Just Transition comes with big costs

By Franco Terrazzano and Kris Sims

Ottawa seems to have only one message about its Just Transition policy: “trust me.”

How many people’s jobs are on the line? How much will it cost? Are the numbers bubbling up accurate?

Those are big questions that matter a lot to a lot of people. And Ottawa answers with a shrug.

Here’s the little we know.

The Liberal Party promised to pass a “Just Transition Act, giving workers access to the training, support, and new opportunities needed to succeed in the future economy” during the 2019 election.

Prime Minister Justin Trudeau previously stated that “we can’t shut down the oilsands tomorrow, we need to phase them out.”

The feds haven’t introduced legislation, so Canadians are left reading between the lines. The government will force Canadians out of some jobs, then use taxpayers’ money to subsidize the new jobs.

Fortunately, a government memo reported by Blacklock’s Reporter shines some light on potential costs.

The memo asks, “what sectors and regions will be most affected by a transition to a low-carbon economy?” The memo then explains the Just Transition “will have an uneven impact” and “create significant labour market disruptions.” What does “significant labour market disruptions” mean?

The government doesn’t say.

Here’s what the memo does say. “We expect that larger-scale transformations will take place in:

• “Agriculture (about 292,000 workers; 1.5 per cent of Canada’s employment),

• “Energy (about 202,000 workers; one per cent of Canada’s employment),

• “Manufacturing (about 193,000 workers; one per cent of Canada’s employment),

• “Building (about 1.4 million workers; seven per cent of Canada’s employment) and

• “Transportation sectors (about 642,000 workers; three per cent of Canada’s employment).”

You could be forgiven for interpreting this to mean the Just Transition will “create significant labour market disruptions” for 2.7 million workers in these sectors.

But the federal government claims “that the figures referred to the overall size of the workforce of various industries, not anticipated job losses,” according to the CBC.

Nothing to see here, folks. Unhelpfully, the feds didn’t bother enlightening Canadians on the real number of anticipated job losses.

Statistics Canada’s numbers raise questions. For example, Statistics Canada’s data shows there’s 1.5 million Canadians working in manufacturing, not 193,000 workers as the government claims. Maybe the government and Statistics Canada are using different definitions. But that’s a big gap.

Politicians and bureaucrats in Ottawa are asking entire sectors of the economy to trust them. But they either don’t know their own numbers or aren’t willing to explain them.

Here’s what we do know: taxpayers will be left holding the bag for Trudeau’s Just Transition.

The salaries associated with the 2.7 million jobs where the “larger-scale transformations will take place” is $219 billion per year, according to Statistics Canada’s average income data for these sectors. The cost to taxpayers would be crushing if even a fraction of those jobs face “disruptions” or have to be replaced with government subsidies and programs.

“We have been particularly interested in the approach taken by Scotland,” states the government memo. Scotland’s “Just New Deal” costs about $4.9 billion. That equals a $35-billion hit for Canadian taxpayers, after adjusting for Canada’s larger population, if Trudeau followed Scotland’s approach.

Why should workers in these sectors put their blind faith in the government

Farmers might have trouble trusting the government after it floated putting limits on fertilizer. Energy works might have trouble trusting a government that roadblocks pipelines. And why should taxpayers trust a government that has added about $560 billion to the national debt, and missed its own pre-pandemic balanced budget promise by $20 billion?

The onus is on the government to be transparent, not on taxpayers to trust the government. The last thing Canadians need is another costly government scheme that threatens jobs.

Franco Terrazzano is the Federal Director and Kris Sims is the Alberta Director of the Canadian Taxpayers Federation.