Socioeconomic and diversity benefits of the Emissions Reduction Fund (ERF) – onshore deployment program (with gender-based analysis plus)

The Emissions Reduction Fund (ERF) onshore program committed to report publicly on the socioeconomic benefits associated with the funding it delivered, as well as the gender and diversity outcomes achieved by the companies that completed projects. Based on a status date of April 1, 2024, this report describes the socioeconomic context of the program’s planning and implementation, and summarizes the employment, training and workforce composition statistics collected by funded companies who have provided final project reports to date (20 of 24 companies).

Background

In 2020, the COVID-19 pandemic led to the shutdown of key sectors of Canada’s economy. The impact was significant for the upstream oil and gas sector, which contributes substantially to the country’s industrial output, gross domestic product (GDP), and energy sector employment. It was in this context that the Government announced its COVID-19 Economic Response Plan, including measures to support the creation and retention of thousands of energy sector jobs, decarbonize fossil fuel activity, and accelerate climate action. Among these initiatives was the launch of the $750 million ERF, which provided nearly $650 million in repayable and partially repayable loans to eligible onshore oil and gas companies between 2020 and 2023 as part of its Onshore Deployment stream.

Natural Resources Canada (NRCan) designed the program to support operators carrying out infrastructure and clean technology projects that reduce or eliminate the intentional venting or flaring of methane-rich gas, related climate forcers and air pollutants. The program offered two main benefits:

• Support for the installation of methane gas conservation infrastructure in under-serviced regions where the methane would otherwise be released into the atmosphere (vented) or thermally destructed (flared); and
• The achievement of additionality, meaning that completed projects can result in deeper methane emission cuts than what are achievable through compliance with government methane regulations alone.

The ERF-funded projects facilitated reductions in methane and other greenhouse gas (GHG) emissions and mitigated pandemic-related job losses by creating new employment and training opportunities, allowing the industry to maintain its focus on methane abatement initiatives. The program’s planning and oversight included factors such as employment, skills development and measures to support diversity and Indigenous participation. Section I of this report covers details of employment, job retention and training associated with completed projects, while Section II summarizes the funded companies’ voluntary reporting on diversity, equity and inclusion (DEI) initiatives. The program’s design and outcomes were evaluated using the Government of Canada’s ‘gender-based analysis plus’ (GBA+ approach, which is discussed in the conclusion.

Socioeconomic Benefits of ERF Programming – Employment and Training

Crude oil pricing is the most important factor that drives the gross domestic product (GDP) invested, rate of production and capital expenditures in the fossil fuel industry. A global decline in these metrics started with an unresolved price war between Saudi Arabia and Russia in March of 2020, which was exacerbated by the COVID-19 related reduction in overall energy demand, along with restrictions on mobility and constraints on supply chains. The Government has documented that real GDP in Canadian oil and gas dropped by about 15 percent from early 2020 to August of that year and took more than a year to recover. By April 2021, it had returned to 95 percent of the pre-crisis level from January 2020.^{Footnote 1}

Employment in the sector was comparatively less volatile, dropping by 6 percent from January to October of 2020, and recovering slowly afterwards.^{Footnote 2} Pandemic-related employment losses were concentrated in Alberta, Saskatchewan and British Columbia, which together represented 87 percent of Canada’s oil and gas sector jobs in 2019.^{Footnote 3} Relief benefits provided by governments and employers helped to minimize some of the impact of supply chain interruptions, business closures and travel restrictions that could have resulted in unprecedented layoffs and job losses, especially for small and medium-sized companies. Table 1 depicts the distribution of ERF funding to micro, small, medium and large enterprises.

Table 1: ERF-funded company/client types

Company/Client Types	Number of Companies
Industry - Large (company whose total number of employees is 500+)	3
Industry - Medium (company whose total number of employees is 100-499)	8
Industry - Small (company whose total number of employees is 5-99)	12
Industry - Micro (company whose total number of employees is 1-5)	1
Total	24

Following project completion, ERF funding companies were required to submit project completion reports that describe how the funding was used and how the project achieved its objectives. As of April 1, 2024, 20 of 24 companies had submitted their reports. Data remains outstanding for some Intake 3 projects that are at or near completion, and for sub-projects with approved extensions. As shown in Table 2 and 3 below, a total of 58 ERF-funded projects were able to support direct employment and/or training in the engineering, design, installation and/or operation of new methane mitigation infrastructure. Additionally, the projects created indirect employment for workers in related industries and specialized occupations.

