Tim Hudak, leader of the Progressive Conservative Party of Ontario, holds a press conference in Toronto on Jan. 13, 2014, to talk about his proposed Million Jobs Act.FRED LUM/The Globe and Mail
There's a little fashion in Canadian politics to promise to create a specific number of new jobs, and Ontario Progressive Conservative Leader Tim Hudak is showing us how ill-advised it is.
Jean Charest did it, when he was running for re-election as Quebec premier. It is an eye-catching way of signalling that you are serious about the job market, a top concern for voters. It might be a tempting tactic for federal parties who know jobs will likely be a key issue in 2015. But they should be warned: it's rarely credible. Mr. Charest, by the way, lost.
Mr. Hudak pledged Monday that he would create one million new jobs over the next eight years, giving Ontarians a big round number in his Million Jobs Act.
He can guarantee he'll deliver, if he's elected premier, only if he also gets jurisdiction over immigration, the ability to control the rate of growth of the U.S. economy, and perhaps the power to slow the process of aging.
Even if Ontario's economy booms, and keeps booming, it's extremely unlikely to produce that many jobs. A few calculations should have made that evident, said economist Don Drummond, Matthews fellow at Queen's University.
Ontario's aging population means immigration will account for almost all the growth in the labour force, the people working or looking for work, which now numbers 7.4 million. Most economists predict Ontario's labour force will grow at less than 1 per cent annually.
If the labour force grows at 1 per cent – and that counts on women working more and older people working longer – then creating a million jobs would bring the unemployment rate below the level of "frictional unemployment," Mr. Drummond said. That's when everyone can get employment but some have left one job are in the process of looking for another.
"At the end of eight years, the unemployment rate in Ontario would be about 2.5 per cent," Mr. Drummond said. "We've never had a developed country operating sustainably at an unemployment rate below 4 per cent."
There has been an eight-year period when Ontario saw employment grow by almost million jobs, from 1998 to 2006. But the demographics are different now, with baby boomers retiring.
Aside from being implausible, the million jobs is probably undesirable, and certainly not within the control of a Canadian politician to deliver. But politicians like to promise jobs.
In the 2012 Quebec election, Mr. Charest pledged to create 250,000 jobs over five years, in part by opening the province's north to expanded resource development. The number wasn't impossibly more than private-sector forecasts, though his Quebec Liberals didn't really detail how they'd do it.
B.C. Premier Christy Clark has also been under fire because her highly-touted jobs plan hasn't yet produced results, and Statistics Canada reported a slight decline in employment in the year to December, 2013. But at least she didn't put a specific number on a jobs promise.
The numbers pledged by Mr. Hudak and Mr. Charest are outside a Canadian politician's control.
Aside from labour force growth, there's the rate of growth for key trading partners. U.S. economic growth, as Mr. Drummond notes, has a greater impact on employment in Ontario than anything the provincial government does. And even if there's strong growth, a politician can't predict how much it will translate into new jobs, and high much will be higher productivity – which leads to increased competitivity and higher salaries.
It might be undesirable to create a million jobs in Ontario in eight years – because unless it's driven by a massive economic boom, all those jobs would come at the expense of productivity, and wages would be stagnant.
So why do it? Mr. Hudak, it seems, was looking for a brightly-coloured bow to tie around his package of economic policies.
His plan calls for tax cuts, cutting government incentives for solar and wind power and fostering low-cost energy, training workers for trades, joining an inter-provincial trade partnership with western provinces, and cutting red tape.
Cutting taxes doesn't create jobs directly, but can do so indirectly, by fostering economic growth, but it can be counter-productive if it increases the deficit. Low-cost energy might boost manufacturing, but will raise environmental concerns. The effectiveness of cutting red tape depends on what's cut. And training workers for the trades will create jobs, if it's done right to fill labour needs.
It's an economic plan in the Tory mould, a package that will probably hold some appeal to conservative-leaning voters. But the million-jobs promise is a gaudy mistake.
Campbell Clark is The Globe's chief political writer.
Campbell Clark