Thank you.
Mr. Chair, I think the way economists tend to look at austerity is very similar to the mirror image of the way we looked at stimulus. In the case of stimulus, when the government implemented a very large stimulus package in 2009 they used economic analysis, effectively what we called multipliers, to estimate what would be—if we had a stimulus package—the additional increase in output and in jobs. They calculated with a stimulus package in the neighbourhood of $50 billion that we could achieve an additional two percentage points to GDP and an additional couple of hundred thousand jobs.
In 2012, the government moved to freeze direct program spending effectively for five years. Direct program spending is in the neighbourhood of $115 billion to $120 billion. So we're effectively reducing spending by almost $15 billion over that period of time from what the trend growth rate was. Again, we're talking about loss overall since 2012 of probably something in the neighbourhood of one percentage point in terms of output and 100,000 jobs. This is taking place at a time when our economy is operating below potential. We have unemployment rates in the 7% range. We have capacity utilization rates in the 80% range. These are different rates from what existed prior to the recession. There are costs to austerity just as there were positive benefits to stimulus.