Growing number of economists questioned math behind PC promise of one million new jobs for Ontario
NIAGARA FALLS, Ont.—Tim Hudak was forced to defend his so-called “Million Jobs Plan” for Ontario as a growing number of economists questioned the math behind the promise, which lies at the centre of the Progressive Conservative leader’s election platform.
Despite being hammered repeatedly on the issue, Hudak was adamant that the PC figures were right.
“I stand behind our numbers,” he said at a furnace-making facility in Niagara Falls, Ont. “I simply believe that permanent tax reductions on job creators, more affordable energy is going to create jobs.”
Hudak has promised a PC government would bring a million jobs to Ontario over the next eight years, although about half of those would be created through normal economic growth, regardless of which party is in government.
But first the Liberals, and now a number of prominent economists, including a former federal associate deputy minister of finance, have poked holes in Hudak’s numbers, focusing in particular on the possibility that the Tories misinterpreted information from a report they commissioned from the Conference Board of Canada.
The report, which analyzes the impact of reducing corporate and personal taxes, uses the term “person years of employment” in its projections, which some economists suggest the Tories have confused with permanent jobs, resulting in a vast overestimation of just how many new positions their plan for the province would create.
Mike Moffatt, an economist with Western University’s Ivey School of Business, was among those who’ve penned columns criticizing what he calls the Tories’ apparent miscalculation.
“Most of their numbers are eight times multiplied,” he said in an interview, explaining that the PCs appeared to have counted a person working in a single job over eight years as a separate job for every year of their plan.
“This in no way can be considered a million jobs plan … It’s clear that the Tories misinterpreted these reports.”
Hudak, however insisted his party’s calculations were sound.
“We strongly disagree with that interpretation. I think that the economics is straightforward,” he said. “Permanent reductions on taxes on job creators and on families mean permanent jobs.”
Tory officials later told reporters that they had used some data sources that dealt in person years of employment along with others that measured employment in different ways to come up with the jobs figures in their platform.
Hudak, meanwhile, tried to shift the focus on to his opponents, who he said were not being transparent about their plans for the province.
“We had two economists look at lower taxes on job creators and they came up with pretty much the same number,” said Hudak. “I’ll compare that to Andrea Horwath and the NDP, who think that taxes aren’t high enough, and I’ll also compare that with the fundamental dishonesty of the Liberals.”
Premier Kathleen Wynne was quick to pounce on the controversy, saying it was clear the Tories were “flat wrong” in their calculations.
“It’s exceedingly rare for a platform to be revealed as a complete and utter fiction because the leader got the math wrong. So that’s actually what we’re dealing with right now,” the Liberal leader said at a campaign stop in Markham, Ont.
“His plan won’t create jobs, it will cost jobs. And we have been saying this, but it’s very important that we recognize that the math, the arithmetic actually bears that out.”
NDP Leader Andrea Horwath also took a swipe at Hudak.
“I don’t think anybody can make heads nor tails of what Mr. Hudak is proposing. I mean, he says a million jobs, and then he’s going to throw 100,000 families to the curb,” she said, referring to the PC pledge to cut 10 per cent of the public sector if elected.
“I don’t know how he’s planning on getting there and that’s why I say I don’t think the plan makes sense.”
Wynne and Horwath’s similar attacks on Hudak came as the Liberals didn’t rule out teaming up with the New Democrats to form a government if the Progressive Conservatives win the most seats on June 12 but fall short of a majority.
Meanwhile, Christopher Worswick, an economics professor at Carleton University in Ottawa said it certainly seemed like the Tories were “double-counting” projected jobs numbers.
“Normally when economists think about a policy change and its impact on employment, it might take several years for the full effect to hit the labour market but I think you would consider the total number of jobs created over that period,” he said.
“You wouldn’t count them up per year, which it sounds like they’ve done.”
With the differences of opinion on all sides, voters might do better to focus on general policies rather than specific job projection numbers in party platforms, said one observer.
“Everyone is getting wrapped up on the size of their numbers, when really all the numbers are conflated,” said Eric Kam, an economics professor at Toronto’s Ryerson University who questioned hard job creation numbers in all parties’ platforms.
“What that is, is just going out to multiple consultants … until someone comes up with numbers that look good to you,” Kam said. “It’s absolutely cherry picking.”
—With files from Keith Leslie, Maria Babbage and Paola Loriggio