall,” added Dale Marshall, National Climate Program Manager at Environmental Defence. “Yet the last decade has made it clear that that’s what will likely happen if we let the oil companies manage the energy transition themselves – they will simply cut jobs, leaving behind unpaid taxes and a huge mess. As a country, we can do better for both the climate and oil patch communities, instead of leaving our future to the good will of oil executives.”
Other key findings of the report include:
• There is no correlation between fossil fuel employment and overall labour market performance. In fact, as the share of fossil fuel jobs in total employment fell quickly over the past five years, Canada achieved record-low unemployment rates (pre-pandemic).
• For every job that disappeared in fossil fuel industries since 2014, 42 jobs were created in other industries.
• Fossil fuel industries create fewer jobs per unit of output than any other sector: just a single job per $1 million in industry GDP, compared to 8.6 jobs per $1 million across the economy.
• Of the 152 census-identified communities across Canada, just 18 rely on fossil fuel industries for five per cent or more of total employment. These communities should be provided with targeted, concrete programs to support diversification and alternative job-creation.
• Most fossil fuel jobs (56%) are located in cities (including head office, technical, manufacturing, and distribution roles). Transitions will be easier in cities because of these workers’ more transferable skills and the greater availability of alternative job opportunities.
“This research makes it clear that governments’ hesitancy to move on fossil fuel phase out isn’t justified by economic factors,” added Marshall. “It’s not fair to workers in the oil and gas sector to keep propping up an industry that must inevitably decline, and is already cutting jobs and eroding working conditions. Governments must start implementing this transition now.”
About ENVIRONMENTAL DEFENCE (www.environmentaldefence.ca): Environmental Defence is a leading Canadian environmental advocacy organization that works with government, industry and individuals to defend clean water, a safe climate and healthy communities.
About CENTRE FOR FUTURE WORK (www.centreforfuturework.ca): The Centre for Future Work is a labour economics research institute with offices in Vancouver and Australia.
To read the full report, “Employment Transitions and the Phase-Out of Fossil Fuels,” by Dr. Jim Stanford, please visit: https://centreforfuturework.ca/2021/01/18/employment-transitions-and-the-phase-out-of-fossil-fuels/
A summary of the report, “Steady Path: How the Transition to a Fossil Free Canada is in Reach for Workers and Their Communities” by Environmental Defence in English and French, can be accessed at: environmentaldefence.ca/steadypath
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For more information or to arrange an interview, please contact:
Barbara Hayes, Environmental Defence, bhayes@environmentaldefence.ca
