Canada pipeline push faces limits on oil jobs growth

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Highlights

The proposed pipeline backed by Carney would export 1 million barrels per day to Asia but is expected to generate only limited permanent oil jobs.
Energy Safety Canada forecasts oil sands employment will drop 920 jobs or 4% by 2035 even with a 6% production increase, reflecting automation and efficiency.
Annual oil sands capital investment plunged from C$35 billion in 2014 to C$14.2 billion in 2024, with Alberta sector employment 85,000 below 2014 levels.

Pipeline plan meets a leaner labor outlook

As reported by Reuters, the proposed pipeline backed by Carney would carry 1 million barrels of crude a day to a Pacific coast port, widening access to Asian markets. During a visit to Fort McMurray this month, Carney says he would describe the potential impact as “sustained growth” rather than a new boom, underscoring the gap between higher output and weaker expectations for permanent hiring.

An August labor forecast from Energy Safety Canada projects oil sands employment will fall by 920 jobs, or 4%, by 2035 even as production rises 6%. A spokesperson for the industry group says a new west coast pipeline would likely reverse that decline, but may still add only limited permanent jobs because of the structural trend of producing more oil with fewer workers.

That view is echoed locally in Fort McMurray, where business leaders say the conditions that created the last surge in oil field employment no longer exist. Dianna De Sousa, chief executive of the Fort McMurray Chamber of Commerce, says nobody should expect the industry to expand in the same way it did 15 years ago.

Regional stakes and political risks

Fort McMurray was transformed between 2000 and 2014 by billions of dollars in oil sands investment, with workers earning high wages and companies building large mines and processing facilities. The downturn that followed the 2015 oil price crash, the 2016 wildfire, tighter climate policy and rising investor focus on ESG left the region with fewer jobs, lower incomes and weaker housing values.

Annual oil sands capital investment fell from a peak of C$35 billion in 2014 to C$14.2 billion in 2024, according to Statistics Canada. Alberta’s oil and gas sector now employs 435,000 people, including temporary and part-time workers, which is 85,000 fewer than in 2014, according to Servus Credit Union data, while real disposable income in the province remains 10% below 2014 levels.

Carney’s support for a new pipeline leaves him exposed on both the environmental and economic fronts. Critics on the left argue that faster regulatory approval risks weakening environmental safeguards, while conservatives and industry supporters want stronger growth, higher wages and more jobs to result from deregulation.

No oil sands company has yet committed the C$100 billion in private investment needed to fill the proposed pipeline and develop the carbon capture and storage project that Carney has made a condition of federal approval. Kendall Dilling, head of the Oil Sands Alliance, says the projects could create thousands of jobs across Canada by the mid-2030s, but many of them would be temporary construction roles in Alberta and British Columbia rather than permanent oil-industry positions.

The political backdrop remains sensitive in Alberta, where weak job creation could add to separatist sentiment even though a referendum on whether to hold a vote on leaving Canada is expected to fail on Monday. Carney has also upset some members of his own Liberal party by rolling back parts of Justin Trudeau’s environmental agenda, cutting the tax rate on new capital investment and promoting Canadian oil abroad as the country responds to tariffs imposed by President Donald Trump.

In our earlier article on the AI-linked tech sell-off and oil topping $110 a barrel, we noted that higher energy prices were amplifying inflation fears and complicating expectations for the Fed’s next policy moves. We also described how that mix of volatility and tighter financing conditions was prompting investors to reassess big-ticket investment stories and watch for signs of a cooling labor market.

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