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The global energy transition could disrupt 10 per cent of Canadians
But a significant proportion of the town’s workers went through a period of unemployment following a shutdown while the plant retooled in 2022. (File photo by Doug Nealy/Unsplash)
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Canada faces a lot of economic uncertainty: an incoming administration in the U.S. threatening punitive tariffs; the rise of artificial intelligence; and changes to technology and markets that will come with efforts to reduce greenhouse-gas emissions. All three will require careful thought and preparation on the part of governments.
The global energy transition will be massively disruptive, and major market transformations could come suddenly, particularly for export sectors tied to global markets. For Canada, the challenge is to get the balance right between moving too far ahead and getting left behind.
When disruption does come, it will be felt most by those living in towns and small cities heavily dependent on certain sectors.
Those communities should be prepared.
About 10 per cent of Canadians are likely to need additional attention and support from governments to weather the changes in industries they rely on, according to the findings of The Community Transformations Project, a new multi-year research initiative from the Institute for Research on Public Policy.
A key feature of the project is an interactive map that identifies the most susceptible communities across the country. The map is the work of the IRPP and the Community Data Program. (Key findings will be presented in a webinar on Jan. 21.)
We define susceptibility as the potential for workforce disruption. It could mean job change, reskilling or upskilling, inflows or outflows of workers, worker shortages, adjustments to earnings or unemployment.
The map can help governments better target their policy approaches. It can also help point the way toward a more bottom-up people-centred approach whereby governments support community-led strategies to diversify the economy, train workers, help major employers adapt, and ensure adequate income and social support.
With successful navigation of the transition, disruption could ultimately be a positive force.
Three measures of susceptibility
Most research on worker and community transitions has focused on coal power, oil and gas, or on existing Canadian policies. These approaches are useful but leave out communities reliant on emissions-intensive users of energy such as steel production or the manufacturing of vehicles and airplanes that use fossil fuels.
International organizations have begun to shift from the goal of a “just transition” to “people-centred transitions” that consider jobs and worker protections, social and economic development, and the active involvement of those affected.
In our project, we use three metrics to assess local susceptibility to changes in policy, technology and markets, all of which are likely to unfold over the coming decades as Canada and the world reduce greenhouse-gas emissions.
The metrics are not linked to any particular policy pathway in Canada or assumptions about the timing of global climate action. They focus on key sources of susceptibility to workforce disruption: emissions from facilities and sectors, market trends and scenarios, and employment concentration in susceptible industries.
The three metrics measure:
Facility susceptibility: Emissions from large facilities relative to the size of a community’s labour force.
Intensity susceptibility: The proportion of employment in emissions-intensive sectors.
Market susceptibility: The proportion of employment in export-oriented sectors expected to undergo market transformation.
To determine which communities are most likely to experience some disruption, we used the scores on these metrics to place communities into one of six categories, ranging from not susceptible to most susceptible.
Where are the susceptible communities?
Many susceptible communities have an indirect link to fossil fuels. They can be a town with an emissions-intensive cement plant using fossil fuels or a small city with a high concentration of employment in pork production, where hog digestion releases methane and fossil fuels are used for buildings and transportation. Susceptible communities tend to be more remote or rural.
Of all the provinces, Quebec has the highest number of susceptible communities. However, many of those communities are only moderately susceptible, and they make up a small share of the province’s population.
Alberta, on the other hand, has a higher number of communities that are most susceptible, and a higher share of its population lives in susceptible communities. But communities in virtually all provinces and territories are affected to some degree.
Knowing where these communities are can help governments focus their attention and support.
Some communities need help now. For them, the change is already underway or imminent.
Take, for example, Ingersoll, Ont. Its largest employer, General Motors, recently shifted from assembling traditional passenger SUVs to making electric delivery vans and batteries. In many ways, Ingersoll is a success story.
But a significant proportion of the town’s workers went through a period of unemployment following a shutdown while the plant retooled in 2022. That came on the heels of a strike at the plant in 2019, the COVID-19 pandemic the following year and a global shortage in semiconductors and other parts. The disruptions led to layoffs, and foodbanks had line-ups.
The plant is set to have full-time work again in 2025, but residents worry that the electric-vehicle market is volatile, a fear that has been heightened by the musings of the incoming Trump administration.
Out west, Estevan, Saskatchewan is dealing with significant uncertainty. The community revolves around coal mining, coal-fired power generation, oil and gas, and agriculture. But it is a few years away from a government-mandated phase-out of its coal-fired power plants and closing of its coal mine.
It’s a worrying prospect for a community whose employment and wealth are so tied to fossil-fuel production. Restaurants could struggle. Demand for social services could rise. Home values could fall. The stress of the coming disruption has exacerbated community concerns about mental health and addiction.
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On the horizon, the town has some emerging geothermal and solar-energy projects and the potential for a major investment in a small modular nuclear reactor. But residents are looking for a plan that can provide some long-term certainty.
Other susceptible communities have more time.
Oil and gas production is still in demand and profitable, and the technology to reduce emissions from large ships and airplanes is at an early development stage. But at some point, this is likely to change as the global economy transforms.
Government commitments to climate action ebb and flow globally, but investment in emission-reducing technologies continues to grow and markets are starting to gather momentum.
The value of community-led approaches
No two communities are identical. With the stakes so high, none of them will welcome solutions from government that are top-down and one-size-fits all. Local engagement is needed.
Community-led strategies supported by resources from upper levels of government are more likely to generate sustained engagement.
Communities tend to think about more than just a new factory – they connect the dots to social services that help families through a rough patch and to local training programs that help workers seize new opportunities.
The mechanisms and institutions to support community-led strategies are largely in place. That’s the good news. They just need to be better targeted.
As a starting point, governments could:
- Top up existing tax credits to further incentivize private investment in susceptible communities.
- Consider community susceptibility when evaluating project funding decisions.
- Expand the capacity of locally based Community Futures organizations to enable them to support strategic economic-development planning.
- Provide more accessible and user-friendly community data, as well as market analysis and local case studies, so that communities across the country have the tools they need for strategy development.
Providing better support for communities and their workers is the fair thing to do. It’s also a way to build a broader base of trust that change is manageable. Greater focus at the local level on strategies that work with and for susceptible communities could also provide important lessons for a less confrontational approach to Canadian climate policy.
For further details about The Community Transformations Project, read the methodology report.
This article first appeared on Policy Options and is republished here under a Creative Commons license.
