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The General Motors announcement of its Oshawa plant closure last month has left many Ontarians reeling. The auto manufacturer claims the closure plan is the result of a global company-wide transformation to meet increased demand for zero-carbon electric and autonomous vehicles.
Ontarians have shown support for low-carbon growth and a desire to remain competitive in an innovation-driven economy. Yet GM’s announcement is a reminder of the discomfort that can result from a disruptive innovation shift.
On one hand, climate science clearly shows a need for innovation so that we can transition to a cleaner economy. On the other, economic transitions require new skills and lead to unemployment in dying industries. Ontario needs to support its market through transitions created by innovation while balancing consequences to its labour force, if we are to wholeheartedly support the shift to a green economy that improves our quality of life.
We have seen various indications of innovation in the transportation sector, although the transition will be dampened by Ontario’s elimination of electric vehicle subsidies. The Canadian government is developing a comprehensive zero-emissions vehicle strategy, which is unlikely to include a zero-emission vehicle target for automakers. Nonetheless, various automakers as well as GM are investing in hybrid, zero-emission, and autonomous vehicles.
One school of economic thought says that innovation is a requirement for economic growth. In theory, technological innovation creates new industries, forcing traditional industries to shut down. In theory, unemployed workers seek training in new skills and find jobs in newly emerging sectors.
The reality is that periods between jobs are difficult for workers, their families and their communities. Some individuals get discouraged and withdraw from the labour market rather than jump into new jobs. Families have put down roots, limiting their ability to move cities for a new opportunity. Financial constraints limit enrollment in training courses. While some companies have a commitment to the wellbeing of their workers and communities, others cannot or choose not to support their workers as they move through these shifts.
Ontario should be more strategic about the labour market
Ontario is correct in supporting the transition of Oshawa plant employees with unemployment and retraining measures, accelerating the return to work of displaced workers. A more strategic approach by Ontario would have been an early response to GM’s prior suggestion that its Oshawa production was guaranteed only until 2020, for example, by creating strategic retraining opportunities in alignment with emerging industries.
Prominent environmental and labour organizations in Ontario have been proposing the creation of an Ontario green jobs strategy for some time now, and a recent report by the Environmental Commissioner of Ontario suggested investment in education and training is needed to capitalize on economic opportunities of clean tech innovation. For example, building retrofits and green construction is an area of growing demand that can provide good work opportunities in the Greater Toronto Area for skilled workers.
However, Ontario’s new climate change plan does not invest in enhancing labour capacity in green industries. This is a crucial omission: economic and consumer trends already indicate a need to adapt to growth in emerging green industries.
Economies do not shift overnight; there is ample time to plan if policymakers have a pulse on market trends. Employers can implement time-sharing arrangements while their staff get new skills training. Governments can provide tax rebates, training subsidies or other incentives for a limited period to maintain momentum in the job market.
The closure of the #GMOshawa plant signals that Ontario urgently needs a green jobs strategy — something Ontario’s new climate plan does not invest in, writes environmental economist @LiliAtHorizon. #onpoli
Companies would benefit from collaborating with government to support workers. The Ford government has clearly demonstrated that the province is not interested in investing in the labor market. Since coming into office, it has taken such measures as scrapping equal pay regulation for part-time and full-time workers doing the same job and reducing emergency leave provisions.
In the absence of a high-profile emergency, such as the GM plant’s closure, this government is highly unlikely to support Ontario’s labour force through policy measures during this period of transition. Failing to prepare the workforce to meet the demands of the changing economy jeopardizes Ontario’s ability to be relevant in emerging clean industries.
Ontarians need to tell their government that they support a transition to a green economy and ask for policymakers and industry to work together to ensure Ontarians stay relevant in the economic shift that is already happening. I urge residents and consumers to do their part and hold the provincial government accountable to ensure that economic innovation is supported in ways that smooth the transition for working people.
Liliana Camacho is the Director of Clean Growth at Horizon Advisors, a boutique consultancy that provides analyses, strategies and solutions for governments and organizations seeking results in environmental protection, green growth and climate policy.