Skip to main content

Ontario job creation falls well short of plan

100,000 new Ontario jobs per year forecast

If Ontario tries to cut its way to a balanced budget, weak employment figures suggest the cuts may have to get a whole lot worse.  Here's why.  

In the Budget, the government projected 100,000 job growth in 2014, 2015, 2016, and 2017. That's an annual increase of about 1.4%. 

But the government is having a problem meeting its jobs target in 2014.  

Comparing the average of the first six months of 2013 with the first six of 2014 shows an increase from 6.861 million jobs to only 6.904 million.  That's only 43,000 new jobs over the year, an increase 0.65% -- less than half of the government's target.  

The Public Sector: Given sharp public sector austerity, the main brake on job creation has been public sector employment. 

Even without Tim Hudak, public sector employment has decreased between the first six months of 2013 and the first six months of 2014 by some 40,000 jobs.  

The good news is that the decline may be easing.  For the most recent month reported, June 2014, public sector jobs were down only 18,700 compared with June 2013.  Earlier in 2014 we were much further back:  in February 2014, Ontario had 57,300 fewer public sector jobs compared with one year earlier.

Public sector job losses holding back job growth in Ontario

Given the austerity both the provincial Liberal and federal Conservative governments propose, public sector jobs are likely to continue to be a brake on job creation.   

The Private Sector: There are some signs of life in private sector job creation, but not nearly enough to offset public sector austerity.  

Private sector employment has increased by 80,400 jobs, comparing the first six months of 2014 with the first six of 2013.  That is a 1.8% increase. Notably, however, for the most recent month reported, there was a loss of 49,600 private sector jobs –  a one month 1.1% drop in the number of private sector jobs.  

49,600 private sector job losses in June 2014 in OntarioSlow job growth and the impact on public services and public healthcare:  The recent provincial Budget was of course an election Budget  -- so it plans a larger funding increase than we have seen in recent years. A whopping 2.55% program funding increase is officially planned. In contrast, the previous three Budgets only increased program spending 4.1% in total. At an annual rate, that is about half the increase proposed in the election Budget .

Many voices for big business are now urging the government to return to a full on attack on public spending. 

Obligingly, the Ontario government’s spending plans for the following three years are extremely grim, much worse even than the three Budgets before the election Budget. A tiny 0.59% increase is proposed for next year, followed by 0.08% (yes  -- 8 one hundreds of one-percent) in 2016-17, followed by a spending cut of 0.67% in 2017-18 to balance the Budget.  In fact the plan is to spend exactly the same in 2017-18 as in 2014-15. 

With inflation and population growth, this means significant real cuts in programs. Even the Globe and Mail estimates this at a real spending cut of 3% per year.

The jobs and growth solution: One easy way out of such an unsettling picture for public sector services (and public sector workers) would be better than expected growth, and better than expected job growth.  

So far, that is not happening.  Quite the reverse.

Of course, it is early days yet.  We will see where the job and growth outlook goes in the months leading up to the next Budget

But without some improvement, even the draconian spending plans now in place may not be enough to balance the budget.

Cutting real public spending is the government's main strategy to end deficits. But it is coming with weaker than planned employment growth and that means we may fall short of the government's plan for revenue growth.  That will drive up the deficit and we are back to square one.  

What's the option then?

If jobs and growth fall short, other ways to deal with the deficit would be [1] more public spending cuts or [2] revenue increases or [3] simply putting off balancing the budget.  More on those options next week.

The full Statistics Canada numbers behind this employment report can be downloaded here.  



Popular posts from this blog

Public sector employment in Ontario is far below the rest of Canada

The suggestion that Ontario has a deficit because its public sector is too large does not bear scrutiny. Consider the following. 

Public sector employment has fallen in the last three quarters in Ontario.  Since 2011, public sector employment has been pretty flat, with employment up less than 4 tenths of one percent in the first half of 2015 compared with the first half of 2011.

This contrasts with public sector employment outside of Ontario which has gone up pretty consistently and is now 4.7% higher than it was in the first half of 2011.

Private sector employment has also gone up consistently over that period. In Ontario, it has increased 4.3% since the first half of 2011, while in Canada as a whole it has increased 4.9%.

As a result, public sector employment in Ontario is now shrinking as a percentage of the private sector workforce.  In contrast, in the rest of Canada, it is increasing. Moreover, public sector employment is muchhigher in the rest of Canada than in Ontario.  Indeed as…

The long series of failures of private clinics in Ontario

For many years, OCHU/CUPE has been concerned the Ontario government would transfer public hospital surgeries, procedures and diagnostic tests to private clinics. CUPE began campaigning in earnest against this possibility in the spring of 2007 with a tour of the province by former British Health Secretary, Frank Dobson, who talked about the disastrous British experience with private surgical clinics.

The door opened years ago with the introduction of fee-for-service hospital funding (sometimes called Quality Based Funding). Then in the fall of 2013 the government announced regulatory changes to facilitate this privatization. The government announced Request for Proposals for the summer of 2014 to expand the role of "Independent Health Facilities" (IHFs). 

With mass campaigns to stop the private clinic expansion by the Ontario Health Coalition the process slowed.  

But it seems the provincial Liberal government continues to push the idea.  Following a recent second OCHU tour wi…

Hospital worker sick leave: too much or too little?

Ontario hospital workers are muchless absent due to illness or disability than hospital workers Canada-wide.  In 2014, Ontario hospital workers were absent 10.2 days due to illness or disability, 2.9 days less than the Canada wide average – i.e. 22% less.  In fact, Ontario hospital workers have had consistently fewer sick days for years.

This is also true if absences due to family or personal responsibilities are included.
Statistics Canada data for the last fifteen years for Canada and Ontario are reported in the chart below, showing Ontario hospital workers are consistently off work less.
Assuming, Ontario accounts for about 38% of the Canada-wide hospital workforce, these figures suggest that the days lost due to illness of injury in Canada excluding Ontario are about 13.6 days per year ([13.6 x 0.68] + [10.2 x 0.38] = 13.1).

In other words, hospital workers in the rest of Canada are absent from work due to illness or disability 1/3 more than Ontario hospital workers. 

In fact, Canad…