Environment & Work Archives - Centre for Future Work

Annotated Bibliography on the Net Employment Benefits of the Energy Transition

Jim Stanford — Thu, 23 Apr 2026 17:11:57 +0000

Compiled by Jim Stanford

Investments in sustainable energy and energy conservation are larger than investments in fossil fuel energy systems. Moreover, the work involved is more labour-intensive than fossil fuel projects (which have very small labour inputs relative to the scale of capital investments or GDP). For both reasons, the shift from fossil fuels to sustainable alternatives will definitely create far more jobs than are lost in fossil fuel industries as the economy transitions to net-zero.

This is a summary of previous research on the net employment benefits of sustainable energy projects, and other dimensions of the energy transition. It reviews several studies of the employment impacts of renewable energy and related investments in Canada, and then several international reports on parallel trends in the global economy.

Previous Canadian Studies

In a report for the Pembina Institute, Kaddoura et al. (2020) forecast potential new employment in four areas of emissions-reducing investment in Alberta, over a ten-year period. The report estimated that over 67,000 new jobs would be created in the province over a decade, driven by investments in four broad areas: renewable electricity generation, public transit and electric vehicle infrastructure, energy efficiency improvements in buildings and industry, and a program of remediation and methane reduction in oil and gas extraction facilities. That is enough new employment to offset two-thirds of all jobs in the province’s existing petroleum industry.
In neighbouring B.C., Lee and Klein (2020) estimated the employment impacts of investing 2% of provincial GDP in renewable energy and energy conservation initiatives (as proposed by Nicholas Stern in his landmark international report, 2006). They projected an investment programme of this scale would create and maintain 42,000 jobs in the provincial economy – far more than are presently supported by fossil fuel industries in that province. Due to the higher labour content of alternative energy and related products, shifting investment from fossil fuel production to renewable energy, energy efficiency, and decarbonized transportation systems generates net employment growth.
Another provincial-focused study was published by the Ecology Action Centre (2019) for Nova Scotia. This research simulated the employment impacts of a programme to reduce provincial GHG emissions by 50% by 2030, in line with Canada’s Paris Agreement commitments. Investments in renewable energy generation, energy efficiency, and public transit would support the creation of 15,000 net new jobs in Nova Scotia – and thousands more spin-off jobs elsewhere in Canada. The province would benefit from expanded GDP growth, enhanced tax revenue, and $675 million in additional annual personal income (measured in real 2019 dollar terms).
A project initiated by the David Suzuki Foundation modeled the investment and technological dimensions of an ambitious effort to expand and decarbonize Canada’s electricity system, through the rapid deployment of renewable power sources and conversion of heating, transportation, and industrial energy uses to electric power (Thomas and Green, 2022). The report also estimated the employment effects of this investment programme, which would achieve a net-zero electricity system by 2035. The analysis considered only direct construction and operation jobs associated with economy-wide electrification; it did not include indirect (upstream) or induced (downstream) spin-off jobs (such as jobs in manufacturing activities spurred by electrification), nor jobs in other emerging technologies (such as battery storage). In this regard, the forecast is very conservative. The report expects about 75,000 new jobs related to electricity generation and infrastructure to be created over the first 15 years of investment. Proportionately, the largest job growth is experienced in Alberta and Saskatchewan, where the GDP and employment gains from electrification are especially significant.
Jobs for Tomorrow (Bridge and Gilbert, 2017), focused on the impacts of the energy transition for employment among building and construction trades. That report catalogued likely investments across three broad categories of emissions-reduction activity: renewable energy generation and transmission; building energy efficiency and district energy systems; and transportation. It then estimated employment impacts of those projects on the basis of previously published employment coefficients. Across those three categories of activity, the report projected that a total of 3.3 million person-years of employment would be created in construction trades by 2050. Two-thirds of that growth was concentrated in non-residential construction (as builders updated existing structures, and built new ones, to incorporate rigorous new energy efficiency standards). Clearly, the massive investments required to facilitate the energy transition in Canada and meet international emissions-reduction commitments imply very strong ongoing demand for construction trades work.
A sequel to that 2017 report, now titled Jobs for Today, updated those projections of construction jobs arising from major investments in renewable energy systems, energy conservation, and sustainable transportation (Bridge and Stanford, 2025). This report surveyed evidence on the impacts of sustainable energy investments that are already visible on Canadian labour markets. Then it forecast the scale of investment spending that would be required to meet Canada’s official net-zero commitments in three broad areas: the full range of non-emitting energy systems (hydro, solar, wind, geothermal, nuclear, and tidal) and associated transmission investments; investments in energy-efficient buildings and community infrastructure (including new super-efficient industrial, commercial, and institutional buildings, retrofits of existing buildings, and energy-conserving district energy systems), and investments in sustainable transportation systems (including EV charging networks, urban public transit, and high-speed inter-city rail). The application of employment coefficients derived from official economic data and other published data can then translate those investment forecasts into employment projections. These investments are forecast to support the creation of 6.3 million to 9.5 million jobs years of work for construction and building trades workers – equivalent to an average of 235,000 to 350,000 new jobs on average over the next 25 years. The estimates do not include indirect or spin-off jobs in supply chains or associated manufacturing.
A deeper dive into the impacts of the energy transition for one specific trade – electricians – was undertaken by Electricity Human Resources Canada (2023). This report compiled estimates of new jobs arising from the expansion of renewable energy generation, along with transmission expansion and upgrades. The shift to renewable energy and electrification will accelerate demand for electricians considerably. The report projects net job growth of 12,000 positions in the five years ending in 2028. That is on top of the need to replace over 15,000 anticipated electrician retirements in the same period. There is no doubt that electricians are an occupation with increasing employment opportunities in coming years. The report urged additional investments in training and apprenticeships by employers and governments.
