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Sean Speer: The ‘just transition’ won’t be just if it guts our middle class

Commentary

Hub readers would be somewhat justified for being confused about the current political maelstrom about the so-called “just transition” of oil and gas workers. The language of “just transition” has up until recently been mostly confined to academics, think tanks, and climate advocacy organizations. It’s now at the centre of a renewed debate about the costs and consequences of the Trudeau government’s climate change agenda, including for particular regions, sectors, and workers. 

The controversy started about two weeks ago with the release of an 81-page federal briefing document for Natural Resources Minister Jonathan Wilkinson on the government’s plan to transition workers in carbon-intensive industries such as oil and gas production into job opportunities in greener parts of the economy.  

It precipitated a swift reaction from federal and provincial politicians, including Alberta Premier Danielle Smith who said the briefing document confirmed her “worst fears” about the Trudeau government’s plans to shift the centre of gravity of Canada’s economy from carbon-intensive to less carbon-intensive sectors. 

The ensuing political tensions are a bit odd. The players seem to be slightly confusing causes and symptoms. Premier Smith’s problem isn’t presumably the federal government’s plan for training and employment subsidies to help transition oil and gas workers into new jobs. It’s Ottawa’s plan to threaten their current jobs in the first place. 

But it nevertheless sets up an intellectual and political battleline between Ottawa and Alberta rooted in competing conceptions of how we ought to think about the pursuit of our collective climate goals: is it about managing the decline of the country’s oil and gas sector, or instead what the Public Policy Forum has come to champion as the “aggressive decarbonization” of energy production, transmission, and usage? How we answer this question in the coming years will have significant economic, political, and social consequences. 

The term “just transition” is widely thought to have been coined by Tony Mazzocchi, a well-known American labour and environmental activist, in the early 1990s. He and his acolytes saw the concept as a means of addressing tensions and creating alliances between the labour and environmental movements. 

The basic idea was to design and implement large-scale public programs—what Mazzocchi famously called a “Superfund for Workers”—that would mitigate the inequitable effects on livelihoods caused by environmentally-motivated transformations in energy systems and resource use. As he wrote at the time: “we need to provide workers with a guarantee that they will not have to pay for clean air and water with their jobs, their living standards or their future.”

The Trudeau government has since adopted this language in the context of its own ambitious emission-reduction targets including the impending adoption of an emissions cap on the oil and gas sector. It’s a basic recognition that such policy actions won’t be costless and their consequences will be concentrated among certain people and places. 

The government’s briefing materials essentially say as much: “The transition to a low-carbon economy will have an uneven impact across sectors, occupations, and regions, and create significant labour market disruptions.” There’s been a lot of attention paid in particular to some numbers in the document including the possible employment threat of “large-scale transformations” for about 13.5 percent of Canadian workers, including more than 200,000 in the energy sector. 

Even if Ottawa’s just transition plan to mitigate the displacement effects for some share of these affected workers is ultimately effective, the consequences could still be significant. Consider, for instance, Alberta’s oil and gas sector employs nearly one in ten workers across the province’s entire economy. 

These figures actually underestimate the energy sector’s role in Canadian political economy over the past two decades. I’ve previously written for The Hub about the phenomenon of “jobs polarization” in the modern economy. The basic idea is that the shift from a goods-producing economy to a service-based economy has contributed to a bifurcation of the labour market with a growing share of jobs concentrated in high- and low-skilled occupations. It’s come to be described as an “hourglass economy.” 

Although Canada isn’t immune to these trends, our labour market structure has remained more egalitarian than most peer jurisdictions. Labour economists David Green and Benjamin Sand attribute it in large part to sustained labour demand in the energy sector over the past twenty years or so. Their analysis finds that during this period of jobs polarization across advanced economies, Canada’s resource-based sectors have acted as an “employment alternative to low-paying services jobs.” 

This conclusion aligns with the work of economist Kevin Milligan who has similarly argued that resource-based jobs have sustained Canada’s middle class in the 2000s. As he has written: “The resource sector has contributed substantially to the good jobs that underpin middle-class resilience.”

