Canada: land of new jobs?

Updated on
The World

TORONTO, Canada — For Canadians, the economic news this summer has been good.

In June, an impressive 93,000 jobs were created, according to the government agency, Statistics Canada. The job growth amazed economists — they had predicted no more than 20,000 more jobs for the month. The unemployment rate dropped to 7.9 percent, the first time the rate has been below the 8 percent mark since January 2009.

“I’m flabbergasted,” economist Derek Burleton, with the TD bank, told the CBC. “It really does speak to the strength of the domestic economy.”

Since July 2009, 403,000 jobs were added to the Canadian economy.

“These gains offset nearly all the employment losses observed during the labour market downturn which began in the fall of 2008,” Statistics Canada said in its job report for June.

Most of the job gains were in the service sector — from retail to health care — and almost all were in the central Canadian provinces of Ontario and Quebec. The surge in jobs come after Canada’s GDP grew a striking 6.1 percent in the first quarter of 2010.

The employment news sent Canada’s dollar creeping closer to parity with the U.S. greenback, helped in its upward progression by an American economy that continues to struggle with unemployment hovering at almost 10 percent.

Few, however, are uncorking the champagne. The United States is by far Canada’s biggest trading partner and economic growth is expected to hit a brick wall unless the outlook south of the border brightens. The slim chances of that happening resulted in Mark Carney, the Bank of Canada governor, reducing growth estimates for this year from 3.7 percent to 3.5 percent.

Moreover, the key manufacturing sector — with its better paid and more likely unionized jobs — continued to shed workers. And half of the jobs gained last month were part-time, many of them linked to the G8 and G20 summits held in Ontario June 25-27. Many of them, in other words, are not expected to last.

Perhaps the biggest reason for caution is the spending habits of the government presiding over the job blip. Prime Minister Stephen Harper, leader of the Conservative Party, is widely seen as being on a spending spree driven by ideology and politics.

When Harper came to power with a minority government in 2006, he found a $13 billion budget surplus left by the previous government. (All money figures cited are in Canadian dollars.) Well before the devastating recession hit in the fall of 2008, he wiped out that surplus through tax cuts designed to win him a majority government. The plan failed.

The stimulus spending forced by the recession then gave Canada a $56 billion dollar deficit. An investigation by the CBC network found that 60 percent of the stimulus funding — to build everything from roads to hockey rinks — went to electoral districts with conservative members of parliament. (Harper’s minority government holds 46.4 percent of Canada’s 308 districts.)

For the G8 and G20 summits, Harper spent an astounding $1 billion on security — far more than in any previous G8 or G20 summit — and turned downtown Toronto into an armed camp.

In parliament, his government has passed legislation that reflects long-discredited American policies that have filled prisons to bursting. Kevin Page, parliament’s budget watchdog, estimates the longer jail terms will add another $1 billion to the $1.6 billion the federal government spends annually on its prison system. Harper calls it being tough on crime. He’s silent about the fact, however, that Canada’s crime rate has tumbled more than 25 percent during the past 15 years.

The spending continued this month with the government announcing it would buy 65 new F-35 fighter jets at a cost of $9 billion. Some defense experts noted Canada rarely flies combat missions. They described the purchase as out of line with the counterinsurgency operations the Canadian military now performs in Afghanistan, and is likely to perform in the future.

But Harper seems bent on appeasing his right-wing base, no matter what the costs. The latest example is his decision — without public consultation — to end the requirement to fill out a long version of the census. This version — with questions ranging from the number of bedrooms in a home to how one travels to work — is sent to 20 percent of households. It will no longer be mandatory to respond.

Harper’s ministers argue the questions are too intrusive, and the move to a voluntary “long-form” census protects the privacy of Canadians who don’t want to divulge such information.

The move comes with a cost: In the hope of getting as many people to, as in previous years, respond voluntarily, the government will now send the forms to 30 percent of homes. That will cost an extra $30 million.

The change has caused a nationwide uproar. It has been condemned by major groups representing business, academia, charities, social organizations and municipal and provincial governments. The deputy minister in charge of Statistics Canada, the government’s number-crunching agency, resigned in protest.

Statistics from the mandatory census have for decades been used, for example, to determine the needs of poor neighborhoods, or the trends in public transit, and make policies and programs accordingly.

It is widely accepted that some groups are less likely to respond to a voluntary questionnaire — low income families, for instance — and that the results, therefore, could not be compared with those from mandatory censuses of the past. Tracking trends will become more difficult. In short, the government has decided to pay more for less.

But maybe Harper has a different goal. By breaking the statistical trends used to determine program and funding priorities, it makes it harder for Canadians to judge his government’s spending as politically and ideologically motivated. Scrutiny and accountability take a beating.

Sign up for our daily newsletter

Sign up for The Top of the World, delivered to your inbox every weekday morning.