Economic Disruption and Sustainability Ripple Effects

Author(s): Scott Douglas Jacobsen

Publication (Outlet/Website): The Good Men Project

Publication Date (yyyy/mm/dd): 2025/04/03

Abigail Jackson, a policy researcher at the Institute for Research on Public Policy, specializes in economic resilience, affordability, and low-carbon transitions. She has contributed to multiple initiatives, including the Toward a More Equitable Canada research program. Jackson highlights that rural communities face economic disruptions due to small populations, remoteness, and lack of economic diversity. She outlines three key factors of workforce susceptibility: facility emissions, industry intensity, and market transformations. Jackson also emphasizes the need for government and private sector collaboration in workforce development. She advocates for community-led transformation strategies, stronger skills training, and expanded support for community futures organizations.

Scott Douglas Jacobsen: Today, we are here with Abigail Jackson, a policy researcher specializing in economic resilience, affordability, and low-carbon transitions. At the Institute for Research on Public Policy (IRPP), she has contributed to multiple initiatives, including the Toward a More Equitable Canada research program and the Supporting Workers and Communities Through Low-Carbon Transition project.

Abigail has played a key role in the Affordability Action Council, serving on its secretariat and co-authoring five policy briefs on food affordability, housing, and transportation in the context of climate and economic challenges. Her contributions to public policy were recognized in 2023 when she received the Jack Layton Progress Prize for a Better Canada.

Before joining IRPP, Abigail worked at Habitat for Humanity, coordinating affordable housing, community development, and energy efficiency programs. She holds a Bachelor of Arts in Business and International Political Economy from the University of Puget Sound and a Master of Public Policy from McGill University.

Thank you for joining us today. I appreciate it.

Abigail Jackson: Thanks for having me.

Jacobsen: Why do rural communities face a higher risk of economic disruption?

Jackson: We found through our project that rural communities tend to be more susceptible to economic disruption because they generally have smaller populations, are more remote, and are less economically diverse than urban areas.

Combined, these factors can make it more difficult for displaced workers to find new jobs within their communities after an economic disruption.

Take economic diversity, for example. If a community lacks economic diversity, fewer employers or industries may exist. When an economic shock—such as a change in prices or demand—occurs, a larger proportion of the workforce is likely to be affected because fewer sectors and employers exist.

The greater the share of people impacted in a community, the more significant the ripple effects. This creates challenges for the workers directly affected and local suppliers, contractors, service providers, and government revenues.

In addition, workers in remote communities often struggle to access essential services and job markets within their communities and nearby areas. This difficulty can make it challenging for communities to retain their workforce.

These are some key factors, though the situation can be much more complex. Every community is different, but we have observed these general trends in our research.

Jacobsen: What factors make a community more susceptible to workforce disruption?

Jackson: Our project identified three key factors determining a community’s susceptibility to workforce disruption. To assess this issue, we developed three specific metrics to measure community vulnerability.

The first is facility susceptibility, which measures emissions from large facilities—particularly those included in the National Pollutant Release Inventory (NPRI). These are facilities that exceed a specific emissions threshold.

So we look at the emissions of those facilities relative to the size of a community. For example, consider a community with a high-emitting cement facility—this could be classified as susceptible under this metric.

The second metric is intensity susceptibility, which measures the proportion of employment in emissions-intensive sectors. A community may have many smaller employers in emissions-intensive industries. For instance, a community with high employment levels in emissions-intensive manufacturing and associated truck transportation could be identified as susceptible under this metric. Truck transportation, as an industry, tends to be emissions-intensive. Even if a community has multiple employers, the cumulative effect of these emissions-intensive industries can make it particularly vulnerable.

The third metric is market susceptibility, which measures the proportion of employment in sectors we have identified as globally traded and either currently undergoing or expected to undergo major market transformations.

For example, consider a community with a high proportion of employment in auto manufacturing. Given the global shift toward electric vehicles, this industry is actively transforming. Many other factors can also contribute to a community’s susceptibility to workforce disruptions.

While we focus on these three key metrics, we also acknowledge other contributing factors, such as:

• The loss of a major employer in the past 10 years
• A major employer undergoing significant transformation or restructuring, even if unrelated to emissions (e.g., automation)

Additionally, we recognize that climate change will cause workforce disruptions. However, these factors are not currently incorporated into our methodology, as they would require extensive calculations, data, and assumptions beyond our current scope. We do hope to explore these issues in future project iterations. Still, our focus remains on the three key metrics I mentioned earlier.

Jacobsen: How are disruptions in one industry rippling through others?

Jackson: When a major employer transforms or shuts down—or when an entire industry or sector declines or evolves—it can have widespread indirect effects across a community and other industries.

For example, businesses that supply parts, goods, or services to an affected facility will also feel the impact.

A case in point is Ingersoll, Ontario. The shift to producing electric vehicles at the General Motors CAMI Assembly Plant—which recently transitioned from manufacturing internal combustion engine vehicles to electric delivery vans—led to the closure of several local parts suppliers. In particular, suppliers that produced components for drivetrains were affected, as electric vehicles no longer require the same parts for internal combustion engines.

These changes throughout an economy can create ripple effects. Workforce disruptions may impact parts suppliers but can also affect other sectors, such as tourism and services. Local restaurants, social service providers, and even local government tax revenues may decline, leading to changes in government-led sectors.

This strain can affect multiple areas of a community. While it is difficult to measure the full extent of the ripple effect, it is certainly present. The long-term effects will depend on the industry affected, but they can be significant in many cases.