Another way to put it is this: during a period of worldwide jobs polarization, Canada’s natural resources sectors in general and its oil and gas sector in particular have counteracted this trend, fortified the country’s middle class, including among those without post-secondary credentials, and in so doing had a powerful anti-inequality effect on Canada’s labour market. 

Throwing these workers into disarray therefore would not merely have economic consequences in the form of job and income losses, but it could have broader political and social implications. Remember the story of the contemporary populism around the Western world is in large part the political expression of those who once aspired to a middle-class life and have instead slid down the skills ladder into lower-paid jobs or unemployment altogether. 

If one thinks about the just transition debate according to this lens, policy-based threats to resource-based jobs could hasten the erosion of middle-class jobs in Canada, produce greater inequality in our society, and ultimately precipitate a rise in political and social instability. 

This of course doesn’t mean that Canadian governments ought to abandon their climate goals. But it is a reminder that they need to be judicious in how they assess the benefits and costs of different policy actions if for no other reason than it will undoubtedly threaten the political durability of their own policies. It’s difficult to envision how a stringent climate policy that resulted in major employment dislocation and a spike in inequality could possibly be sustainable. 

With this in mind, the Trudeau government would be wise to adjust how it thinks and talks about the application of its climate goals to the resource-based sectors along the lines set out in a recent letter from Premier Smith to the prime minister. The letter puts forward some sensible ideas to encourage investment in lowering the carbon intensity of oil and gas production, as well as new technologies such as Carbon Capture Utilization and Storage, hydrogen, geothermal, and nuclear. 

But its key point is more fundamental: the ultimate goal of federal policy shouldn’t be the managed decline of oil and gas employment through regulations, taxes and transfer payments but rather the support for sustainable, high-paying employment opportunities through a mix of emission-reducing technologies and low-emitting energy exports. 

Put differently: instead of a just transition plan, what we actually need is a low-carbon export strategy that strengthens the domestic conditions for the development and adoption of low-emitting technologies and shapes the global trading and reporting regime for emissions accounting between importing and exporting jurisdictions.

Such an agenda may not satisfy the most hardcore climate activists but it would reflect a proper understanding of justice in terms of ensuring that the costs and consequences of climate policy aren’t disproportionately borne by resource-based workers and communities. That’s the basis of a just and durable climate change agenda for Canada. 

Howard Anglin: Canada deserves to be relegated from the G7

Commentary

The saintly editors here at The Hub have agreed to my request to produce one of my two monthly articles for the site as a monthly transatlantic diary. For those readers not familiar with the format, which is more common in British journalism, the diary is a grab bag of short items, sometimes on a common theme, but often not. In my case, what they have in common is that they are either too inconsequential to merit a full article or I can’t be bothered to come up with more than a knee-jerk reaction or a flip comment. This is January.

January

January is my birthday month, and not coincidentally the most depressing month of the year. Across most of Canada, it’s the month when the spark of hope provoked by an unblemished calendar is extinguished by the looming reality of four more months of winter (on the west coast, substitute rain for winter). Here in the U.K., the mood, as well as the weather, is not so just cold but damp. When I arrived for Hilary term, Oxford was floating. The meadows around the city are lakes, and anywhere you can see grass you can be sure it is just the deceptively solid surface of a marsh. We are like a temperate colony of Thesiger’s Marsh Arabs. Walking across Port Meadow in the dark to my birthday dinner, I soaked both shoes and one sock to mid-calf. Fortunately, the fire at The Perch did its job. I’ve no doubt the public health commissars who are determined to stamp out all traditional sources of joy have deemed wood-burning fires a menace; if so, I’m glad the good folk at The Perch are sticking with the old ways for now. The last thing one wants to see entering a pub with two wet feet is the pallid glow of an electric heater.