Another specific construction trade that will experience new job opportunities from the growing focus on energy conservation is insulators. Calvert and Crabtree (2022) and Calvert (2023) relate the experience of Local 131 of the insulators’ union (in New Brunswick), which pro-actively undertook an independent program of free energy audits for owners of commercial and industrial buildings. The goal was to highlight for building owners the operational and cost savings from upgraded insulation and energy conservation upgrades. The campaign was successful and generated significant amounts of new work for members of the union. Other insulator union locals have also launched industry awareness programs to promote energy retrofits, similarly generating new work opportunities for union members (Calvert and Tallon, 2016; Calvert, 2019).
The positive employment effects of electrification were further explored in a report by the David Suzuki Foundation (Thomas and Green, 2022). This report mapped the investments required to support deep electrification of Canada’s economy, on the strength of massive investments in renewable energy generation, transmission, distribution and storage facilities. To decarbonize existing electricity generation (by 2035, as per existing federal standards), and then meet the extra demand for electricity from the spread of emissions-free technologies in other sectors (such as transportation and heating), an 18-fold increase in total wind and solar generation will be needed by 2050. Some 1.5 million person-years of work will be created in the construction, operation, and maintenance of new wind and solar generating capacity, and associated battery storage. The implications of this ambitious electrification strategy for carbon emissions are hopeful: this plan would reduce emissions by a cumulative total of 3.2 billion tonnes in the period to 2050.
Clean Energy Canada has published successive reports estimating employment growth in what it calls Canada’s “clean energy economy” (Clean Energy Canada, 2019, 2021; Navius Research, 2019). The research estimated that as of 2020 some 430,000 jobs already existed in a broadly-defined clean energy sector: including renewable energy production and distribution, construction and retrofit of energy efficient buildings, clean energy transportation, and specialized clean energy industries (such as low-carbon machinery, and emission detection and control). That was an increase of over 130,000 jobs (or over one-third) from 2017. And under the climate policy outlook adopted by the federal government, clean energy jobs were forecast to grow by another 200,000 positions by 2030 – outweighing a projected decline in fossil fuel-related employment of 125,000 positions over the same time. Clean Energy Canada’s modeling confirms net gains in employment from the transition to clean energy will be experienced in all parts of Canada, including in fossil fuel-producing provinces.
A separate report prepared for Clean Energy Canada by Dunsky Energy Consulting (2018) considered the macroeconomic and employment effects from energy efficiency improvements, as mandated in the previous federal-provincial Pan Canadian Framework on Clean Growth and Climate Change. The Dunsky modeling traces several channels of impact from the energy efficiency provisions of that federal-provincial agreement: including energy efficiency standards in new buildings, retrofits of existing buildings, new energy efficiency standards in appliances and equipment, and industrial energy efficiency. Those efficiency improvements were expected to meet 25% of Canada’s Paris commitments for emissions reduction. The economic stimulus from energy efficiency comes from two major channels: increased demand for efficiency-related goods and services (including building construction and retrofit), and reallocated savings on energy costs by consumers and businesses (which redeploy their energy savings into other forms of expenditure). Those effects more than offset the reduced economic activity associated with energy production resulting from reduced demand for the energy. The jobs impact of the efficiency improvements was estimated at an average net gain in ongoing employment of 118,000 over a 13-year period (to 2030), and a 1% increase in national GDP over the baseline trajectory.
Xuereb and Hillel (2023) simulated the employment impacts of an ambitious programme of proposed investment in a range of energy transition and conservation initiatives, worth a cumulative total of $287 billion over five years. (The details of this investment programme are described in Lee et al., 2023.) Based on an allocation of investment spending across different components of activity associated with each project category, this research estimated that investments on this scale would support between 187,000 and 226,000 new jobs by the fifth year of the programme. The ‘low’ estimate includes only direct and supply-chain jobs associated with the new investments; the ‘high’ estimate includes downstream jobs in consumer industries, stimulated by the increased incomes (and hence consumer spending) generated in the renewable energy and related industries.
Researchers at RBC mapped the intersectoral employment transitions and associated skills and training requirements resulting from the shift to a net-zero economy in Canada (Guldimann and Powell, 2022). Like other research, this study projected enormous job-creation potential in clean energy, infrastructure, energy conservation, and related fields. The study forecasts between 235,000 and 400,000 new jobs will be created in occupations whose tasks and qualifications have changed because of the energy transition. That total job-creation would be even larger if Canada stepped up its investments in new energy systems; the report estimates $60 billion per year in incremental capital spending estimated is necessary to meet climate targets. New work in these evolving and emerging occupations will substantially outweigh the gradual decline in employment in traditional fossil fuel energy production and use. RBC expects existing skills shortages for construction, managerial, technical, and manufacturing workers to become even more pressing as the energy transition gathers pace, and these net new jobs are created. The report calls for urgent action by governments, employers, and educators to prepare for the coming surge in demand for skilled workers in fields related to sustainable energy.
The Centre for Future Work developed a detailed breakdown of the various channels through which employment adjustments can be facilitated during a gradual phase-out of fossil fuel production and use, and corresponding ramp up of renewable energy and energy conservation projects (Stanford, 2021). In this forecast, a gradual phase-out of direct fossil fuel-related employment (estimated at 159,000 jobs across Canada in 2019, or 0.9% of total employment) would be possible over a 20- or 25-year phase-out (consistent with reaching net-zero targets by 2050), with no involuntary layoffs. Much of this transition would be facilitated through retirements, since workers in fossil fuel industries are older than the economy-wide average. New jobs created in renewable energy and other sustainable activities (including amelioration of former fossil fuel production sites) would be important in smoothing the transition. But there are many other pathways through which fossil fuel jobs could also be replaced, including through job-creation in other sectors (such as construction, non-fossil minerals, transportation, and private and public services). Supports for the roughly 4000 non-retiring fossil fuel workers who would need redeployment each year (according to that phase-out timeline) could include income insurance programs, retraining supports, relocation incentives, and small business start-up grants. Successful transition plans in other examples of fossil fuel phase-out (including Germany’s gradual shut-down of black coal mining, or Ontario’s phase-out of coal-fired electricity) prove that gradual, supported transitions of this sort can be accomplished without lay-offs, so long as timelines are long and gradual, and affected workers are supported with a portfolio of adjustment supports.

