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Ontario NDP Leader enters job-creation fray with subsidy for full-time hires

Fernando Morales/The Globe and Mail/Fernando Morales/The Globe and Mail

Ontario's would-be premiers are vying to outdo each other in the role of job-creator-in-chief.

After the first week of the campaign was dominated by the Liberal Party's pledge to give employers $10,000 in tax credits for hiring immigrants, Progressive Conservative Leader Tim Hudak vowed in an address to the Economic Club of Canada to make Ontario (with an unemployment rate still above the national average) Canada's leader in private-sector job creation.

And New Democratic Party Leader Andrea Horwath unveiled a job-creation plan of her own, pledging to financially reward employers in all sectors for new hires.

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"It's simple," she told a crowd assembled at an Oakville training centre for sheet-metal work. "Create a job, get a tax credit."

Ms. Horwath's plan would subsidize 20 per cent of wages for all new permanent, full-time hires in their first year of employment, up to $5,000 a head and $100,000 per company. To qualify, employers would have to prove both that the position was new and the employee was receiving training. (The party isn't sure yet how to determine what constitutes a new position, and how precisely to define "training.")

"This will increase the number of jobs available to everyone," she said. "Lots of employers want to expand, they want to bring in new employees; but the up-front cost of doing that is extremely onerous. This is an incentive to say, 'We know you want to do that; we're going to give you a helping hand to make that happen.' "

It's also an attempt to massage a shifting job market. For the past several years, but especially since the 2008 recession, jobs in Canada have shifted significantly toward part-time and contract work, while the number of new permanent positions created annually has dropped.

"I don't think we believe that reality is the way Ontarians want to go into the future," Ms. Horwath said, adding that she hopes this plan will reverse that trend, encouraging employers to hire people full time instead.

For Ms. Horwath, the initiative is personal: Her eyes well up when the NDP bus passes by the Ford plant in Oakville where her dad, Andrew Horwath, worked for decades as a paint inspector.

"It was one salary, but it was enough to feed a family of four. But when I think about now. … I think about my own son – Julian went all summer without a job. He looked and he looked."

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Critics were quick to slam the plan. Companies will not benefit from the NDP's "poorly thought through" tax credit, said Liberal MPP Dwight Duncan, because the party's plans to reverse corporate tax cuts introduced by his party will deter companies from hiring.

"They're just flailing about, proposing to raise taxes on all businesses," Mr. Duncan, the province's most recent finance minister, said in an interview. "That will snuff out new jobs."

Mr. Hudak, for his part, stated flatly that both the Liberal and NDP plans "are killing jobs."

"My goal," he told reporters, "is to make Ontario the best place in all of Canada to start a small business."

Ontario's first post-recession election comes as joblessness fears grabbed Ottawa's attention anew this week. U.S. President Barack Obama's speech on persistently high unemployment rates south of the border drew 31 million sets of anxious eyeballs Thursday evening.

So it makes political sense for party leaders to style themselves as the physician armed with cures for the province's employment-related ailments.

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Not so fast, some economists caution: Anyone promoting a miracle cure to employment problems, they argue, is just hawking snake oil.

Offering tax credits in exchange for job creation can be "a very expensive way to create only a few jobs," said James Milway, executive director of the Martin Prosperity Institute.

"I'm not sure job creation is a number one priority for governments. It would be better to say, 'Is the environment right for businesses to make investments?' " he said. "I think we just need more humility among our politicians as to what they can actually do."

With reports from Karen Howlett in Newmarket and Steve Ladurantaye in Toronto

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