Table 2: Highly qualified personnel (HQP) employed and/or trained – dedicated hours and FTEs attributable to ERF-funded projects – direct employment (58 projects)

Direct employment	Number of dedicated hoursFootnote *	Number of full time equivalents (FTEs)Footnote *
Trades (technologists, operators, etc.)	32,404	236
Professional (engineers, project officers, managers, etc.)	31,752	405
Other services (administrative, etc.)	3,553	99
Total	67,708	740

Table 3: Highly qualified personnel (HQP) employed and/or trained – dedicated hours and FTEs attributable to ERF-funded projects – indirect employment (58 projects)

Indirect employment	Number of dedicated hoursFootnote *	Number of firms contracted
Engineering, procurement and construction (EPC)	107,654	122
Manufacturing and/or fabrication	432,314	269
Consulting (e.g., electrical, instrumentation, mechanical)	196,194	256
Transportation and logistics	139,669	164
Other services (administrative, etc.)	22,959	153
Total	898,790	964

ERF-funded projects helped to mitigate the impact of COVID-19 related restrictions and lockdowns, by enabling oil and gas operators to safeguard direct employment of at least 740 full-time equivalent positions (e.g., engineering, production/operations staff, financial controllers). The projects also supported significant indirect employment, notably when companies were contracted to provide manufacturing/fabrication of emissions mitigation technology and equipment, as well as oilfield construction. Other employment was supported through outsourced and contracted engineering services, transportation and logistics, as well as in the administrative capacities involved in project management such as finance and supervision. In total, 964 firms have been contracted to provide goods and services, representing more than 898 thousand hours dedicated to completing the projects.

Diversity-related benefits of ERF programming

Across Canada’s energy sector, institutionally and culturally embedded biases put many groups at an unfair disadvantage in the labour market. These groups include Indigenous Peoples and underrepresented groups such as newcomers, ethnic and racialized communities, women, youth, 2SLGBTQ+ people, persons with disabilities, and those living in rural, remote and Northern communities. Even before the COVID-19 pandemic, many Canadian oil and natural gas companies had committed to strengthen their DEI policies including more supports for workers and working to eliminate barriers and exclusions.

Diversity refers to the variety of different identities found within an organization, group or society,^{Footnote 4} while diversity benefits are the positive outcomes resulting from the inclusion of persons who have a variety of identities, abilities, backgrounds, cultures, skills, perspectives and experiences. Equity entails the consideration of people's unique experiences and differing situations, and ensuring they have access to the resources and opportunities that are necessary for them to attain fair or just outcomes.^{Footnote 2} Inclusion is the practice of using proactive measures to create an environment where people feel welcomed, respected and valued, and foster a sense of belonging and engagement.^{Footnote 2} It is important to understand that while an inclusive group is inherently diverse, a diverse group is not always inclusive. It is for this reason that effectively incorporating diversity and eliminating barriers to equity and inclusion enables companies to meet established environmental, social, and governance (ESG) performance criteria, and allow them to better represent the diversity of the communities and regions where they operate. As part of the clean energy transition, the expansion of GHG mitigation activity at oil and gas operations represents an important opportunity to recruit and retain more diverse and specialized teams.

During recovery from the pandemic, some of the ERF-funded companies reported that they had established targets for increasing gender diversity in their workforce, including in management and pay equity. They voluntarily provided the program with information on the gender and diversity profile of their operations in their Project Completion Reports. This data is disaggregated (see Appendix) to quantify the representation of individuals who are Indigenous, part of a visible minority, or members of specific age, gender, or other underrepresented groups. However, some additional diversity metrics were not reported on due to privacy considerations.

As of April 2024, program data collected includes information on:

• Workplace diversity within participating companies (Table 4);
• The status and future plans for gender and diversity policies (Table 5); and,
• The ongoing or upcoming training/awareness-building initiatives intended to increase inclusivity and diversity (Table 5).

Table 4: Workforce diversity at the company level

The Program committed to report, where available, on full-time employment data for Indigenous peoples, visible minorities, youth (under 30), and women. These are depicted in Table 4 and include percentages of representation in the overall workforce and in management:

Workforce segment or group:	Number of full-time equivalents (FTEs):	Percentage of overall workforce (average):	Percentage of management positions (average):
Indigenous peoples	73	5	2
Visible minorities	99	8	13
Youth (under 30)	25	5	0
Women	202	19	14
Total	399	-	-

With only six (6) companies reporting, the data has limited value for making broader conclusions. However, it is noteworthy that these operators provided data that aligns closely with industry estimates for the representation of equity-seeking groups in the oil and gas workforce (e.g., nearly 30 percent representation of women in the typical corporate workforce). Some differences may indicate underperformance (e.g., the average representation of Indigenous peoples across these companies is lower than the national average of 6 percent across the energy sector).^{Footnote 5}

Table 5: Workforce gender and/or diversity plans

Collected in Table 5 are the reported data from companies on whether they have introduced corporate gender and diversity policies or plans, along with their current status.