International Research

All countries are grappling with the economic and labour market issues related to the energy transition, and there is now a large body of international research attesting to the powerful employment-creating effects of major renewable energy and emissions-reduction investments. Here we summarize a few of the more notable international research efforts:

The International Energy Agency (2021) has developed a detailed global forecast of employment opportunities generated by worldwide investments to meet commitments to net-zero emissions by 2050. These investments will involve trillions of dollars of new capital spending on renewable energy systems, transmission facilities, energy conservation, and related construction work. These investments would create 30 million new jobs globally by 2030: 14 million positions in clean energy systems, and 16 million in construction and retrofit work. That will far more than offset the 5 million jobs expected to disappear from the fossil fuel sector over the same period, as fossil energy is gradually phased out. The IEA forecast does not include new jobs in related manufacturing activity, nor the spillover employment (through upstream supply chains and downstream consumer industries) spurred by these enormous investments.
Annual research has been published for a decade by the International Renewable Energy Agency (IRENA), documenting the steady growth of global employment in renewable energy activities. Its most recent report (2023) tallies 13.7 million renewable energy jobs worldwide in 2022, up 8% from the previous year – and almost double the number 10 years earlier (in IRENA’s first report). Two-thirds of those jobs are in Asia, and over 40% are in China alone (which leads the world in new solar and wind installations). The biggest single sector for renewable energy employment is solar photovoltaic power investments, supporting 4.9 million jobs worldwide in 2022. But the employment benefits of renewable energy are widespread across several other sectors, including wind, hydro, bioenergy, geothermal, and heat pumps. The IRENA tally does not include jobs in energy conservation or upgrading work, nor jobs in manufacturing renewable energy equipment. IRENA’s research highlights especially strong job-creation potential in decentralized projects, such as small-scale hydropower and decentralized solar installations.
A project to catalogue the global employment benefits from renewable energy and emissions-reduction investments in five case-study countries was undertaken by the United Nations International Development Organization and the Global Green Growth Initiative (2015). This project estimated the macroeconomic and employment effects of an investment programme worth 1.5% of national GDP in Brazil, Germany, Indonesia, South Africa, and South Korea. The investment was divided between renewable energy projects and energy conservation and emissions reduction projects. The employment impacts of these investments considerably outweighed employment declines associated with fossil fuel production. The employment benefits of energy transition investments were greater in developing countries (due to lower wage levels and greater labour-intensity of production methods). Final employment created for each $1 million (U.S.) of investment ranged from 9.5 in Germany to over 100 in Indonesia.
An especially ambitious modeling exercise was undertaken by Jacobson et al. (2017) to simulate a road-map for steep emission reduction (consistent with limiting global warming to 1.5 degrees C) in 139 countries by 2050. The research first compiled a plan for the scale and composition of investments required to achieve such emissions reduction. It then estimated the combined employment effects of those investments, across all 139 countries included in the project, on the basis of employment coefficients for specific types of investment spending and energy production. It anticipated a total of 52 million new jobs to be created by those investments over the period to 2050, almost double the 27 million jobs expected to disappear from fossil fuel production and use over the same period.
A team at the University of Massachusetts Amherst has developed a template methodology for estimating the employment gains from green energy investment plans in various U.S. states, and nationally. One recent application of that template is reported by Pollin et al. (2023), describing the estimated employment impacts of three major energy-related initiatives of the Biden administration: the Bipartisan Infrastructure Legislation, the Inflation Reduction Act, and the CHIPS Act (Creating Helpful Incentives to Produce Semiconductors). Applying employment input coefficients across all industries affected by the various measures in that Act, and capturing indirect (supply chain) and induced (consumer spending) effects, the research predicted an average of 2.9 million new jobs over the first five years of the measures. The construction sector alone was expected to add almost one-half million new jobs under the combined effect of the three bills.
The C40 network of mayors of major global cities (C40 Cities Climate Leadership Group, 2021) modeled the employment impacts from a proposed major green investment programme for 96 cities around the world – recognizing that large urban centres face particular challenges and opportunities in transitioning to renewable energy. Their green recovery scenario sees over 50 million net new jobs created in those city regions by 2030, powered by capital investments in renewable energy systems, urban transit, conservation and building retrofits, and other emissions reduction projects. Each $1 million U.S. in green capital spending supports 10 to 21 job-years of new employment – considerably more than conventional carbon-intensive projects and energy systems. The faster the commitment to renewable energy investments, the larger are the job benefits: in an accelerated green investment scenario (which would speed up capital spending by 2 years), some 80 million net new jobs are created in the 96 cities in the same time frame. As a case study, the C40 work also featured a focused analysis of investment and employment opportunities arising from the energy transition in Canada (Berensson et al., 2021). Their analysis forecast up to 1.8 million new person-years of employment in Canada arising between 2020 and 2030 from a major emissions-reduction investment scheme in 12 large cities, including construction, manufacturing, and operating and maintenance roles. Building construction and retrofits accounted for over half of that total.
A group of researchers (Batinit et al., 2022) conducted simulations of the impacts of investments in a variety of carbon-neutral or carbon-sink projects – ranging from non-emitting power generation to environmental reclamation. Including indirect effects through supply chains, and induced impacts on downstream consumer spending, these projects generated strong multiplier effects, ranging from 1.1 to 1.7. Multiplier effects consistently larger than one indicate that each dollar invested in one of these projects, generates a final magnified impact on total economic output (and hence on employment), larger than the size of the initial investment. In contrast, fossil fuel investment projects have total multiplier effects less than one: ranging from 0.4 to 0.7. Climate-friendly investments thus generate more than twice as much final economic output as fossil fuel projects, per dollar invested.
Very similar results were generated by another macroeconomic study (Shah and Wu, 2025) comparing investments in both renewable energy and energy efficiency measures, with traditional non-eco-friendly investment projects. In this study, as well, renewable energy and energy efficiency projects generate multiplier effects consistently greater than one in the medium-term, indicating that the final impact on GDP is larger than the amount initially invested. The multiplier impacts were somewhat stronger for energy conservation initiatives (such as building retrofits), ranging up to 1.3, than for renewable energy projects (1.0-1.1). Investments in fossil fuel projects and other non-eco-friendly investments were much lower than one (in the rang of 0.3 in the medium-term), reflecting their low labour intensity.

References

Batini, Nicoletta, Mario Di Serio, Matteo Fragetta, Giovanni Melina, and Anthony Waldron (2022). “Building back better: How big are green spending multipliers?,” Ecological Economics 193, March.

Berensson, Markus, et al. (2021). Canada: The Case for an Urban Green and Just Recovery, Technical Report(London: C40 Cities), https://www.greenpolicyplatform.org/sites/default/files/C40%20Cities%20(2021)%20Canada%20-%20The%20case%20for%20an%20urban%20green%20and%20just%20recovery%20(Technical%20report).pdf.

Bridge, Tyee, and Jim Stanford (2025). Jobs for Today: Canada’s Building Trades and the Net-Zero Transition, Centre for Civic Governance, https://ccg.eco/wp-content/uploads/2025/09/Jobs_for_Today_Report.pdf.

C40 Cities Climate Leadership Group (2021), The Case for a Green and Just Recovery (London: C40 Cities), https://c40.my.salesforce.com/sfc/p/#36000001Enhz/a/1Q000000gRCH/24OgSbRwj1hZ305yJbyPMZJQKhXXWNYE8k8sr2ADsi8

Clean Energy Canada (2019). Missing the Bigger Picture (Vancouver: Clean Energy Canada), https://cleanenergycanada.org/wp-content/uploads/2019/05/Report_TER2019_CleanJobs_20190516_v3_ForWeb_FINAL.pdf.

Clean Energy Canada (2021). The New Reality (Vancouver: Clean Energy Canada), https://cleanenergycanada.org/wp-content/uploads/2021/06/Report_CEC_CleanJobs2021.pdf.

Dunsky Energy Consulting (2018). The Economic Impact of Improved Energy Efficiency in Canada: Employment and Other Economic Outcomes from the Pan-Canadian Framework’s Energy Efficiency Measures (Montreal: Dunsky Energy Consulting), https://cleanenergycanada.org/wp-content/uploads/2018/04/TechnicalReport_EnergyEfficiency_20180403_FINAL.pdf.

Ecology Action Centre (2019). Nova Scotia Environmental Goals and Sustainable Prosperity Act: Economic Costs and Benefits for Proposed Goals (Halifax: Ecology Action Centre), https://ecologyaction.ca/sites/default/files/2022-06/EAC_GP_Climate%20Jobs%20Report_Sept2019_0.pdf

Guldimann, Colin, and Naomi Powell (2022). Green Collar Jobs: The skills revolution Canada needs to reach Net Zero (Toronto: RBC Canada), https://thoughtleadership.rbc.com/green-collar-jobs-the-skills-revolution-canada-needs-to-reach-net-zero/.

International Energy Agency (2021). Net Zero by 2050 (Paris: International Energy Agency), https://iea.blob.core.windows.net/assets/deebef5d-0c34-4539-9d0c-10b13d840027/NetZeroby2050-ARoadmapfortheGlobalEnergySector_CORR.pdf.

International Renewable Energy Agency (2023). Renewable Energy and Jobs Annual Review 2023 (Abu Dhabi: IRENA), https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2023/Sep/IRENA_Renewable_energy_and_jobs_2023.pdf.

Jacobson, Mark Z., et al. (2017). “100% Clean and Renewable Wind, Water, and Sunlight All-Sector Energy Roadmaps for 139 Countries of the World,” Joule 1(1), pp. 108-121, Supplementary Tables Available at https://ars.els-cdn.com/content/image/1-s2.0-S2542435117300120-mmc1.pdf.

Kaddoura, Saeed, et al. (2020). Alberta’s Emerging Economy: A Blueprint for Job Creation through 2030(Calgary: Pembina Institute), https://www.pembina.org/reports/albertas-emerging-economy.pdf.

