Employment & Unemployment,  Environment & Work,  Future of Work,  Research

Transition Plan for Workers can Prevent Unemployment as Fossil Fuels are Phased Out

New research from the Centre for Future Work demonstrates that with prudent long-term planning, the coming phase-out of fossil fuel production and use can be managed without causing unemployment for fossil fuel workers. 

Employment Transitions and the Phase-Out of Fossil Fuels, by Jim Stanford (Economist and Director of the Centre for Future Work) shows that fossil fuel industries directly account for 170,000 jobs in Canada – less than 1% of total employment. 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 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, which was commissioned by Environmental Defence, 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 report reviews historical and international experiences with employment transitions, confirming that fossil fuel jobs can be phased out over time while still maintaining vibrant job markets and secure livelihoods for workers. 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.

Please see the full report, Employment Transitions and the Phase-Out of Fossil Fuels, by Dr. Jim Stanford.

A summary of the report, “Steady Path: How the Transition to a Fossil Free Canada is in Reach for Workers and Their Communities,” prepared by Environmental Defence (in English and French), and an accompanying video, can be accessed here.

Jim Stanford is Economist and Director of the Centre for Future Work. He divides his time between Sydney, Australia and Vancouver, Canada. Jim is one of Canada’s best-known economic commentators. He served for over 20 years as Economist and Director of Policy with Unifor, Canada’s largest private-sector trade union.