Plans reported	Number	Current status	Descriptions/key features
Yes	6	Active	Diversity, Equity and Inclusion (‘DEI’) Policy – includes metrics tracking for gender representation Respectful Workplace policy – employee rights, anti-harassment and anti-violence Corporate Code of Conduct – includes commitments to diversity and inclusion Zero-Tolerance Discrimination Policy Diversity policy – includes female representation and ethnic diversity targets, commitment to diversity of gender expression Diversity Initiative – reviews and analyzes workforce gender information
Planned	3	In Progress	Gender equity and diversity

Six (6) of the ERF-funded companies reported having implemented policies or plans that support gender diversity and other aspects of workforce inclusivity, such as plans to ensure female representation, Indigenous inclusion, the recognition and promotion of employee diversity, and achievement of pay equity across groups. Three (3) other companies report that they plan to introduce a plan of this type soon.

Table 6: Training on workforce diversity and inclusion

As depicted in Table 6, companies reported on training/education and awareness initiatives, including training in ethics and diversity, mandatory courses covering workplace inclusivity, and in engagement with Indigenous communities and workers:

Plans reported	Number	Current status	Descriptions/key features
Yes	4	Active	Diversity, equity and inclusion (‘DEI’) training Conscious inclusion, unconscious bias courses/workshops Psychometric tool to build diversity and difference awareness Indigenous relations and history courses
Planned	3	In Progress	Workforce diversity and inclusion training Unconscious bias training

Four (4) ERF-funded companies have implemented training on workforce diversity and inclusion, with three (3) reporting that they plan to introduce similar initiatives before long. In the context of the COVID-19 pandemic and in the time since, some ERF-funded projects have contributed to the continuation of these trends towards greater diversity, representation and inclusion in the oil and gas sector of women and other equity-seeking groups.

GBA+ analysis

GBA+ is an analytical process used to facilitate inquiry, challenge assumptions, and uncover the systemic inequalities that can affect an individual’s ability to access and benefit from programs and services.^{Footnote 6} Gender-based analysis of public policy was created to identify and address the inequalities experienced by women and girls in the implementation of government policies and initiatives. The approach’s more recent addition of the ‘plus’ acknowledges that diverse identity factors such as race, ethnicity, age, religion, education, and intellectual or physical disabilities often intersect with sex and gender identity, contributing to socioeconomic inequalities.

The Government of Canada is committed to ensuring that GBA+ is applied comprehensively to all aspects of policy development and decision making and is committed to improving the quality of GBA+ with better data and fully considering the impacts. Notably, Canada’s climate-linked initiatives are also incorporating GBA+ analysis into program design.

The principles of GBA+ led the ERF’s program evaluation to recognize that underrepresented groups experience the socioeconomic impacts of fossil fuel activity differently. Because of this, the benefits of the program may be experienced differently by men as compared to women; Indigenous persons; new Canadians; youth and older workers; and by the mobile labour force as compared to local persons living and working in communities impacted by oil and gas development. In this report, under-represented groups refers to minority groups who do not have the same representation as others in the Canadian population.

Summary of GBA+ analysis – ERF onshore deployment program

Target Sector: Conventional/Onshore Oil and Gas Sector

Primary Impacted/Benefitting Group(s): (1) Current and future workers (predominantly male); (2) future generations of Canadians.

Additional Impacts/benefits: The ERF committed to report on program impacts and benefits using a GBA+ approach applied to four (4) groups: Indigenous peoples; visible minorities; youth (under 30); and women.

Group 1 impacts/benefits – Indigenous peoples (e.g., First Nations, Inuit, and Métis workers, communities, governments, and businesses)

Indigenous peoples in Canada faced increased challenges and risks associated with COVID-19, including susceptibility to community spread of the virus and exposure to risks of employment loss and business closures in oil and gas and its related supply chains. According to the Government, in 2021 the sector was one of the largest employers of Indigenous peoples in Canada at 6.3 per cent compared to 3.3 per cent of the national average for all employment sectors across the economy.

