Workers in Canada’s high-emission industries who lost their jobs saw steeper initial earnings declines than displaced workers in many other countries, but their wages rebounded more quickly, according to a new Statistics Canada report.
The study, released Wednesday, examined the long-term earnings impact of mass layoffs in high-emission sectors such as energy, transport, and manufacturing. It drew on Canadian data as part of an Organisation for Economic Co-operation and Development (OECD) project covering 14 countries.
Steep initial drop in earnings
In the year following layoffs, displaced workers in Canada’s high-emission industries lost 73 per cent of their pre-displacement earnings, compared with a 67 per cent decline among workers from other sectors. The average drop across the OECD was smaller—57 per cent in high-emission industries and 51 per cent in others.
In absolute terms, that translated to an average loss of $40,800 in annual earnings (in constant 2015 dollars) for workers in high-emission industries, compared with $27,900 in other industries.
Recovery outpaces OECD peers
Despite the steep losses, Canadian workers regained earnings faster than many of their OECD counterparts. By the second year after layoffs, their annual wages were down 24 to 28 per cent compared with pre-job-loss levels, while workers in other OECD countries faced declines of 33 to 41 per cent.
Over six years, displaced workers in Canada’s high-emission industries earned on average 29 per cent less than before job loss. Those from other Canadian industries were down 25 per cent. In comparison, OECD averages were steeper—38 per cent in high-emission industries and 32 per cent in others.
Policy implications for transition to net zero
Statistics Canada said the findings suggest workers in high-emission sectors face greater immediate economic shocks but also show relatively stronger recovery patterns. The agency noted the results are important for shaping policies around career transitions as Canada and other countries move toward net-zero greenhouse gas emissions.
The report also cautioned that while some displaced workers may earn more after transitioning to new roles, many face persistent earnings losses. Indirect effects may also ripple beyond high-emission industries, as reduced demand in those sectors can affect jobs in supporting industries.
