Just Transition to a clean energy future for workers and communities

Many Green Budget Coalition recommendations are aimed at facilitating a transition to a low-carbon economy. This crucial transition will not succeed unless we address the welfare of affected workers and communities and approach the transition from the perspective of equity and fairness. If people working in carbon-intensive fields cannot see a prosperous future for themselves beyond fossil fuels, there will be resistance to the transition.

The Green Budget Coalition welcomes the inclusion of a federal Just Transition Act in the mandate letters to the Ministers of Natural Resources and Labour. In developing this legislation, it is important to involve labour, industry, governments and other stakeholders, and to adhere to the International Labour Organization (ILO) Guidelines. There are

also important opportunities to support Indigenous leadership and participation in the low-carbon economy and to advance goals around reconciliation through Indigenous engagement.

The recent audit of the Commissioner of the Environment and Sustainable Development (CESD) found that the federal government “was not prepared to support a just transition to a low-carbon economy.” Recent economic and energy upheavals demonstrate the urgency for the government to follow through on its promise to implement a national just transition strategy. The Green Budget Coalition strongly encourages the Government of Canada to act on the recommendations of the CESD to avoid the mistakes made in implementing the recommendations of the Task Force on Just Transition for Canadian Coal Workers and Communities.

Embedding a just transition in Canada’s budget and climate agenda will set a strong precedent as the world moves to a low-carbon economy and help increase public support for climate policy.

The Green Budget Coalition encourages the federal government [NRCan, ESDC, PCO] to:

  1. Identify opportunities to scale up just transition funding, including in Budget 2023:
    1. For workers in industries impacted by a transition to a low-carbon economy and the communities that rely on these industries;
    2. For just transition legislation, strategy and implementation while applying eco- conditionality measures to ensure a trajectory consistent with net-zero; and
    3. Identify how the $2 billion Futures Fund will be spent, prioritizing these funds for worker- focused direct supports.
  2. Move forward with legislation and a national just transition strategy, grounded in equity, social dialogue and the ILO Guidelines and that reflects international best practice and a tripartite-plus approach. This should include creation of a federal authority whose work is informed by an independent expert commission with diverse members, including workers from impacted sectors.
    1. Implement and adequately fund the CESD’s full suite of recommendations contained in its Just Transition to a Low-Carbon Economy report and ensure the necessary staffing supports.
  3. Identify opportunities to strengthen job creation, through advancing, retraining and hiring of affected workers, creating opportunities for low-income and vulnerable communities, and carrying out strategic green industrial policy planning, while leveraging opportunities for Indigenous engagement, capacity-building, inclusion and leadership.
    1. Build on pilot projects such as Calgary Economic Development’s Edge Up, that work in partnership with existing educational institutions to retrain unemployed workers from the oil and gas sectors.

Investment amounts should be determined through tripartite-plus processes (including labour, employers, Indigenous groups and other partners). For a sense of the scale of what may be required in Canada, the EU Just Transition Fund is EUR 17.5 billion, in addition to public loan facilities and schemes to mobilize up to EUR 60 billion in investments, and the EUR 145 billion Social Climate Fund that will assist poorer households with transition.116 The Canadian Centre for Policy Alternatives estimates that adequate funding for the proposed legislation would be $16.5 billion per year, decreasing over time.