Emissions cap: many jobs lost for very few gains, finds MEI

• The measure would cost 112,900 Canadian jobs by 2040.

Montreal, November 4, 2024—Capping emissions in the energy industry will cost Canadian workers dearly, while having only a negligible effect on the environment, observed an MEI researcher in reaction to newly published federal regulations.

“By targeting Canadian producers, the federal government has no effect on global oil demand,” explains Krystle Wittevrongel, director of research at the MEI. “Ultimately, every barrel of oil Ottawa keeps in the ground here will be replaced by a barrel of oil produced elsewhere in the World.

“This announcement has much more to do with Steven Guilbeault’s bias against the energy industry than effective environmental policy.”

Federal Environment Minister Steven Guilbeault is set to publish new regulations today aimed at capping the emissions of Canada’s oil and gas sector at a level 35 per cent lower than in 2019. This cap would apply starting in 2026.

A report published last March by consultancy firm Deloitte estimates that by 2040 the new regulation would lower Canada’s GDP by one per cent in comparison with its potential. In constant 2017 dollars, this represents a $34.5 billion drop in Canada’s economic potential.

According to the same report, capping oil and gas emissions would cause the loss, or prevent the creation, of 112,900 jobs in the country by 2040.

The researcher notes that the jobs in the oil and gas sector are among the highest paid in the country. The average salary of workers in oil and gas extraction is $151,461, which is almost 2.4 times the average Canadian salary.

“There is nothing to indicate that the jobs Guilbeault has in mind for the tens of thousands of workers he seeks to render unemployed are as well compensated as the ones they have now,” explains Wittevrongel. “Considering the negligible effect it would have on oil and gas consumption, it’s easy to understand why workers in the industry think it’s not worth the risk.”

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The MEI is an independent public policy think tank with offices in Montreal, Ottawa and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.

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