MORRISBURG â€” During the federal election campaign, the Liberals are touting in their platform that spending on infrastructure is a method to create jobs. While technically accurate, that jobs are created, they are not the kind of jobs needed for long term growth and stability in the Canadian economy.
Setting aside the â€œKeynesian economic theoryâ€ that the progressives like to champion, for a moment, consider what job creation is. According to statisticians, job creation is a new position that did not exist before, in that specific period of time for recording. In other words, a new job created in that specific year. To the person hired for a new job, it is a job, for them, for as long as they can have it. Most people, when hired for a new job, hope to retain that job long-term. Statisticians do not measure job retention, year over year, the same way a regular person does.Â This is the fundamental flaw with using infrastructure spending to create jobs.
A construction project under an infrastructure spending program lasts only so long; there is a start date and an end date, once completed the job is over. The person who filled one of the jobs for that project is then out of a job, unless there is another infrastructure job available to the company. But then that job also has a finite timeline to completion. To the worker, that is not long-term employment. It is not stable employment. To the statistician and politician, it is job creation.
The other flaw with infrastructure spending is that it employs only a select portion of workers. Spending billions on infrastructure on building new transit, roads, and bridges sounds good for the trades, but it does not help the Information Technology workers displaced when their jobs were outsourced overseas. Nor does it help nurses who are laid off due to cutbacks at the local hospital. Nor does it help food service workers when the restaurant they work for closes down. Under the â€œKeynesianâ€ theory, the infrastructure workers would spend their pay, stimulating the economy and creating jobs â€” the trickle down effect. Theory is not reality. It would take a lot of infrastructure work to cause that and the Liberal plan is not enough in that case.
While some would argue that unemployed or under-employed workers in one sector could retrain to work in another, that takes years to do; up to five years in some of the building trades. By then the infrastructure program is over, the projects are done, and the economy has more unemployed or under-employed workers than before. Yet another problem to deal with.
The other issue with infrastructure-based job creation is the lack of equality between the provinces. A bridge project in Ontario might be won by a Quebec-based company using Quebec-based employees, while there is a high rate of local trades who would get shut out. Meanwhile Ontario-based companies winning contracts in Quebec would have to employ Quebec-based workers because there is no agreement for free-and-fair movement of trade-based employees across provincial boundaries. Ontario allows outside trades, Quebec does not. These imbalances exist in other provinces as well.
Meaningful job creation means creating full-time, long-term employment. Long-term employment leads to stability for the worker and their family, and the ability to plan purchases, make purchases and grow the economy in a sustainable way. Job creation must be fair and equitable to all sectors of the economy, not favouring one sector over another. The best way to do this, is with taxation rates that are competitive, free trade between the provinces, and government-based programs that do not play one sector against the other. Creating jobs using infrastructure spending is not a good way to create jobs.