* * *

I mentioned that the mood in Ye Jolly Olde is dreary, but I should add that that is not an unusual state of affairs. With the exception of the uncharacteristically vulgar effulgence of “Cool Britannia” in the late-1990s, the British mood since it abandoned its imperial ambitions has been ironic resignation, occasionally descending into dignified gloom. Politically speaking, we’re in one of the gloomy periods. No one, not even I suspect most of their MP’s families, is even considering voting for the incumbent Conservatives, but neither does anyone, including most Labour supporters, seem particularly enthusiastic about Labour leader Keir Starmer, who has all the charisma of three-day-old rice pudding. His 20-point lead in the polls is testament to the fact that, as of now, the system offers disaffected voters no other choice. 

* * *

After almost thirteen years of Conservative rule, the country is far less conservative in just about every way imaginable—culturally, socially, legally, religiously, fiscally. About the only good thing that can be said of the party’s tenure is that it corrected a fifty-year-old error by extricating Britain from political entanglement with the corrupt and undemocratic European Union. Otherwise, taxes are up, service is down, strikes are back, and the borders are open. It’s no wonder the Conservatives are facing a generational defeat in the next election. I almost feel sorry for Rishi Sunak, who is like a junior officer promoted to command of a garrison after it’s already been overrun. It’s not his fault the senior officers wasted all the ammunition on hunting parties before being relieved of command for incompetence, but he’s going to be the poor bugger facing the enemy’s spears at close quarters.

* * *

If things weren’t bad enough on the home front, it was recently reported that a “senior U.S. General” had bluntly warned Ben Wallace, the former U.K. minister of defence, that the U.K. military “is no longer regarded as a top-level fighting force.” It makes one wonder what the Americans must think about Canada’s military. I suspect the answer is that they don’t. Yes, the CAF performed impressively in the ill-conceived war in Afghanistan, but instead of building on that experience, consecutive governments have seen defence as a politically-painless source of budget savings. The idea that we might meet our NATO obligation of spending 2 percent of GDP on our military is, at this point, almost unimaginable. 

* * *

Putting on my cynical hat, perhaps the chronic underfunding of the CAF is fine. What are we going to do with a bigger and more capable military anyway? Embroil ourselves in more West African civil wars? Read the government’s description of the pathetically undermanned Mali mission—ironically named Operation Presence (at least someone at DND has a sense of humour)—if you want a laugh. Replacing my cynical hat with my political hat, a new government will need to make the case for the Canadian military before it makes sense to increase spending. What is the CAF for? What, for that matter, is Canada for? Does anyone in Ottawa know? Does anyone in Ottawa care?

* * *

Speaking of Canada’s role in the world, I’ve had the nagging heretical thought for some time that it might not be the worst thing if the G7 started forgetting to invite us to its annual chinwag. By objective measure, we should have been replaced by India a few years ago. The shock of relegation might force Canada’s complacent leadership class to consider whether we have more to offer the world than smug lectures and occasional intemperate press releases from the Pearson Building. As a boy, I had an English teacher whose father was one of the last men offered an hereditary peerage. According to my teacher, his father had opted for a life peerage instead because he knew his son and thought it wouldn’t be good for him to inherit a title. There’s a lesson there. As long as we have a seat at the table, we don’t need to earn it. It doesn’t seem to have hurt Australia, South Korea, or Norway not to be in the G7. It may even have helped them. Maybe it would help Canada too.

* * *

Finally, on a lighter note, I see that a Frasier reboot is in the works, with only Kelsey Grammer returning from the original cast. Although Grammer, with his pitch-perfect Jack Benny eye-roles and sardonic ripostes, was outstanding as the centre around which the more colourful supporting characters revolved, I can’t see the new show being more than sad fan service for aging nostalgics, the TV version of those old bands that still tour without most of the original members. I hope I’m wrong, but if I had the choice, I’d rather see Hollywood make a final season of Boss, for which Grammer won a Golden Globe as a Daley-esque mayor of modern Chicago. The pulp drama was loads of fun but, alas, little-watched.

And so, on to February, which at least has the advantage of being shorter than January.