A Bleak Forecast for Canada’s 600,000 Energy Industry Workers

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We don’t know exactly what Chrystia Freeland, Canada’s deputy prime minister and finance minister, will present when she becomes the country’s first woman to deliver a federal budget later this month. But the Liberal government has made it abundantly clear that economic and employment recovery will be its broad theme.

“There are layoffs already occurring in the sector, so there already are people being displaced,” she said adding that’s partly because of the current collapse of oil prices. “But this sector is not going to be turning around. The displacement has started.”

“The oil and gas sector was a huge contributor, not just to middle income jobs but also a lot of them were above average in terms of income,” Ms. Caranci said. I don’t think it’s really widely known or appreciated that this is a key reason Canada has deviated from some of the of the hollowing out of the middle class and inequality.”

The question now, of course, is how to offset the loss of those oil and gas jobs.

A shift to low carbon or carbon free energy sources may help, although Ms. Caranci said the number of jobs they are likely to create is difficult to predict. They also have another problem: It’s not likely that many of them will be in Alberta, Saskatchewan and Newfoundland, the three provinces with the most oil and gas jobs. Plants making batteries for electric cars are likely to be built — if they’re built in Canada — near auto plants in southern Ontario rather than in northern Alberta.

The more than 450,000 jobs that are expected to disappear won’t go away immediately, so there’s still time for planning. Canada’s experience with retraining those who lost factory jobs can give the country an example to avoid, Ms. Caranci said. Those retraining programs largely failed to prepare people for new work or help employers looking for people with new skills.

In the report, Ms. Caranci suggests that Canada replace what she describes as a “patchwork” of retraining programs and income support programs with something more like the system Singapore uses. It works with employers to first identify specific jobs and specific skills they are looking for in workers, then sets up training programs to build skills for those jobs.

“I think what happens is that for governments, the path of least resistance is to throw money at the problem: Here’s money to retrain, here’s money to help for a year,” she said. “We’ve got to throw out what we were doing before and just start over cleanly, thoughtfully with these workers in mind and not try to have programs for every worker in the economy — just the ones who are most impacted.”

A native of Windsor, Ontario, Ian Austen was educated in Toronto, lives in Ottawa and has reported about Canada for The New York Times for the past 16 years. Follow him on Twitter at @ianrausten.

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