Government committee recommends further study for support for workers amid transition to electric vehicle production

The Standing Committee on Environment and Sustainable Development presented their report, The Road Ahead: Encouraging the Production and Purchase Of Zero-Emission Vehicles In Canada to the House of Commons on April 13.  The Committee had received eighteen briefs and heard from twenty-one witnesses since the Fall of 2020 – available here.  The importance of reducing transportation emissions was accepted, and the topics of discussion included purchase incentives, expanding ev charging infrastructure and the impact on the electricity sector, the potential of hydrogen-powered vehicles, and more. The resulting report makes thirteen recommendations, to which the government is requested to respond. Amongst the recommendations: the existing federal incentive program for EV purchase be continued and expanded to include used EV’s, that the price cap be eliminated, with eligibility geared to income; that the Government of Canada build on existing initiatives, like the Green Mining Innovation program, to improve the environmental performance of Canadian minerals used in battery and hydrogen fuel cell production; and that the federal government  work with provincial and territorial governments to develop recycling and end of life management strategies for ZEV batteries.

Recommendation #6 addresses the concerns of workers: “The Committee recommends that the Government of Canada study opportunities to support automotive sector workers while facilities are transitioning to produce ZEVs, and consider dedicated funding to retrain automotive sector workers for ZEV production.”

Most of the input to the Standing Committee was from industry representatives, but the report attributes Recommendation #6  largely to the testimony of Angelo DiCaro, Research Director of Unifor on November 23, 2020.  From the report: “Witnesses cautioned that it will be challenging to reorient Canada’s automotive sector to produce ZEVs. It takes time for producers to bring vehicles to market, and to retool facilities and retrain workers to produce ZEVs.  Angelo DiCaro suggested that the Government of Canada should ensure that the employment insurance system will support workers during plant retooling. He also noted that the transition to ZEVs could threaten jobs in Canada’s automotive parts sector, especially among businesses that produce parts for the powertrains that propel ICEVs. To compensate, Mr. DiCaro said that Canadian governments should set rules about the afterlife of vehicles that could create jobs in vehicle disassembly and recycling.”    

Specifically, when asked later by NDP MP Laurel Collins, “what kind of retraining and income supports do Canadian auto workers need to support a just transition to a zero-emissions future?” DiCaro identified the powertrain segment of the auto parts industry as the most vulnerable, and continued…. “as plants transition, as will happen with Oakville, we have to see how long these transition times will take in our next round of bargaining. I can assure you that, if this is going to be a two-year or a 16-month transition to get that plant retooled, there are going to be questions about income supports for those workers as they retrain and wait for these cars to come online….. This is front and centre. I think the act of collective bargaining gives us an opportunity to explore that. Certainly our employment insurance system and our training systems are going to have to be looked at more carefully.”

International roadmap to guide the auto industry through disruptive times

The International Labour Organization (ILO)  hosted government, employer, and union representatives at a Technical Meeting on the Future of Work in the Automotive Industry, from February 15th to 19th. Canada’s auto industry union, Unifor, participated in the meeting. As reported in a  press release from the union confederation IndustriALL,  the virtual meetings were at times “confrontational”, but the resulting final document  is called a roadmap for the industry to guide it through its current disruptive transformation.  

The final document, which will proceed to the Governing Body of the ILO in November 2021, sketches out the challenge:

“The industry is at a turning point: technological advances, climate change, demographic shifts, new consumer preferences and mobility concepts, and a transformative era of globalization are rapidly changing the organization of production and work in the industry. The transition to a carbon neutral economy, new mobility patterns and changing consumer preferences are driving investments in new mobility solutions, electric and autonomous vehicles, cleaner production with alternative materials, and greater circularity.”

The Conclusions of the Technical Meeting, agreed-upon by union, management and government, includes the concepts of Just Transition, decent work, gender equality and lifelong learning.  Amongst the conclusions, this recommendation for future actions:

“Governments, employers’ and workers’ organizations should: (a) support the industry navigate through its transformation, accelerated by the COVID19 crisis, and mitigate the impact on enterprises and jobs; (b) advance decent and sustainable work in the automotive industry; (c) promote the acquistion of skills, competences and qualifications and access to quality education for all workers throughout their working lives to address skills mismatches now and in the future and encourage more women to study STEM; (d) jointly engage in formulating and implementing coherent and comprehensive economic, trade, fiscal, education and sustainable industrial policies, incentives and actions, in accordance with national law and practice, to: (i) create an enabling environment for entrepreneurship, increased productivity and for sustainable enterprises of all sizes to grow and generate decent and productive work; (ii) improve working conditions and safety and health at work and extend social protection to all workers in order to promote decent work; and (iii) facilitate a just transition to a future of work that contributes to sustainable development in its economic, social and environmental dimensions.”