Lee, Marc, and Seth Klein (2020). Winding Down BC’s Fossil Fuel Industries: Planning for Climate Justice in a Zero-Carbon Economy (Vancovuer: Canadian Centre for Policy Alternatives), https://www.policyalternatives.ca/sites/default/files/uploads/publications/BC%20Office/2020/03/ccpa-bc_Winding-Down-BCs-Fossil-Fuel-Industries.pdf.

Lee, Marc, Caroline Brouillette, and Hadrian Mertins-Kirkwood (2023). Spending What it Takes: Transformational Climate Investments for Long-Term Prosperity in Canada (Ottawa: Canadian Centre for Policy Alternatives), https://policyalternatives.ca/publications/reports/spending-what-it-takes.

Navius Research (2019). Quantifying Canada’s Clean Energy Economy: An Assessment of Clean Energy Investment, Value-Added and Jobs (Vancouver, Navius Research), https://cleanenergycanada.org/wp-content/uploads/2019/05/2019-03-13-Clean-Energy-Economy-FINAL-REPORT.pdf.

Shah, Syed Sadaqat Ali, and Kai Wu (2025). “How effective are green spending multipliers? Eco-friendly vs non-eco-friendly spending in OECD economies,” Energy Policy 204, September.

Stanford, Jim (2021). Employment Transitions and the Phase-Out of Fossil Fuels, (Vancouver: Centre for Future Work), 113 pp., https://centreforfuturework.ca/wp-content/uploads/2021/01/Employment-Transitions-Report-Final.pdf.

Thomas, Stephen, and Tom Green (2022). Shifting Power: Zero-Emissions Electricity Across Canada by 2035(Vancouver: David Suzuki Foundation), https://davidsuzuki.org/wp-content/uploads/2022/05/Shifting-Power-Zero-Emissions-Across-Canada-By-2035-Report.pdf.

United Nations International Development Organization and the Global Green Growth Initiative (2015). Global Green Growth: Clean Energy Industry Investments and Expanding Job Opportunities (Vienna: UNIDO), https://gggi.org/wp-content/uploads/2017/11/2015-06-Global-Green-Growth-Clean-Energy-Industrial-Investments-and-Expanding-Job-Opportunities-Overall-findings.pdf.

Xuereb, Slias, and Inez Hillel (2023). Job Creation Through Transformational Climate Investments: Assessing the Impact of Proposed Climate Investments in Canada (Ottawa: Vivic Research), https://vivicresearch.ca/work/employment-impacts-of-spending-what-it-takes

The post Annotated Bibliography on the Net Employment Benefits of the Energy Transition appeared first on Centre for Future Work.

Webinar on Employment Transitions for Fossil Fuel Workers

Jim Stanford — Wed, 17 Dec 2025 03:19:04 +0000

The Centre for Future Work recently released a major report, as part of its PowerShare research project, on the role of collective voice and representation in facilitating more effective and fair employment transitions as most production and use of fossil fuels is phased out in line with reaching net-zero emissions by 2050. The full report is available here.

In a one-hour webinar, the report’s authors (Jim Stanford and Kathy Bennett) discussed the methodology, key findings, and policy implications of the research. The webinar was hosted by John Woodside, Ottawa Bureau Chief for Canada’s National Observer.

The webinar also featured comments from Jessica McCormick, President of the Newfoundland and Labrador Federation of Labour, and Megan Gordon, Manager of Equitable Transition for the Pembina Institute.

The webinar is available on YouTube.

The post Webinar on Employment Transitions for Fossil Fuel Workers appeared first on Centre for Future Work.

Transition Away from Fossil Fuel Jobs is Already Occurring: Here’s How to Manage it Better

Jim Stanford — Mon, 08 Dec 2025 06:25:57 +0000

A report from the Centre for Future Work presents new research on the ongoing decline of fossil fuel employment in Canada, and strategies for managing that decline more effectively and fairly. The report, Worker Voice and Effective Transitions for Fossil Fuel Workers in Canada (by Jim Stanford and Kathy Bennett), also asks fossil fuel workers what sorts of supports they want as this decline continues, and lays out best practices to avoid unemployment during the transition.

Key findings of the report include:

- There were 177,000 jobs in direct fossil fuel work in Canada in 2024 (including oil and gas, coal, petroleum refining, pipelines, natural gas distribution, and the share of electricity generation tied to fossil fuel combustion). That is just under 1% of total payroll employment.
- Fossil fuel employment declined by 38,000 jobs over the previous ten years (mostly in upstream oil and gas) – despite a 35% increase in Canadian oil production, and a 24% increase in natural gas production.
- This long-term decline is set to continue for many reasons, not solely or mostly climate policy. New technologies, economic forces, resource depletion, and corporate outsourcing strategies are all eliminating fossil fuel jobs.
- Fossil fuel workers are older than average; most will reach normal retirement age before 2050 (when Canada has committed to achieving a net-zero economy).
- Most fossil fuel workers surveyed in the report acknowledge that employment in their industry will decline in coming decades. However, they are reasonably optimistic that pro-active planning and supports can manage that decline without mass displacement.
- The strongest findings from surveys and interviews with fossil fuel workers include: very strong interest in early retirement programs as the most appealing transition program; and greater confidence in trade unions (rather than companies or governments) to negotiate and enforce binding commitments around employment transitions.

The paper concludes with 8 recommendations for strengthening employment transition programs in the future, tied to long-run emissions reduction policies, resource depletion, and technological change.

In short, an employment transition away from fossil fuel jobs is occurring, and occurring quickly. Regardless of the twists and turns of climate policy debates, that decline will continue, driven by deeper economic and technological factors. The choice for Canadians is not whether a shift away from fossil fuel work will occur, but how we will manage it.

The new report comes as Canadian politicians start another major debate over new oil and gas pipelines. Even building a new pipeline won’t reverse the long-run decline in fossil fuel jobs. To be sure, building a pipeline creates medium-term construction work – but no more than equivalent amounts spent on other energy investments (like wind and solar energy, transmission lines, energy retrofits of buildings, or public transit). And the historic decline in direct fossil fuel employment will continue anyway.

Please see the full report here: https://centreforfuturework.ca/wp-content/uploads/2026/01/Transitions-for-Fossil-Fuel-Workers.pdf

The report’s findings and implications will be discussed further in a one-hour webinar, on Wednesday December 10 at 1:00 pm Eastern (10:00 am Pacific). In addition to the report co-authors, speakers at the webinar will include:

- John Woodside, Ottawa Bureau Chief for Canada’s National Observer (moderator).
- Jessica McCormick, President of the Newfoundland & Labrador Federation of Labour.
- Megan Gordon, Manager of Equitable Transition for the Pembina Institute.

Registration for the webinar is free but essential, here.

The post Transition Away from Fossil Fuel Jobs is Already Occurring: Here’s How to Manage it Better appeared first on Centre for Future Work.

Enormous Jobs Potential from Energy Transition Investments

Jim Stanford — Sat, 27 Sep 2025 20:22:51 +0000

Centre for Future Work Director Jim Stanford recently collaborated with the Centre for Civic Governance and the Canadian Building Trades Unions (CBTU) on a new report cataloguing the future job-creation for building trades workers that will result from upcoming investments in renewable energy and energy efficiency measures, in order to meet Canada’s commitment to achieve a net-zero economy by 2050.

