BUSINESS

Harper's 1.3 Million Jobs Vow So Weak It's Just An 'Observation': Economist

09/28/2015 12:41 EDT | Updated 09/28/2015 12:59 EDT
CP

Conservative leader Stephen Harper described his promise to create 1.3 million new jobs by 2020 as an “aspirational goal,” but many economists who’ve looked at the numbers say that goal is hardly ambitious.

In fact, at least one economist argues that Harper’s plan is so lacking in ambition that it’s more of an “observation” about the economy than a policy.

Analysts disagree on just how little it would take to make the plan happen, but David Macdonald of the Canadian Centre for Policy Alternatives (CCPA) says that, under certain growth scenarios, that number of new jobs would mean the percentage of Canadians with a job would actually fall.

“Although 1.3 million jobs sounds like a lot, it’s much less impressive once you realize there will be between 1.8 and 2.6 million more Canadians aged 15 years and over potentially looking for work in 2020,” Macdonald wrote at the CCPA blog.

Macdonald looked at three different projections for population growth in Canada between now and 2020. If Canada’s population grows at the “fast” or “medium” projected rates, then 1.3 million new jobs would actually mean a smaller percentage of Canadians would have a job than is the case today.

According to Statistics Canada, the country’s employment rate is 61.3 per cent at present. It would fall to between 60.4 and 61.1 per cent under Harper’s plan if the population grew quickly or at a medium pace, according to Macdonald.

canada population projections

Only if Canada’s population grew slowly would that 1.3 million jobs amount to an increase in the number of Canadians with a job, Macdonald estimates. The employment rate would have to rise slightly, to 62 per cent, to hit that jobs number.

“If anything, Conservative claims of having created 1.3 million jobs since coming to power, and promises to do the same again if re-elected, are mostly observations about what happened in the Canadian economy during this time,” Macdonald wrote.

He notes that the employment rate fell during the Great Recession, and never recovered, which is why he describes Harper’s jobs plan as “five more years of a weak job market.”

Not everyone agrees with that analysis. Trevor Tombe, an assistant professor of economics at the University of Calgary, says that only “very modest changes” would need to be made to reach Harper’s job numbers — but it would require some changes.

On his blog, Tombe disputes Macdonald’s projections. He notes that Canada’s employment rate has fallen not necessarily because of the Great Recession, but because Canada’s population is aging and a growing portion of the population is retiring.

Given the country’s large 55-plus population, Tombe says reaching Harper’s jobs goal would mean increasing the employment rate for everyone, but especially for older workers. Increases in employment among other groups alone wouldn’t be enough to reach the target, he argues.

Tombe notes that the 55-plus group is increasingly staying in the workforce already, and their employment rate has risen to 35 per cent today, from around 20 per cent in the mid-90s.

To reach the 1.3 million jobs goal, that number would have to keep rising to 39 per cent, which “doesn’t seem ridiculous,” Tombe concludes.

The CCPA's Macdonald adds a final caveat to the debate about job creation.

“Population estimates are admittedly a bit of a mugs game considering all that can change in five years,” he writes, “but then again so are specific jobs creation estimates five years from now.”