Job creation surest path to deficit reduction
OTTAWA — When Finance Minister Jim Flaherty rises in the House of Commons Thursday at 4 p.m. to present his government's 2013-2014 budget, there will be 1.3 million Canadians who are likely to pay particular attention to the measures he will announce.
These are the Canadians who are without work, unable to find a full-time or part-time job.
It's not the biggest army of unemployed that Flaherty has ever faced on a budget day. Through his nine budgets since taking office in 2006 — in 2011 he tabled two budgets after his government was defeated on the first — the worst year for the number of unemployed was 2010, when 1.5 million Canadians that spring were without work.
But still, as Flaherty and his government would be the first to concede, 1.3 million Canadians without work is 1.3 million Canadians too many.
More than any other benchmark by which any government is measured, employment is surely the most important and, in Ottawa these days, it's the central flashpoint for arguments between the Conservatives and their New Democrat and Liberal opponents.
The Conservatives can quite rightly claim that, on balance, through the most severe economic downturn the world has seen since the 1930s, its job creation record has been very good. Both Flaherty and his boss, Prime Minister Stephen Harper, boast at every opportunity that, since the depths of the recession, the Canadian economy has recovered every job lost and then doubled that again. It is inarguably the best job creation record over the past four years in the developed world.
And yet, there are blemishes that the opposition and other independent commentators have quite rightly seized on. Unemployment among aboriginal Canadians is far too high, a blemish all the more tragic because there are so many employers, in Western Canada particularly, that are begging for skilled employees.
The budget, we are told, will have much to say about finding a way to match up unemployed Canadians, aboriginal or otherwise, with the skills needed to fill vacant jobs.
There is also a significant problem with what are called the "long-term unemployed," individuals who have been unable to find work for six months or more.
Last year, more than 19% of those without a job had been without one for six months, up sharply from 2007 when just 13% were long-term unemployed. (Canada, here again, compares favourably to the U.S. on this measure. There, 40% of those unemployed have been without a job for six months.)
"This is a real issue," Bank of Canada governor Mark Carney told the Commons finance committee last month. "One of the issues is that the longer individuals are unemployed, the more their skills atrophy; they lose workplace attachment, and it's a self-reinforcing process."
Flaherty must make it a priority to reduce the number of long-term unemployed, and here again, the key will be to find ways to equip those people with different skill sets.
As a self-professed fiscal conservative, it has also been important for Flaherty to have his government live within its means. Judged on that score alone, of course, his budgets have been abject failures. In eight budget years, he delivered surpluses only twice and deficits every other time.
His cumulative bottom line before this budget? Flaherty and the Conservatives have added a whopping $124 billion to the national debt.
But he has spilled most of that red ink in the name of job creation, correctly concluding that deficits are politically less toxic than rising jobless numbers.
And so once again this year, while Flaherty will take heat from his right flank on spending and deficits, he will be right to argue that a focus on reducing that army of the unemployed is the surest way for his government to appease that right flank and clean up all that red ink.