Canada will not see significant employment gains from the oil boom in the western part of the country, and should turn to development of green energy to drive future job growth, says a report from a left-leaning think tank.
The Canadian Centre for Policy Alternatives argued in a study published Tuesday that jobs created in the oil sands are fleeting, and the country should establish a plan to shift to a zero-emissions economy -- an ambitious goal the paper says will keep the country from missing out on more green jobs.
While some Canadian jobs will be created in the oil sands in the coming years, “most of them will be of short duration in the construction phase, while permanent jobs will be few due to the capital intensive nature of these industries,” the report stated, suggesting the authors expect technological advances to eliminate existing jobs in the oil patch.
The report goes against claims made by some government and energy industry groups that say Canada’s oil extraction industry will fuel job growth for years to come. The Canadian Association of Petroleum Producers forecasts that employment in the northern Alberta oil sands will grow from around 75,000 today to 900,000 by 2035.
But the CCPA report argues that the oil business doesn’t create as many jobs as the same amount of output would create in other sectors, including the green economy. The report notes that one per cent of Canadian workers are employed in fossil fuel extraction, even though the industry accounts for 4.8 per cent of Canada’s economic output.
“A study in the U.S. found the number of jobs created [in the green economy] can be almost three times that of fossil fuels per megawatt of wind or biomass power,” the report states.
The report also notes that what it defines as the green economy already employs more people than the energy industry in Canada. It cites earlier research that reported 682,000 Canadians, or about four per cent of workers, are engaged in the green economy. (The study defines a green job as one where more than 50 per cent of time is spent on environmental protection, resource management or environmental sustainability.)
By comparison, 1.5 per cent of Canadian workers are engaged in mining and oil and gas extraction, the report states.
The CCPA study urges Canada to adopt a carbon tax that would make switching to sustainable energy more economically viable for companies. But it notes that Canada’s current government is headed in an entirely different direction.
“Thus far, there has been no political willingness federally to put a price on carbon emissions, in terms of either a carbon tax or cap-and-trade system, although federal and provincial governments levy fuel taxes that put a de facto price on a narrower range of emissions (these have not been implemented with climate in mind),” the report states.
The report says Canadians are missing out on jobs because of this lack of political will.
“BlueGreen Canada estimates that compared to the United States on a per capita basis, Canada’s lower investments in renewable energy for 2009 and 2010 has resulted in the loss of 66,000 direct and indirect jobs,” the report states.
It notes that, when the recession hit and developed countries implemented stimulus programs, only eight per cent of Canada’s stimulus went to the green economy, compared to 12 per cent in the U.S., 34 per cent in China, and 64 per cent in Europe.
The issue of putting a price on carbon has grown very divisive in Canada in recent years. In an example of how polarized the debate has become, NDP Leader Tom Mulcair and Ontario Premier Dalton McGuinty both took heat from Western Canadian politicians after complaining that oil exports are driving Canada’s Dutch Disease.
Recently, Saskatchewan Premier Brad Wall suggested that proposals for carbon pricing aren’t actually environmental policies, but rather an attempt at transferring wealth out of Saskatchewan.
The oil and gas industries accounted for around $65 billion of economic activity in Canada annually in recent years, or slightly less than 5 per cent of GDP. Source: Canada Energy Research Institute
Canada exported some 12,000 cubic metres of oil per day in 1980. By 2010, that number had grown to 112,000 cubic metres daily. Source: Canadian Association of Petroleum Producers
Canada refined 300,000 cubic metres daily in 1980; in 2010, that number was slightly down, to 291,000, even though exports of oil had grown tenfold in that time. Source: Canadian Association of Petroleum Producers
Despite talk by the federal government that it wants to open Asian markets to Canadian oil, the vast majority of exports still go to the United States -- 97 per cent as of 2009. Source: Natural Resources Canada
Canada's proven reserves of 175 billion barrels of oil -- the vast majority of it trapped in the oil sands -- is the second-largest oil stash in the world, after Saudi Arabia's 267 billion. Source: Oil & Gas Journal
One-third of Canada's oil sands bitumen stays in the country, and is refined into gasoline, heating oil and diesel. Source: Natural Resources Canada
Despite its reputation as the undisputed centre of Canada's oil industry, Alberta accounts for only two-thirds of energy production. British Columbia and Saskatchewan are the second and third-largest producers. Source: Natural Resources Canada
Alberta' government will reap $1.2 trillion in royalties from the oil sands over the next 35 years, according to the Canadian Energy Research Institute.
Thanks to improvements in energy efficiency, and a weakening of the country's manufacturing base, oil consumption in Canada has had virtually no net change in 30 years. Consumption went from 287,000 cubic metres daily in 1980 to 260,000 cubic metres daily in 2010. Source: Source: Canadian Association of Petroleum Producers
The National Energy Board says oil and gas employs 257,000 people in Canada, not including gas station employees. And the Canadian Association of Petroleum Producers says the oil sands alone will grow from 75,000 jobs to 905,000 jobs by 2035 -- assuming, of course, the price of oil holds up.