The numbers are huge: the report estimates that 6.3 to 9.5 million job years of new construction work will be from now to 2050. This is equivalent to an average of 235,000 to 350,000 ongoing new construction jobs over then next quarter-century – a 20-30% step increase in overall construction employment in Canada.

The report estimated the construction job-creation spurred by three big categories of investment:

- Non-emitting energy production and transmission (including hydro, wind, solar, nuclear, and geothermal).
- Energy-efficient industrial and commercial building construction and retrofits, and construction of district energy systems.
- Sustainable transportation infrastructure (including urban transit, inter-urban high=speed rail, and electric vehicle charging infrastructure).

About half of the new jobs would arise in commercial and industrial building activity, including new construction, deep-energy-saving retrofits, and construction of high-tech district energy systems (which integrate heating and cooling systems with new geothermal, battery, and other technologies to achieve huge gains in energy efficiency).

The job-creation estimates do not include indirect jobs created in the supply chains that feed these investment projects, nor the downstream or induced jobs that would result from additional employment and consumer spending by hundreds of thousands of construction workers. In short, these huge investments will stimulate an unprecedented boom in demand for construction labour.

Sean Strickland, President of the CBTU, concluded these investments are an enormous opportunity for building trades workers:

“This report makes it clear: Canada’s transition to a cleaner economy represents one of the most significant job creation opportunities in our country’s history. Skilled trades workers will be indispensable to delivering the energy infrastructure, retrofits, and clean technology projects that this transition demands. Our members are ready to lead the way by building a more sustainable, resilient, and prosperous Canada for generations to come.”

Please see the full report, Jobs for Today: Canada’s Building Trades and the Net-Zero Transition, by Tyee Bridge and Jim Stanford.

The post Enormous Jobs Potential from Energy Transition Investments appeared first on Centre for Future Work.

Financial Disclosure not Enough to Steer Investment in the Energy Transition

Jim Stanford — Sat, 27 Sep 2025 20:13:42 +0000

In the following commentary, Centre for Future Work Director Jim Stanford looks back at a landmark speech given in 2015 by Mark Carney – at the time the Governor of the Bank of England, now Prime Minister of Canada. The speech was a powerful expose of how private financial investors tend to have too short of a time-frame (seeking to maximize immediate stock market returns or quarterly profits) to properly account for the long-run consequences of certain investments (such as investments in fossil fuel production). Carney termed this financial myopia the ‘tragedy of the horizon’, and advocated for more explicit voluntary financial disclosure by financial institutions and corporations in the real economy, to alert investors to the economic (as well as environmental) risks of continuing fossil fuel production and combustion.

In his commentary (originally published on LinkedIn), Stanford shows that voluntary disclosure rules have had little impact (and are now being wound back in the face of intimidation from Donald Trump). He argues more direct regulations to limit fossil fuel use and pollution will be required to push the financial and business sectors into more responsible behaviour.

The Political Horizon, not the Financial Horizon, is Undermining Climate Financial Disclosure

by Jim Stanford

Ten years ago this month, a certain Governor of the Bank of England gave a landmark speech that had a major impact on how financial institutions understand, and respond to, climate change.

Titled “Breaking the Tragedy of the Horizon,” the speech was delivered at the global headquarters of Lloyd’s of London, the world’s most influential insurance company.

The orator, who was moonlighting at the time as Chairman of the Financial Stability Board (a global network of top financial regulators under the G20) powerfully spelled out the economic and financial risks of climate change.

Those risks are faced directly by the insurance industry, which confronts a growing toll of climate-related disaster costs every year. But climate change also poses many other risks throughout the financial system: to banks, to individual investors, and to the companies which steward capital embodied in their real investments.

The tumultuous consequences of climate change will spark unprecedented instability in capital markets, the speech warned, unless market participants get better at anticipating those risks, disclosing them to investors, and preparing for them.

Left to their own devices, financial markets are notoriously bad at seeing further into the future than the next quarterly earnings report. Competitive pressures to ‘beat the market’ force lenders, borrowers, investors, and analysts alike to focus on the myopic twists and turns of asset prices. Hence the speaker’s ‘tragedy of the horizon’: a fitting analogy to the better-known ‘tragedy of the commons,’ that describes the challenges of collective action around problems like resource conservation.

To prepare for climate change, and make the very long-term investments necessary to both limit its extent and enhance our resilience to it, we need to look beyond a much further horizon. The speaker put great hope in the effectiveness of financial transparency as a way to bring those long-run concerns forward into current financial decision-making.

He proposed a framework in which firms would be required to publish information about their greenhouse gas footprints, and how they plan to manage risks to their businesses from climate change. He proposed a Climate Disclosure Task Force to develop voluntary disclosure standards. He marshalled conventional financial principles about transparency, liquidity, and efficient markets in urging the financial system to better value the costs and risks of climate change, and adjust investment decisions accordingly.

The speech’s conclusion was stirring and hopeful: “Capital should be allocated to reflect fundamentals, including externalities. An abrupt resolution of the tragedy of horizons is in itself a financial stability risk. The more we invest with foresight; the less we will regret with hindsight.”

This speech still makes for compelling reading. The speaker, of course, was Mark Carney. This speech, and Mr. Carney’s other efforts (including after he left the Bank of England in 2020) to integrate climate concerns into financial markets, were influential.

Indeed, Carney played a central role in establishing the Net-Zero Banking Alliance (NZBA) in 2021, which at peak enlisted over 140 global banks in developing and implementing voluntary climate disclosure, and taking other measures to facilitate private investment in decarbonization and climate adaptation. And while the NZBA did not advocate divestment from fossil fuel industries, it urged financiers to properly acknowledge the costs and risks of those investments – and this, theoretically, would guide investors to making more sustainable decisions.

Unfortunately, these calls for voluntary disclosure of climate risks did not lead to enough meaningful action. Banks and other financial institutions continued to raise trillions of dollars for fossil fuel projects. And in many countries (including Canada), attempts to implement more direct and robust limits on greenhouse gas pollution have been resisted fiercely by those who profit from fossil fuel production and use – including an unholy alliance of oil companies, and their financial partners.

Fast forward a decade, and Mr. Carney is now Canada’s Prime Minister. Donald Trump has become President of the United States, and is quickly dismantling previous government policies to promote decarbonization. His slogan is “drill, baby drill.” And Trump is not only removing the regulatory impetus for business to reduce greenhouse gas pollution; he threatens retribution against companies (including banks) that continue to adhere to ‘woke’ values like sustainability.

In the face of these rather immediate political risks, banks of all nationalities are throwing overboard their previous soft commitments to climate-aware financial practices. Many big U.S., Canadian, and European banks have quit the NZBA since Trump’s election, and the organization has paused its activities while it considers a new, less ambitious mandate.

Meanwhile, fossil fuel production is as profitable as ever – with global oil companies setting new all-time records for profits after the 2022 oil price spike. Oil giants which once paid lip service to investing in long-run sustainable energy opportunities, have abandoned the pretense and doubled down on highly profitable petroleum investments.

