Inconvenient numbers bust government’s fiscal update spin

The Conservative government is up to its old tricks: using selective statistics and incomplete numbers to talk up its economic and fiscal record.

Check out how these key lines in the annual Update of Economic and Fiscal Projections, released Tuesday, don’t really hold up.

Exhibit 1: Canada’s job creation numbers

“Over 1 million more Canadians are working today than at the time of the trough in employment in July 2009. These new jobs are overwhelmingly full-time positions in the private sector, with the majority in high-wage industries.”

Nice try – boasting about job creation since the depths of the recession. But how about looking at the Conservative record since the beginning of the recession in September 2008 – instead of from the extreme low point – to judge how well we are doing?

This perspective, informed by data from the labour force survey of Statistics Canada’s key socioeconomic database, tells us how far we still are from a full recovery.

Between September 2008 and September 2013, 653,400 jobs were added to the economy. But more than half of those new jobs (53.4%) were in sales and services, the lowest-paid occupational category. And these jobs pay an average of just $16.47 per hour – they’re no substitute for the tens of thousands of middle-class manufacturing jobs disappeared during the recession. Further, 40.6% of these new jobs were in temporary, rather than permanent, positions. 

And just last week, Statistics Canada reported that unemployment remained the same as the previous month – and well above its pre-recession level. Remember: this figure excludes hundreds of thousands of Canadians who have dropped out of the labour market altogether. The participation rate remained 66.4%, its lowest level in more than a decade.

The employment rate – the proportion of working-age Canadians with a job – is a better indicator of labour market performance. Erin Weir, an economist with the United Steelworkers, explains that that rate remained at 61.8%, closer to the low point of 61.3% reached in 2009 than to the pre-recession level of over 63%.

“This lack of change might be viewed as welcome stability in better economic times, but it has to be regarded as stagnation given the actual state of Canada’s job market,” wrote Weir. 

Exhibit 2: Comparing Canada with the world

“Over the recovery, Canada has outperformed all other G-7 economies in job creation, with economic growth driven by strong domestic demand.”

Funny how the Conservative government doesn’t talk about an OECD Employment Outlook report released a few months ago.

It shows Canada faring poorly when you look at the change in employment rate (or job creation relative to population growth) between when the recession hit in 2008 and 2012. Canada ranks 20th out of 34 countries, clocking in a negative change of 1.4 per cent. Nine countries, including Germany, increased their employment rate. (Bonus: the report is also critical of Canada’s weak employment protections; Canada is at or near the bottom of the list for each of the 21 criteria, including severance pay and regulation of temporary contracts.)

Unifor economist Jim Stanford explains why playing up job creation without throwing into the mix that Canada’s working age population has grown by 1.75 million since 2008 is a bit misleading. “Showing that Canada’s absolute job-creation rate is stronger than countries with low or even negative population growth, is a chump’s achievement,” Stanford wrote recently.

Photo: triviaqueen. Used under a Creative Commons BY-SA 2.0 licence.