POLITICS

Federal Election 2015: Is Canada's Job Creation Really Stronger Than G7 Peers?

08/07/2015 08:06 EDT | Updated 08/07/2015 08:59 EDT

TORONTO — "Let’s be clear what the record is: we have 1.3 million net new jobs created since the global financial crisis — the best record, by far, in the G7." — Conservative Leader Stephen Harper, speaking in Thursday’s leaders’ debate.

"Since the great global financial crisis, Canada has the ... strongest job−creation record ... among any of the major developed economies." — Harper in Thursday’s debate.

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With his economic legacy under fire during the debate, Conservative Leader Stephen Harper quickly leaned on a talking point that has become one of his favourites on the campaign trail.

His statement goes like this: Canada has created 1.3 million jobs and has eclipsed all G7 countries since the darkest economic days of the global recession.

In fact, for at least a year, the Tories have been making similar assertions in the House of Commons to blunt rival attacks on their job−generating record.

Thursday’s debate was no different.

At one point, NDP Leader Thomas Mulcair claimed that with Harper’s Tories in power, Canada lost 400,000 well−paying manufacturing jobs. Mulcair also said there were 200,000 more people unemployed today than before the financial crisis hit in 2008.

Numbers crunched for The Canadian Press show Canada indeed added more than 1.27 million jobs between the mid−2009 trough of the recession and this spring.

But Harper’s argument that the country performed better than all of its peers in the G7 — a group of seven of the world’s wealthiest economies — is harder to pin down.

On one hand, indexed job−creation numbers show Canada led all G7 countries since the recession.

A chart, however, from the Harper government’s own April budget revealed Canada ranked second for employment growth, which is another way to measure the labour market.

Canada landed in the middle of the pack when it came to the employment rate, according to data compiled using numbers from the Organisation for Economic Co−operation and Development.

Spoiler alert: The Canadian Press Baloney Meter is a dispassionate examination of political statements culminating in a ranking of accuracy on a scale of "no baloney" to "full of baloney" (complete methodology below).

This one earns a rating of "some baloney" — the statement is partly accurate but important details are missing. Here’s why.

THE FACTS

The economy added more than 1.27 million jobs between the second quarter of 2009 and the first quarter of 2015, according to Statistics Canada data compiled by TD senior economist Randall Bartlett.

To compare Canada’s job−creating performance with the other G7 countries, Bartlett also indexed the numbers to account for population differences.

He found that Canada’s labour market grew more than any other G7 country between the second quarter of 2009 and the first quarter of 2015. Here’s how much the labour force changed in each member country over that period:

Canada: 7.23 per cent

United Kingdom: 6.91 per cent

United States: 5.68 per cent

Germany: 4.70 per cent

France: 1.66 per cent

Japan: 1.00 per cent

Italy: −1.96 per cent

Pure job creation is only one way to evaluate the performance of the job market.

The spring federal budget contained a chart under the title: "Canada’s employment growth has been among the strongest in the G7 over the recovery."

Canada ranked second with 7.4 per cent growth, behind the U.S., which had rate of 8.9 per cent.

The country fared even worse compared to its peers when it came to employment rate, which shows the percentage of Canadians 15 years old and over earning a paycheque.

Canada’s performance placed it fourth in the G7 over the same period. Bartlett noted that the employment rate is affected by demographics and in Canada’s case it likely hasn’t moved much because of its aging population.

Here’s how much the employment rates in each G7 country changed between the second quarter of 2009 and the first quarter of 2015:

Germany: 2.9 percentage points

United Kingdom: 1.7 percentage points

Japan: 0.7 percentage points

Canada: −0.1 percentage points

United States: −0.3 percentage points

France: −1.4 percentage points

Italy: −2.0 percentage points

The health of the labour force, however, reaches beyond straight job−creation numbers. Other areas of focus include employment quality, youth unemployment, hours worked and wages.

In February, the Bank of Canada’s senior deputy governor said the economy was about 270,000 jobs short of its full capacity at the end of 2014.

At the time, Carolyn Wilkins pointed to several areas of concern, including how the average number of hours worked had remained low. She also said more than one in four part−time workers would prefer full−time jobs.

On top of that, Wilkins said the labour−force participation rate of the "prime−age" workers, between 25 and 54 years old, dropped "substantially" in 2014.

WHAT THE EXPERTS SAY

Bartlett said Harper’s statement that Canada added 1.3 million net new jobs since mid−2009 is accurate.

"It’s been a positive result," he said. But it’s "less clear" when it comes to the argument Canada had the strongest job−creation record in the G7, he added.

Ian Lee, an economics professor at Carleton University’s Sprott School of Business, said Canada had a solid job−creation record compared to other countries in the G7 because it experienced a "much less painful recession."

Lee credited Canada’s more−robust financial regulations compared to the U.S. and Europe.

"It wasn’t anywhere near as deep and we recovered more quickly and more strongly," Lee said.

He cautioned, however, that the effects of the recent oil−price shock may deliver a big−enough hit to the country’s labour−market performance to allow the record of some G7 peers to surpass it.

THE VERDICT

Some baloney

The statement that Canada created 1.3 million jobs over this period is close to the mark, according to the numbers crunched by Bartlett.

While Canada ranked No. 1 in indexed job creation, it ranked second in the government’s own numbers for employment growth. On top of that, it was fourth in the G7 for employment rate.

That’s why the government’s claim contains "some baloney."

METHODOLOGY

Baloney Scale Chart

The Baloney Meter is a project of The Canadian Press that examines the level of accuracy in statements made by politicians. Each claim is researched and assigned a rating based on the following scale:

No baloney — the statement is completely accurate

A little baloney — the statement is mostly accurate but more information is required

Some baloney — the statement is partly accurate but important details are missing

A lot of baloney — the statement is mostly inaccurate but contains elements of truth

Full of baloney — the statement is completely inaccurate

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