Energy workers still waiting for federal relief

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By Gavin McGarrigle, Western Regional Director and Linda MacNeil, Atlantic Regional Director

The speed and depth of the economic downturn inflicted by the COVID-19 crisis has been unprecedented. The Canadian economy took a 9% hit to its gross domestic product in March 2020 and the labour market shed over a million jobs. The numbers for April and May are likely to be even worse.

In the energy sector, these economic impacts have been exacerbated by a price war between Russia and Saudi Arabia that have seen a glut of oil being supplied at a time when demand has declined to levels last seen a quarter of a century ago. The Canadian oil and gas sector has been hit particularly hard, with the price of a barrel of Western Canadian Select costing more to ship than to purchase.

At a time like this, when Canadian workers from all walks of life are facing severe financial strain and finding it impossible to pay their monthly rent and bills, it’s understandable that many would be wary of support packages for industries such as the one announced last Friday by the federal government for Canada’s energy sector. Most of us remember the indiscriminate bailouts of companies during the 2008-9 financial crisis, which saw corporate executives around the world use bailout money to fatten their pay and boost stock prices through share buybacks, while footing taxpayers the bill.

For oil and gas companies in particular, many are asking whether a support package makes sense at a time when we should be shifting our attention to companies producing green technology and renewable energy. In other words, if the COVID-19 crisis hastens the demise of the energy sector as we know it, perhaps we should use this as an opportunity to springboard onto a carbon-free future.

The problem with such thinking, however, is that it ignores the nearly one million workers in Canada who currently depend on the energy sector for their livelihoods. Without a clearly defined path forward for the sector, leaving oil and gas companies to their own devices at a time like this ultimately means abandoning these workers to an unknown future, both during and after the crisis. As the labour movement has so often stated, we need a just transition for workers in the fossil fuel industry, not a haphazard or nonexistent one.

A just transition does not mean ignoring our climate commitments and giving oil and gas companies a blank cheque. Quite the contrary – it means using financial incentives and legal instruments to hold the energy sector accountable and ensure that the sector successfully transitions towards a greener, low-carbon future, while jobs are protected and workers are taught new skills.

The recent support package – $1.7 billion to clean up orphaned wells and a $750 million emission reduction fund, including $75 million to help reduce methane emissions in the Newfoundland offshore oil industry – is a step in the right direction. It incentivizes the energy sector to maintain jobs while reducing pollution and carbon intensity. It also recognizes the particular challenges that the offshore industry currently faces as it confronts the most difficult economic challenges in its history.

More must be done, however, to ensure that the oil and gas industry both survives the current crisis and is able to maintain existing jobs. The government should impose stringent conditions on executive pay and share buybacks to ensure that funds are used to protect jobs rather than corporate greed. Support packages should be attached to specific job guarantees around the future deployment of clean technology and carbon intensity reduction. There must also be rigorous oversight of disbursed funds to guarantee that capital investments are not being used to automate existing carbon-intensive operations and to lay workers off.

Finally, workers in regions that depend heavily on the energy sector for their economic well-being will need more financial support. Financial assistance for workers employed directly or indirectly by the energy sector must focus on providing direct income support and ensuring that there is sufficient healthcare resources for workers who may be exposed to COVID-19.

The COVID-19 crisis has been devastating for workers across all of Canada. We are all looking towards the light at the end of the tunnel and the return of the economy. In the meantime, however, the government must support existing jobs and ensure their return once the economy is reopened, while continuing to chart a path towards a low-carbon future. Now is the time to implement the principle of a just transition for workers everywhere.