Group 2 impacts/benefits – visible minorities (e.g., under-represented ethnic characteristics, familial or cultural backgrounds)

During the pandemic, 24 percent of jobs in Canadian oil and gas were held by the workforce who identified as members of a visible minority; this is a higher proportion than for all other natural resource subsectors, where the average was 18 percent in 2019.^{Footnote 2} In the broader energy sector workforce, the highest percentage of jobs held by individuals identifying as a visible minority are in roles related to engineering, followed by those in skilled trades.

Group 3 impacts/benefits – youth (e.g., persons under 30, future generations of Canadians)

Younger generations of Canadians will benefit from methane emission reductions and climate change mitigation impacts achieved by the program. Additionally, funded projects were carried out by companies that consistently employ young workers and trainees in oil and gas field operations, as well as in project management and skilled trades. This participation fosters skill development, job creation, and a more sustainable future for the youth workforce in the industry.

Group 4 impacts/benefits – women (e.g., persons who identify as female)

The energy sector is one of the most gender imbalanced sectors worldwide. According to the Clean Energy Ministerial Clean Energy Education & Empowerment (C3E) Initiative, in 2020 women accounted for 32 percent of global employment in the energy sector and continue to be underrepresented (26 percent) in leadership positions. According to the Government of Canada’s 2024 energy fact book, in 2021 women held 24 percent of energy sector jobs in Canada with the majority of women in office roles (administrative, general office worker, and auditor accountants and investment professionals)^{Footnote 7}. One of the key barriers to advancing gender equality in the energy sector still remains the limited availability of gender-disaggregated data.

Conclusion

The program supported industry efforts to achieve measurable methane reduction using established and cost-effective technologies to reduce or eliminate venting and flaring, especially for small and medium-sized companies facing financial pressures during and after the pandemic. As a result, the Program directly reduced emissions from Canada’s GHG inventories and contributed to the country’s goal achieving net-zero emissions by 2050. The ERF’s programming focused on Western Canada, where decreases in engineering construction related to resource projects worsened economic downturns in Alberta, Saskatchewan and Manitoba. Furthermore, lower oil and gas extraction levels during the pandemic in Alberta and Saskatchewan also contributed to significant declines in economic activity.

The key design objective at a socioeconomic level for the program was job retention. However, further analysis demonstrates that the funded projects also supported the oil and gas sector’s shift towards a more diverse and inclusive workforce. This is evident with GBA+-enabled analysis indicating that approximately half of the funded companies are progressing on various indicators, such as accommodating diverse identity groups, increasing their representation in the workforce, and providing more opportunities for participation in management. Funded companies have reported significant improvements in representation and pay equity for underrepresented groups including Indigenous peoples, visible minorities, youth, and women. As these projects are completed, the information provided by companies offers insights into the demographics of the upstream oil and gas sector and shows how corporate diversity plans and training are benefiting the industry’s sustainability and competitiveness.

Appendix

Definitions

2SLGBTQI+: The diversity category for persons who identify as any one or more of Two-Spirit, lesbian, gay, bisexual, transgender, queer, intersex and additional sexually- and gender-diverse.

COVID-19: The coronavirus disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2).

Dedicated hours: Cumulative work hours dedicated to project execution from the Project Start Date to the Project End Date.

Direct employment (oil and gas sector): Includes conventional oil and gas extraction; pipeline transport of crude oil; natural gas distribution; petroleum refining; pipeline transport of natural gas, and support activities for oil and gas extraction.

Disaggregated data: Within the context of gender-based analysis plus (GBA Plus), disaggregated data is data broken down by different identity factors such as gender, age, ethnicity, income, and education. This type of detailed data is necessary to conduct GBA Plus throughout the policy and program development cycle, and helps to structure reporting practices during program evaluation and assessment.

Full-tme equivalents (FTEs): Full-time equivalency is calculated as a ratio of “assigned hours of work on the Project” in relation to “scheduled hours of work”. “Scheduled hours of work” represent the normal hours of work (excluding overtime) the Proponent requires employees to work in a given week (e.g., 40 hours/week).

Gender-diverse person(s): A person who does not identify as exclusively man or woman.

Indigenous peoples (or Aboriginal peoples): A collective name for the original peoples of North America and their descendants. The three groups defined as the Aboriginal peoples of Canada in the Constitution Act, 1982, Section 35 (2) are First Nations, Métis and Inuk (Inuit).

Refers to whether a person belongs to a visible minority group as defined by the Employment Equity Act and, if so, the visible minority group to which the person belongs. The Employment Equity Act defines visible minorities as "persons, other than Aboriginal peoples, who are non-Caucasian in race or non-white in colour".