For both banks and oil companies, therefore, the hopes of the ‘ethical investment’ community that stronger voluntary transparency and investor education would push companies toward more environmentally responsible behaviour, have proven devastatingly naïve. Companies once went along with voluntary measures, at a time when they feared the threat of more binding (and profit-impinging) pollution regulations. But as prospects of compulsory measures receded (in the face of right-wing populism), companies dropped the mask, and recommitted to doing what’s profitable now – rather than what’s prudent, ethical, or responsible in the long term.

Nowhere is the contrast between the high hopes of voluntary disclosure advocates, and the frightening petro-dominance over current politics, clearer than in Canada. Mr. Carney’s first act as Prime Minister was to cancel the consumer-facing carbon price – which had become politically toxic after years of right-wing disinformation and corporate denunciation. Other environmental measures (such as an emissions cap on further petroleum expansion, or mandates for electric vehicle use) are in jeopardy. Carney’s cabinet is suddenly noncommittal about meeting Canada’s international climate commitments.

And in the context of extreme economic uncertainty caused by Donald Trump’s trade war, petroleum advocates are lobbying hard to remove any remaining barriers to further expansion of Canadian petroleum output (which rose 35% over the last decade, never mind the previous federal government’s climate policies).

The currently grim outlook for climate policy in Canada highlights an important lesson of this ten-year experiment with voluntary disclosure and ‘responsible’ finance. Trying to correct the short-sightedness of financial markets through small tweaks to the fiduciary responsibility regime were always far-fetched. Now they seem tragically naïve.

If polluting the planet and fueling climate change is profitable (as it certainly has been), then financiers and industrialists will race to do it. History has shown we shouldn’t bet on either oil companies or the banks that finance them to do the right thing for the planet.

So long as fossil fuel production and pollution remain legal and profitable, the financial system will undoubtedly generate the resources needed to grease those polluting wheels (including through private equity and other channels unconstrained by ‘environmental responsibility’). The best way to stop polluting activities, and the investments which finance them, is to make those activities illegal and/or unprofitable. That means strong, compulsory regulations to limit or tax pollution, including a binding Paris-aligned plan to phase out most production and use of fossil fuels.

As climate change brings more extreme floods, wildfires, heatwaves, hurricanes and droughts, it’s clear that mandatory regulations are needed to meet Paris commitments. That means governments must resist petroleum industry pressure tactics, and pass the binding regulations (including mandatory climate disclosure for financial institutions) that are long overdue. And Canadians have to push governments harder to do the right thing.

In this regard, the ten years since Mr. Carney’s speech have proven that it is a myopic political horizon, not the financial horizon, most inhibiting the implementation of binding rules to limit greenhouse gas pollution. Petroleum companies, financial investors, and opportunistic politicians are blocking progress toward genuine greenhouse gas reduction. To overcome this, those committed to a habitable world must exert stronger political force on government.

In other words, it is not the hoped-for horizons of prudent financiers, but the human foresight of parents and grandparents who care about the world their children and grandchildren will inhabit, that will save this planet.

The post Financial Disclosure not Enough to Steer Investment in the Energy Transition appeared first on Centre for Future Work.

New Report Shows Speculative Oil Markets Drove Inflation Crisis — And It’s Poised to Happen Again

Jim Stanford — Wed, 19 Mar 2025 23:21:41 +0000

A new report from the Centre for Future Work reveals that financial speculation in global oil markets — not supply shortages or carbon pricing — was the primary driver of Canada’s inflation surge in 2022. The report, Counting the Costs, finds that inflated oil and gas prices, passed directly and indirectly to Canadian consumers and businesses, cost each household an average of $12,000 over three years.

Furthermore, the report warns that without urgent action, this will happen again, especially as geopolitical instability — like Donald Trump’s erratic threats of tariffs — creates the conditions for another speculative oil price surge.

The report proposes three policy recommendations to prevent a similar macroeconomic shock in the future from volatile futures markets:

Insulate Canadian fossil fuel prices from the gyrations of financialized futures markets.
Strengthen royalty regimes and collect excess profits taxes when oil and gas companies profit from future price spikes, redistributed to compensate consumers for extra costs.
Accelerate energy conservation and the transition to renewable energy systems (which are not in the thrall of futures market speculation).

This report is the first publication from a new project, False Profits, hosted at the Centre for Future Work. The project will investigate how fossil fuel prices and profits have contributed to affordability challenges and economic insecurity for Canadians.

Please see the full report, Counting the Costs—Impacts of the 2022 Oil Price Shock for Canadian Consumers and Workers, by Jim Stanford and Erin Weir.

The post New Report Shows Speculative Oil Markets Drove Inflation Crisis — And It’s Poised to Happen Again appeared first on Centre for Future Work.

Building a Sustainable, High-Value-Added Forestry Sector in B.C.

Jim Stanford — Thu, 04 Apr 2024 17:34:12 +0000

B.C.’s economy has always depended on its rich forests—from First Nations communities, through the early settler economy, to modern forestry practices and technologies.

But in recent years the industry has been buffeted by a perfect storm of environmental, economic, and geopolitical challenges. Total production has declined by up to half in recent years, with devastating effects on employment, output, exports, and taxes. Dozens of remote and regional forest communities are unsure of their future, unless a viable and sustainable future for forestry can be achieved.

The three major unions representing forestry workers in B.C. (including Unifor, the United Steelworkers, and the PPWC) recently came together to host a special Forestry Summit. The Summit aimed to bring attention to the challenges facing the industry, and demand a concerted strategy by government and all industry stakeholders to stabilize and sustain the industry on a sustainable, high-tech foundation. The Summit featured a major report, co-authored by Jim Stanford (Director of the Centre for Future Work) and Ken Delaney (from the Canadian Skills Training and Employment Coalition). The report describes the forestry crisis, and maps out the major elements of a sector strategy to preserve jobs and workplaces – consistent with both conservation objectives and First Nations stewardship of treaty and traditional lands.

The report proposes a series of key reforms to develop and implement a strong sector strategy for a modern, value-added, sustainable provincial forest industry. The strategy consists of four major elements:

Creation of a Permanent Province-Wide Forestry Sector Council
Development of a Province-Wide Plan for Stable, Sustainable, Economic Fibre Supply
Forest Adjustment Bureau to Redesign and Integrate Worker and Community Adjustment Supports
Eight-Point Strategy to Maximize Value-Added from Stable Fibre Harvesting

Please see the full 54-page report, A Better Future for B.C. Forestry: A Sector Strategy for Sustainable, Value-Added Forest Industries.

Summary slides highlighting the major findings of the report can be downloaded here. They are also available in French.

For more information on the Fighting for our Future campaign launched by the three unions, please visit https://bcforestryworkers.ca/.

The post Building a Sustainable, High-Value-Added Forestry Sector in B.C. appeared first on Centre for Future Work.

Review of Gas Price Roller-Coaster in 2023 Revealed Important Lessons

Jim Stanford — Wed, 03 Jan 2024 18:11:57 +0000

This commentary was originally published at rabble.ca.

As 2023 drew to a close, it wa3s instructive to review the path of gasoline prices (which are the most volatile major component in Canada’s consumer price index) over the year. According to the GasBuddy website, the average price on December 31 was $1.39/litre. That was 5₵ cheaper than at the beginning of 2023. But gas prices followed a long, winding road to get there.

