Federal, provincial governments 'ill-prepared' for transition into clean energy sector: report

As the renewable energy industry expands worldwide, there is also increasing worry about Canadian communities and employees who rely on the oil and gas industry. According to a recent study, the federal and provincial governments might not be adequately prepared for a seamless shift.

The International Institute for Sustainable Development (IISD) shared their discoveries in a recent publication, revealing the worry for various neighborhoods throughout Canada and the numerous employment opportunities that will inevitably face reduced demand as the country transitions towards renewable energy.

"As economies move towards reducing their carbon footprint, the dangers and financial burdens linked to Canada's ongoing dependence on fossil fuels will grow more severe over time. It is imperative to incorporate these risks and expenses into policy-making and business choices, ensuring that investors are well-informed," expressed Nichole Dusyk, a seasoned policy consultant at the IISD, in an official statement.

Failing to take action could have disastrous outcomes for both the employees and the communities that rely on this sector.

Declining Oil Demand, Unsteady Gas Market

Based on the report, there is a projected decrease in the demand for oil by the year 2030, primarily due to the growing popularity of electric items such as electric cars. Although the demand for plastics, which is the second largest consumer of oil, may help sustain the market for a while, the report suggests that it won't be sufficient to reverse the decline beyond the year 2030.

Regarding gas, the report mentions that the natural gas industry has encountered growing instability due to surging gas prices and the shift towards alternative sustainable choices. Given that the United States stands as a major consumer of Canadian oil and gas, the report suggests that the Inflation Reduction Act implemented by the Biden Administration will expedite the adoption of clean energy and have a substantial effect on Canadian producers.

According to researchers, regions such as Alberta, Saskatchewan, and B.C. that heavily rely on fossil fuels will face the highest vulnerability during this transition. In 2016, they had a considerable percentage of their workforce, ranging from 9.3% to over 30%, employed in direct fossil fuel-related jobs. The report highlighted the uncertain nature of these jobs' sustainability, as over 53,000 positions were already eliminated between 2014 and 2019. Remarkably, these job losses occurred despite a surge in oil production during that period. Furthermore, the pandemic dealt another blow, resulting in an additional 17,000 job cuts in early 2021.

Governments Must Embrace Active Roles

According to a study conducted by the national government, Canada's workforce will not suffer significant effects as it shifts towards renewable energy. The comprehensive employment strategy, comprising 32 pages, which was disclosed in February, highlighted that the clean energy industry will probably face a dearth of skilled workers needed to occupy the available positions.

Notwithstanding this, as well as other initiatives by the central government to back the reduction of carbon emissions in the oil and gas sector, the report suggests that both federal and provincial authorities should place their attention on four essential measures in order to smoothly shift the nation towards meeting its net-zero climate objectives.

The International Institute for Sustainable Development (IISD) suggests enhancing climate policies that assist workers in adapting to the net-zero economy by utilizing the Canadian Sustainable Jobs Act. It also recommends backing Indigenous governments' strategies for economic variation, revising fiscal policies to account for the anticipation of a diminishing oil and gas market, and preparing to manage a reduction in production rather than expansion.

In conclusion, the study proposes a collaborative approach between the federal and provincial governments, encompassing the entire federation. This would entail allocating shared responsibilities to adequately address the unique requirements of each region and their respective natural resources.

Information and data sourced from The Canadian Press were utilized in the blog.