Canada's energy jobs transition bill sparks discord in oil heartland

By Nia Williams and Steve Scherer

(Reuters) - In Canada's western oil patch, controversy is raging over federal government legislation intended to help the fossil fuel labour force transition to a greener economy, but union and community leaders are warning politicization of the Just Transition bill obscures the needs of workers.

Prime Minister Justin Trudeau's Liberal government is expected to table its long-awaited workforce transition bill this spring, ahead of economic changes expected as they pursue ambitious goals to slash climate-warming emissions.

The government of Alberta, Canada's main crude-producing province, says the legislation will dismantle the oil and gas industry that makes up 5% of Canada's GDP.

"When I hear the words "Just Transition" it signals eliminating jobs and for Alberta, that is a non-starter!" Alberta's Conservative Premier Danielle Smith wrote on Twitter last week.

The oil and gas sector employs around 185,000 workers, making the bill a hot topic in Alberta ahead a provincial election in May. Smith is using the threat of job losses to attack Trudeau and rally her conservative base, although she has been criticised for misinterpreting how many jobs may be at risk.

The Trudeau government is trying to soothe concerns about the bill, first promised in 2019. A government source familiar with the file, who is not authorized to speak publicly, said the legislation will be about principles to guide decisions and creating jobs.

Trudeau told Reuters in a recent interview that the sooner Alberta's "political class" understood the future is not to be feared, the better.

"This shouldn't be a political issue, this is an issue about what's really happening in the global economy," said Gil McGowan, President of the Alberta Federation of Labour (AFL).

COAL PHASE-OUT LESSONS

The focus should be on helping communities adjust to sweeping industrial changes and economic diversification, McGowan said, pointing to Alberta's recent coal phase-out as a case study.

Later this year, Alberta's last coal-fired power station will convert to natural gas, part of an accelerated energy transition first announced in 2015 that will wrap up seven years ahead of schedule.

More than 3,100 people worked in the province's thermal coal industry in 2015. Some workers took early retirement, others went north to the oil patch or moved to other industries, while others found work in mine reclamation or the newly converted gas power stations.

The Parkland Institute research centre estimated in 2019 that up to 3,500 new jobs would be created in renewable energy and coal-to-gas power station conversions, but lead author Ian Hussey now says that number was far too low.

"Renewable investment has taken off in Alberta in a way that was never even dreamed of when we did that research," he said.

The oil and gas sector is currently experiencing a skills shortage amid tight labour markets globally, but the current workforce is 18% smaller than the 2014 peak of 225,900, according to Energy Safety Canada. Think tank Clean Energy Canada estimates there could be 200,000 clean energy jobs created by 2030.

If done right, the bill could incentivise technologies like carbon capture and hydrogen and be Canada's answer to the U.S. Inflation Reduction Act, the $430-billion green energy subsidy package passed last year, the AFL's McGowan added.

Ex-coal miner Len Austin, who now runs a government-funded Just Transition centre supporting former coal workers, said policymakers made a "really good effort" with programs such as retirement bridging, relocation packages and C$12,000 ($8,945.21) retraining vouchers.

But there was insufficient funding for economic diversification and infrastructure projects within coal communities to create new jobs, and governments need to understand not everyone can work in renewables, he added.

"It's 100% not that simple...to go from making C$100,000 to C$40,000 plays a big part in the decision-making that comes with the idea of losing your livelihood," Austin said.

($1 = 1.3415 Canadian dollars)

(Reporting by Nia Williams in British Columbia and Steve Scherer in Ottawa; Editing by Denny Thomas and Josie Kao)