Of course, the ups and downs of world oil futures markets are the major reason for this roller-coaster (even for gasoline extracted, refined & consumed here in Canada). What is striking is the irrelevance of Canadian fiscal and climate policies to the path of gas prices over the year.

The backstop federal carbon price (which applies in provinces not participating with their own carbon rice) rose $15/tonne on April 1. The new federal Clean Fuel Regulation came into effect July 1. Conservatives claimed both would send gasoline costs soaring. But their impact (small for the carbon price, non-existent for the fuel regulation) was swamped by global price turmoil.

Conservative leader Pierre Poilievre and his team tried to exploit both policy moments to farm more rage against virtually anything to do with the federal government. On April 1, he warned about a wave of robberies at gas stations across the country, with the culprit stealing 14₵/litre from every customer.

Likening a policy measure adopted by an elected government and implemented in accordance with the rule of law, to the actions of a gas station stick-up bandit, seems irresponsible… but sadly it is par for the course these days for Canadian populism.

Then, on June 30, Mr. Poilievre urged Canadians to fill their tanks before the next “tax hike on gas” kicked in. (In reality, the Clean Fuel Regulation is not a tax, and no serious analyst expected it to have an impact on current gas prices.)

Ironically, gas prices in most parts of Canada fell slightly over the subsequent week. Anyone who took Mr. Poilievre’s financial advice literally, and actually believed they would save money by filling up on June 30, ended up losing a dollar or two. That’s not as much as the losses incurred by those who followed his previous advice to buy cryptocurrency. But it’s a reminder that politicians who muddle personal financial advice with ideological hot takes, are playing with fire.

Gas prices then fell through the autumn, thanks to lower world oil prices (OPEC+ efforts to cut supply didn’t succeed), seasonal factors, and gasoline supply trends. That’s been key to slowing inflation down to 3.1% by November – just as sky-high gas prices in summer 2022 were key to the 8% inflation experienced then.

Ironically, gas prices are now about 14₵/litre lower than on April 1. Will Mr. Poilievre now tweet his thanks to Mr. Trudeau for reimbursing 14₵/litre to all Canadians gassing up on the New Year’s holiday? That would be no more ridiculous than his claim Trudeau robbed them all on April 1.

More irony: even though gas prices are lower than a year ago (despite the higher carbon price), federal Climate Action Incentive Payment (CAIP) rebates (paid in 7 provinces without equivalent carbon prices) will grow in 2024, as the federal government reimburses higher proceeds from the carbon price. Details will be announced by the Finance Minister in the spring.

Provinces with their own carbon pricing systems will largely follow suit. Lower prices and higher rebates sounds like a win-win. Of course, when Mr. Poilievre promises to “axe the tax”, he is silent on what that means for CAIP rebates (currently worth up to $1544 for a family of 4).

Several lessons arise from this review of the gas price roller-coaster during 2023.

Lesson 1: People tend to blame politicians for hardship caused by private markets and businesses. (I’ve seen left-wing politicians do it, too, not just Conservatives.) It is convenient to use any problem as a point of attack in political debate. But we should be honest about what’s causing the hardship.

High gasoline prices in 2022 mostly resulted from the gyrations of speculative, financialized oil futures markets which overreact to any shocks. Canadian energy policy transmits that turmoil directly to consumers, amplified by unprecedented profit-taking by petroleum corporations (who have booked over $120 billion in net income since the start of 2022 and the Russian invasion of Ukraine).

This way of managing energy markets is not natural or inevitable, nor does it reflect ‘real’ economic forces like production costs, supply and demand, etc. To see how it could be done differently, compare gyrating gas prices to electricity costs in Quebec, Manitoba, & B.C., where a combination of public ownership and strict price regulation has kept electricity prices low – and boringly steady.

Lesson 2: Conservatives have focused on carbon pricing as their key hot button to exploit in preparing for the next election. But carbon pricing is virtually irrelevant to the genuine cost-of-living challenges facing Canadians. Our review of gas prices in 2023 is just one more piece of evidence supporting this assertion, but there is abundant evidence from many other sources.

However, that reality won’t stop populist Conservatives from blaming carbon pricing for any economic or social ailment. Unfortunately, Canadians need to prepare for a New Year filled with unprecedented misinformation. The need for evidence-based research, policy dialogue, and journalism has never been more urgent.

The post Review of Gas Price Roller-Coaster in 2023 Revealed Important Lessons appeared first on Centre for Future Work.

No Correlation Between Inflation and Carbon Pricing

Jim Stanford — Mon, 08 May 2023 13:58:00 +0000

Canadian conservatives have repeatedly tried to pin the blame for post-pandemic inflation on the present federal government, and even personally on Prime Minister Justin Trudeau (with their ‘JustInflation’ label). The latest incarnation of that strategy claims the surge in inflation over the last two years is due to the federal carbon tax – which applies in those provinces (such as Ontario and Alberta) which have refused to participate directly in the Canada-wide carbon pricing system. In this report, originally published in Canadian Dimension magazine, Centre for Future Work Director Jim Stanford shows there is no empirical correlation or theoretical link between carbon taxes and economy-wide inflation.

Top Ten Reasons We Can’t Blame the Carbon Tax for Inflation

by Jim Stanford

From the onset of the post-COVID surge in inflation, Canada’s new breed of right-wing populists has worked hard to pin the blame for higher prices on the federal government. They rightly sense anger among Canadians about the impact of inflation on their real living standards. But they hope to divert that anger into further outrage at Justin Trudeau personally, and his government more generally – building on the virulent anti-Ottawa ideology fostered by the anti-vax movement, the so-called ‘truckers’ convoy’, and other far-right outbursts.

They face an uphill slog in their effort to scapegoat Canada’s federal government for inflation. After all, higher inflation has been almost universal across industrial countries since post-lockdown re-opening. Indeed, Canada’s inflation peaked sooner, at a lower rate, and has come down faster, than most other OECD countries. As of April Canada had the second lowest inflation in the G7, and the 6^th lowest among the 37 countries of the OECD. If it’s all Justin Trudeau’s fault, he seems to have been more successful stoking inflation in all those other countries, than in Canada.

Other tropes in the right-wing narrative about inflation include resuscitating old-fashioned ideas that inflation results from government deficits and excessive money supply. Pierre Poilievre attacked the Bank of Canada for acting as Trudeau’s personal ATM, with its quantitative easing measures earlier in the pandemic. Never mind that most other central banks did the same, and more aggressively. Never mind that the Bank of Canada has since been engaged in quantitative tightening for a full year. Never mind that the money supply in Canada is now shrinking rapidly – mostly because of the slowdown in private credit creation caused by the Bank’s interest rate policies. (Poilievre & Co. never fret about the power of private banks to create money out of thin air, as they do in tens of billions every week, because that doesn’t fit with their anti-government hymn book.) And never mind that Ottawa’s pandemic deficits have quickly disappeared as the economy re-opened: in fact, the federal government ran a $3.1 billion surplus in the first 11 months of the 2022-23 fiscal year (final year-end numbers won’t be known for a few months).

As the credibility of Poilievre’s “Justinflation” narrative comes apart at the seams, the right has now seized another trope on which to hang their anti-government hyperbole: the carbon tax. On April 1 the federal carbon tax rose by $15 per tonne, to $65: the most recent in a 12-year timetable that will lift the tax to $170 by 2030. The tax applies directly in those provinces which are boycotting the federal carbon pricing program (like Ontario and Alberta); it indirectly underpins provincial carbon pricing systems in B.C., Quebec, and other participating provinces. Conservatives and their allies seized on the carbon tax hike as another opportunity to both attach the whole idea of carbon pricing, and also scapegoat Ottawa for all inflation (which, ironically, is decelerating faster than the populists can update their talking points).