For instance, local housing markets could be affected if workers relocate, influencing the construction sector, contractors, and related industries. Additionally, changes in the movement of residents—whether due to job disruptions that create an influx of opportunities or outflows due to economic downturns—can be just as disruptive. These imbalances in supply and demand have widespread effects on a community’s economy.

Jacobsen: How does the IRPP see the role of governments and the private sector in community resilience?

Jackson: We believe governments at all levels are critical in supporting workers, employers, and entire communities through the low-carbon transition.

Through this project, we are developing a suite of policy recommendations focused on:

• Community-led economic development
• Skills and training programs
• Support for workers who lose their jobs
• Helping major employers adapt to market changes
• Ensuring community social services are prepared to provide support during disruptions

Our first set of recommendations is our primary focus at the moment, as we are still in the process of developing the others. This initial set emphasizes empowering community-led transformation strategies grounded in economic development planning.

Our research has shown that economic transformations are most effective when developed and led by people who live and work in the affected communities. Therefore, we recommend that governments support this community-led transformation process while incentivizing private companies to invest in and around at-risk communities.

This could be achieved through:

• Enhancements to investment tax credits
• More generous financial support based on location
• Expanded eligibility for specific government programs

There are many possible approaches, but the ultimate goal is to encourage investments that foster economic diversity and growth in vulnerable communities. This will help them build resilience against future market, technological, or policy changes.

The private sector also plays an essential role in this process. Many companies already offer in-house training programs, and some facilities actively collaborate with local communities to coordinate workforce development and strategic investments.

Greater public and private sector collaboration will be essential for building proactive, long-term support for these vulnerable communities. We will release more detailed recommendations in upcoming policy briefs throughout the summer and fall. Still, I will leave it there for now.

Jacobsen: How can community future organizations be empowered?

Jackson: Community futures organizations have immense potential to enhance and support strategic economic development planning in vulnerable communities.

These organizations exist nationwide and are already present in—or near—many communities we have identified as susceptible. Local leaders govern them and support small businesses, particularly in rural areas.

Many of these organizations go even further in Quebec by providing strategic economic development capacity for communities. In British Columbia (BC), provincial and federal governments provide funding and support for community futures organizations, demonstrating a model for effective local collaboration.

However, these organizations face significant resource limitations. Their federal funding has not been increased in nearly a decade.

To empower these organizations, we recommend:

• Expanding their mandate to take on a more strategic leadership role
• Increasing financial support so they can improve integrated planning across different communities, particularly in vulnerable areas

Jacobsen: The Canadian Centre for Community Transformation will be a repository for best practices, case studies, and data. How would this differ from existing networks?

Jackson: Great question. We recommend that the federal government establish the Canadian Centre for Community Transformation, a dedicated institution providing information and supporting the design of government programming.

For example, a community in Saskatchewan could learn from the experiences of a community in Newfoundland and Labrador and vice versa. Better access to local data and case studies could lead to more effective economic development strategies nationwide.

Innovation, Science and Economic Development Canada (ISED) could house this information hub. By being part of this federal department, it could draw on resources from:

• Regional development agencies (which also fall under ISED)
• Community futures organizations (which receive federal funding through ISED)

This approach would allow for better coordination, improved data-sharing, and stronger support for economic resilience across Canada.

This centre would differ from existing networks because it would draw on data and resources from various parts of government and community organizations. It would centralize this information, making it accessible, user-friendly, and easy to navigate—a critical aspect of its purpose.

Additionally, the centre could serve as a unique facilitator of collaboration, not just through an online platform but also through in-person gatherings. These knowledge-sharing exercises allow communities to exchange best practices, lessons learned, and innovative strategies, bringing people together nationwide in new and impactful ways.

Jacobsen: What training and programs might be critical to help residents adapt to changing industries? You alluded to this earlier.

Jackson: Yes, we know that skills training is essential for ensuring the long-term success of workers and their communities. We are currently developing a policy brief on skills training to explore this issue in greater depth.

However, what we already know from the data is that:

• Workers in vulnerable communities tend to have lower levels of formal education than those in non-susceptible communities.
• Regional mobility is low—meaning that workers are less likely to relocate for employment opportunities when job losses occur.

For many reasons, community members often prefer to remain in their local areas and build upon existing opportunities. There are multiple pathways for workers to engage in skills training, including:

• Employer-provided programs
• Government-funded training initiatives
• Local colleges or institutes
• Self-directed learning

However, the complexity of navigating these opportunities—considering the job market, required skills, available programs, and funding options—makes it crucial for workers to receive personalized assistance in their job transition journeys.

At the federal level, the Sustainable Jobs Plan includes many programs to promote skills training related to the low-carbon transition. However, a key concern about this plan is that it primarily focuses on specific sectors and job types.

We must ask whether the supports offered through these programs and policies align with the needs of workers in vulnerable communities, particularly in areas that currently lack access to green industries.

A comprehensive approach to workforce development should consider the following:

• All workers in the community
• All local job opportunities, whether green or not
• The broader economic and social forces shaping these communities
• Existing community assets, particularly place-based resources

By ensuring that workforce development initiatives consider all these factors, we can better support workers in adapting to economic changes while strengthening community resilience.

A comprehensive approach like this will require greater coordination between economic development planning and workforce development programs. As I mentioned, we will have more concrete recommendations to share in the future. Still, those are our high-level insights on what is needed for training programs during this transition.

Jacobsen: Abigail, thank you very much for your time today. I appreciate it. It’s nice to meet you.

Jackson: Great. Well, thank you so much, Scott. I hope you have a great rest of your day.

Jacobsen: Likewise, you too.

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