Electric vehicle, retrofitting incentives announced by new Nova Scotia government

Nova Scotia’s new government under Premier Iain Rankin was sworn in on February 23, and immediately sent a message that it was committed to climate change action.  A press release titled Province Invests in Climate Change Action, Supports Jobs and Commits to Renewable Future announced a rebate program for new and used electric vehicles, plug-in hybrids and e-bikes, ranging from $3,000 per new vehicle to $500 for electric bikes. An additional $9.5 million will be directed to support energy efficiency improvements through retrofitting for low-income families. Further, the Department of Energy and Mines will release a new Renewable Electricity Standard in March, aiming to achieve 80% renewable energy by 2030. Symbolically, the former Department of the Environment was renamed to the Department of Environment and Climate Change .  Environmental advocacy group Ecology Action expressed optimism in this press release (Feb. 25). The CBC also reported on the new government here .

B.C. offers incentives for charging infrastructure for EV fleets

British Columbia continues to lead Canada in electric vehicle ownership, with more than 36,000 light duty electric vehicles in 2019.  On February 1, the government announced a new program to encourage fleet ownership,  which offers rebates for the purchase and installation of level 2 and direct-current fast-charging stations for fleets of one or more EVs.  “For a limited time, eligible businesses purchasing and installing level 2 charging stations can access a higher rebate of up to $4,000 per station, representing an increase from 50% to 75% of basic rates. Those purchasing EVs for a fleet are eligible for the same $3,000 point-of-purchase vehicle rebates as the general public in B.C.”.  An overview of all the B.C. incentives for EV vehicles is here.  Electric Vehicle Update 2018 and 2019 Calendar Years is the latest statistical report, which includes  that as of 2019,  B.C. counts direct employment of more than 6,000 full-time equivalent positions associated with ZEV-related activities, an increase from 3,850 in 2015.

A  related report released in February by the  American Council for an Energy-Efficient Economy ranks the U.S. states on their policies to encourage the use of EV’s, and identifies the three policies that are likely to be most effective: ZEV mandates and electric vehicle deployment targets, financial incentives for vehicle purchases, and incentives for installing vehicle chargers.  The report ranks California as the national leader as the only state to set deadlines for electrifying transit buses, heavy trucks, and commercial vehicles, and one of few to offer assistance for lower-income drivers to replace high-polluting cars with zero- or near-zero-emissions vehicles.  ACEEE State Transportation Electrification Scorecard is available from this link (free, registration required).

How will electrification of vehicles impact auto workers?

Threats to traditional auto manufacturers are outlined in “The top trends killing the auto industry” in Corporate Knights (Feb. 3), including the climate crisis, the fall of fossil fuels, electrification and autonomous EV fleets, unfunded pension liabilities (US$14.4 billion for G.M., US$10.2 billion for Ford), as well as  shifting government policies, and dampened demand in general. All the more reason to celebrate the good news about investment in EV production in Canada by GM, Ford and Fiat-Chrysler , as well as GM’s January 2021 announcement that it will  sell only zero emissions vehicles by 2035. In February, Ford announced its target to sell EV’s only in Europe.  But the good news is complicated, as described in  “Auto industry peers into an electric future and sees bumps ahead” (Washington Post, Feb. 6)  , and by  “Canada and the U.S. auto sector’s abrupt pivot to electric vehicles” (National Observer, Feb. 15) . For Canada, the challenges include competition for the development of battery technology and the policy challenge of the new “Made in America” Executive Order by President Biden on January 25.  Despite the brief and optimistic overview presented in  “Jerry on the Job: How the president of Canada’s largest union, Jerry Dias, is driving the country’s electric vehicle push” (Corporate Knights, Feb. 4), our highly integrated North American auto industry has a complicated path forward. 

One of the most important issues ahead is how the conversion to electric vehicles will impact the jobs of current auto workers. In late 2020, Germany’s Fraunhofer Institute for Industrial Engineering conducted a detailed study of this issue on behalf of the Sustainability Council of the Volkswagen Group.  Employment 2030 Effects Of Electric Mobility And Digitalisation on the Quality and Quantity of Employment at Volkswagen (Nov. 2020) is an English-language summary of the full, detailed study, which modelled the impacts of digitization and electrification in the industry. Although the study is specific to  VW production in Germany, its findings are instructive, and include that job losses will be less than anticipated, ( a decrease of 12 percent in this decade, mainly due to planned output volumes and higher productivity).  Digitization will result in a need for new skills, “will necessitate a profound change in corporate culture”, and will include higher employee expectations for job flexibility. A summary appearing in Clean Energy Wire   states: “ …. there is no uniform employment trend in the ‘transformation corridor’ over the coming decade. Instead, there will be a complex, interconnected mixture of job creation, job upgrading and job cuts. It argues that it will be vital to ensure that small and medium-sized enterprises (SMEs) do not fall victim to this reorganisation, and warns that Germany’s automotive sector must establish new forms of cooperation so as not to “recklessly surrender the field of mobility to new market players.”  The study is also summarized in a press release by  VW (with links to the full study in German).