There is no serious evidence the carbon tax has anything to do with the surge in inflation since the pandemic. Here are ten key reasons why this latest Conservative attack has no credibility:

The surge in inflation since the pandemic has been experienced across almost all industrial countries, whether they have carbon pricing or not. The U.S., for example, has no carbon tax, yet experienced higher inflation than Canada. The same is true in Australia, Turkey, and other OECD countries without carbon pricing regimes. Japan and Korea both have carbon taxes, and their inflation has been even lower than Canada’s.
Increases in the carbon tax have been gradual, and started long before recent inflation. The federal carbon tax first came into effect (at $20 per tonne) in 2019. It increased by $10 per year to 2022, and is now increasing at $15 per year until 2030. Inflation has swung wildly during this time. CPI inflation decelerated in 2019, after the biggest single increase in the carbon tax. It fell below zero for a while in 2020 (during the worst of the pandemic), and then surged to 8% by June 2022. Now inflation is decelerating rapidly – even as a larger ($15) carbon tax increase is absorbed. The Bank of Canada expects inflation over the coming 12 months to fall back within its target range (to around 2.5% year-over-year by spring 2024). In short, there is no visible correlation at all between carbon tax increases and the rate of inflation.

The impact of the carbon tax on final prices is small, even on fossil fuel products. For example, the latest annual $15 increase in the tax is equivalent to an increase of about 3 cents per litre in gasoline prices. At current average gasoline prices ($1.50 per litre), that’s a 2% increase. Gasoline has a 4% weighting in Statistics Canada’s overall CPI. So for gasoline (the biggest single direct fossil fuel component in the CPI bundle), a $15 carbon tax increase translates into a direct 0.08% increase in overall consumer prices (that is, less than one-tenth of one percent).
In the year ending in June 2022 (when inflation peaked in Canada), the price of gasoline increased by 75 cents per litre. So that increase was almost 40 times larger than can be explained by the change in the carbon tax in that time (which was raised $10 per tonne, or about 2 cents per litre of gasoline, on April 1 2022). Now, of course, gasoline prices have come back down – even as the carbon tax increased again.
Clearly, it is other fluctuations in energy markets (not the carbon tax) that have dominated energy price changes, and the overall inflation rate. The world price of oil tripled between the beginning of 2021 and spring 2022 (from $40 to $120 US per barrel). That is equivalent to an increase in the carbon tax of around $300(Cdn) per MT. By that measure, the jump in the price of oil (driven by a combination of geopolitics and speculation on world oil futures markets) increased fossil fuel prices by 30 times as much as the $10 carbon price increase in the same period.
In February of this year, Bank of Canada Governor Tiff Macklem reported to the House of Commons Finance Committee that the $15 per tonne annual increases in the carbon tax raise the average economy-wide price level by 0.1 percentage points. That can hardly be measured in Statistics Canada’s CPI calculations, and will clearly be overwhelmed (up or down) by other determinants of inflation.
The whole point of the carbon tax is to stimulate economic adjustments aimed at energy conservation, investments in non-polluting energy systems, and shifts in final consumer demand to less carbon-intensive products. All of these things can lead to reductions in prices for many products. For example, the price of electric vehicles is coming down very rapidly as the technology and scale of that industry rapidly develop. The price of electricity will also come down as renewable sources become more widespread and cost-efficient (especially given huge reductions in battery storage costs). Solar powered electricity is already 28% cheaper than gas-powered in Alberta and Ontario, and that advantage will grow.
Once we consider the direct and indirect impacts on prices, the net effect of the carbon tax on the overall price level could be negative (that is, deflationary). That is the finding of a major international study of the historical impact of carbon taxes on price levels in several EU countries and Canadian provinces. The researchers found no significant impact of carbon taxes on inflation in Europe, and a slight deflationary impact in Canada. They attribute the deflationary impact largely to the stimulus to investment and supply in non-carbon-intensive industries that is being provided by the carbon tax.
Most of the revenue from carbon pricing regimes in various provinces is rebated back to Canadian households, with a net mildly progressive distributional impact (with lower-income households getting more back than they pay in). Even funds that were retained by government would still be spent on public services or other welfare-enhancing activities. While this recycling of carbon tax revenue doesn’t affect the rate of inflation, it does help offset (especially for lower-income Canadians) the impacts of any inflation that is occurring (whatever its causes), and further enhances the net welfare benefits of carbon pricing.
Of course, in any environmental debate, the impact of climate policies must be compared to the costs of inaction. Climate change is already having many negative impacts on the economy, including on inflation. The impact of climate disasters (droughts, floods, and more) on food prices has been widely acknowledged. Contributing to the alleviation of future climate -related costs is another anti-inflationary aspect of climate policy generally, including measures like the carbon tax.

In sum, blaming recent inflation on the carbon tax is just another attempt by right-wing populists to divert the legitimate anger of Canadians into destructive, anti-government channels. The carbon tax has no visible historical relationship to the rate of inflation. The real culprits in the current cost of living crisis, and higher energy costs in particular, are the corporations who have taken advantage of supply constraints, wars, speculative futures markets, and pandemics to increase their own profits. In Canada’s case, the oil and gas sector increased its aggregate profits by over 1000% between 2019 and 2022. Those profits are the direct result of the surge in inflation that damaged Canadians’ real living standards. By trying to blame the carbon tax (and government in general) for inflation, these companies (and the right-wing populists who ultimately endorse the dominance of business in our economy) hope to divert public anger safely away from any sort of anti-corporate perspective.

Of course, progressives have many ideas for improving climate policy in Canada, and the carbon pricing system more specifically. These include a stronger role for direct regulation of emissions (including hard caps on fossil fuel output), more emphasis on direct public investment (not just tax credits or other incentives for private investment), and stronger measures to lift the quality and fairness of jobs in new, sustainable industries.

So there are many criticisms that can be leveled at Canada’s existing carbon tax system. But causing inflation is not one of them.

The post No Correlation Between Inflation and Carbon Pricing appeared first on Centre for Future Work.

Calling Canadian Energy Workers: Take Our Survey on Future Job Transitions

Jim Stanford — Tue, 13 Dec 2022 06:22:45 +0000

As part of our PowerShare research project on planning effective and fair transitions for workers through the coming transformation of energy systems, the Centre for Future Work has designed a survey for people currently working in any fossil fuel industry in Canada: including oil and gas production, oilfield services, coal mining, petrochemicals, natural gas distribution, and related sectors.

The survey takes about 5 minutes, and gathers information on energy workers’ priorities for what types of policies would best support a gradual, supported labour transition – and what stakeholders (governments, fossil fuel companies, unions, or others) are best placed to lead and fund such a transition.

If you work in a fossil fuel-related industry, please take the survey through this link.

And if you know others who work in one of these industries, please forward the link to them! Thank you for your participation, and watch this space for results of our research in mid-2023.

The post Calling Canadian Energy Workers: Take Our Survey on Future Job Transitions appeared first on Centre for Future Work.