Evidence of meeting #46 for Government Operations and Estimates in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was impact.
A recording is available from Parliament.
4:15 p.m.
Senior Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
To date, 97% of the funding has been committed. We estimate that approximately 70% of the overall figure has been committed to projects now under way.
4:15 p.m.
Bloc
Serge Cardin Bloc Sherbrooke, QC
In your opinion, does the same ratio still apply? I was an accountant in a previous life and as I recall, $100,000 in earnings corresponds to roughly one job created. That was more or less the ratio we worked with. Therefore, $27 billion would translate into 270,000 jobs, more or less, that could be created. At least we hope that's the case.
You quote a figure of 220,000 jobs. As I see it, a 1% increase in the GDP translates into a 6% increase in employment.
In dollar terms, what does a 1% increase in Canada's GDP represent?
4:20 p.m.
General Director, Economic and Fiscal Policy Branch, Department of Finance
Approximately $16 billion.
4:20 p.m.
Bloc
Serge Cardin Bloc Sherbrooke, QC
That means that for every $16 billion, nearly 160,000 are created.
In terms of numbers, what does 6% of employment represent?
4:20 p.m.
General Director, Economic and Fiscal Policy Branch, Department of Finance
That is a good question. I do not have the employment figures with me.
4:20 p.m.
Senior Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
Would it be $1.2 million? No, it's more like $16 million.
4:20 p.m.
General Director, Economic and Fiscal Policy Branch, Department of Finance
To be honest, I'm not really sure where you are going with this.
4:20 p.m.
Senior Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
About 900,000 jobs.
4:20 p.m.
General Director, Economic and Fiscal Policy Branch, Department of Finance
However, that is a qualified answer.
4:20 p.m.
Bloc
Serge Cardin Bloc Sherbrooke, QC
Are you saying that a 1% increase in the GDP translates into 900,000 new jobs?
4:20 p.m.
Senior Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
No, when the GDP increases by 1%, employment increases by 0.6%.
4:20 p.m.
General Director, Economic and Fiscal Policy Branch, Department of Finance
Precisely. One per cent of the GDP is equivalent to $16 billion. So then, when the GDP increases by $16 billion, employment rises by 0.6%. The employment base seems to be $16.8 million.
So then, if someone wants to calculate 0.6% of $16 million, they will come up with a figure that represent the increase in employment corresponding to 1% of the GDP. That figure is consistent with the 220,000 jobs. All I'm afraid of is that...
4:20 p.m.
Bloc
Serge Cardin Bloc Sherbrooke, QC
That's all I wanted to verify, to see if the figures jibed. All that to say that we are still off by quite a lot—by about 50,000 jobs— in terms of the number of jobs that could have been created or saved.
That is why I asked you if all of the funds had been spent. This would show the impact of not committing all of the funds. It is all well and good for the government to say that it is committing the funds, but that doesn't mean that a person has actually been hired for a job.
4:20 p.m.
Bloc
Serge Cardin Bloc Sherbrooke, QC
All right.
Would the shortfall in terms of the number of jobs created be due to the fact that some infrastructure money did not go to Quebec? Furthermore, certain projects will not be carried out because the cut-off date is January 29 and more time would be needed.
4:20 p.m.
General Director, Economic and Fiscal Policy Branch, Department of Finance
One of the reasons why the growth in output precedes the growth in employment is that in our model, there is a time lag between the two. The impact of the 0.6 % increase is seen anywhere from four to six quarters after the increase in output. This is an additional element of caution that we added to the model. We rejected the hypothesis that employment increases just as quickly as output.
The increase in production or output must be sustained in order for employment to increase. There is therefore a certain time lag. If we do the calculations, we see that if the funds are fully committed, the overall impact on output would be noticeable, but not the impact on employment. That would be discernible later. If I understand your question correctly, this time lag could explain the difference to which you alluded.
4:20 p.m.
Liberal
4:20 p.m.
Conservative
Chris Warkentin Conservative Peace River, AB
Thank you, Madam Chair.
Thank you for coming in this afternoon. We appreciate this testimony.
I agree with Mr. Martin insofar as he was contemplating the fact that we may, as a committee, be trying to pass judgment a little early on something that is still moving forward. So we understand we're probably working prematurely on some of this. But what we're looking for, as a committee, is kind of where we're at, and if we're doing the right things, and if there's something this committee can recommend be done differently.
We're getting a sense from all indications, from the media and from people on the ground, that things are moving well and that there are communities benefiting across the country.
Madam Baltacioglu, I wonder if you would help this committee understand exactly the value of the projects that have been announced, the value of the projects that have been given the green light in the country today in terms of the federal component, but then also the value when matched funding is included in that. I wonder if you could tell us, just from transport's side, what the value would be of the projects that have been announced and given the green light through the stimulus funds and through the different funds coming out of the most recent budget.
4:25 p.m.
Deputy Minister, Office of the Deputy Head, Infrastructure Canada
In terms of infrastructure stimulus fund, we have 3,226 projects valued at over $8 billion.
4:25 p.m.
Conservative
4:25 p.m.
Deputy Minister, Office of the Deputy Head, Infrastructure Canada
No, that's together.
4:25 p.m.
Deputy Minister, Office of the Deputy Head, Infrastructure Canada
That's combined. The federal share would $3.5 billion or $3.6 billion.
