Mr. Chair, members of the committee, thank you very much for inviting Unifor to your hearings.
We agree with the supposition of the meeting that economic growth and job creation are the central goals and should be the central goals of a federal budget policy.
Unifor is Canada's largest trade union in the private sector of the economy. We represent over 300,000 members in over 20 different sectors. We were formed earlier this year through the merger of the former Canadian Auto Workers and the Communications, Energy and Paper Workers. I do want to recognize my colleague with me today, Dave Moffat, assistant to the president of Unifor and the top negotiator and official in charge of our energy, communications, and media sectors.
I must make one note regarding process. I know that in addition to these pre-budget hearings your committee is also investigating the current budget implementation bill, Bill C-4. Representatives from Unifor will appear before you next week to express our views on certain aspects of that legislation, but we do want to register as an organization our concerns regarding the process by which these budget omnibus bills, such as C-4, are being used to change far-flung pieces of legislation that have no direct relation to a budget bill. In our judgment, some of the issues tackled by your committee through the C-4 hearings should be considered more directly and fulsomely through a normal legislative process.
On the issue at hand about economic growth and job creation, we have a written submission that has been distributed. Let me briefly highlight four points from the written document, and I refer you to the document for more details.
First of all, in terms of the status of Canada's overall labour market, it is often claimed that our labour market has done very well, sometimes supported by discussion about absolute increase in employment or percentage growth in employment. That is not the best way to measure labour market performance either over time or across countries, for the simple reason that we also have to take into account growth in the working age population, which is the pool of workers who are available for those jobs. A better measure is the employment rate, which considers the level of employment relative to growth and labour in the working-age population, which is relatively rapid in Canada's case. We have one of the fastest rates of population growth in the developed world.
In that regard, I'll refer you to figure 1 at the end of our brief, which shows the evolution of the employment rate in Canada since the years before the recession to present. As the recession hit, the employment rate fell rapidly, by 2.5 percentage points of the working-age population. That was the most dramatic and rapid decline in the employment rate since the 1930s. With the initial stimulus effort, fiscal and monetary interventions and other measures, that recuperated in the first year and a half of the recovery by about half of a percentage point, or about one-fifth of the way back. What's very important to note, though, is that since late 2010, for three years now, there's been no increase in the employment rate at all, so from a jobs market perspective relative to our population growth, the recovery has completely stalled. This picture is in fact a perfect L. In regard to my colleague's presentation recently about an L-shaped recovery, this is a perfect L. The only reason the unemployment rate has declined gradually over the last three years is the decline in labour force participation, which is nothing to be proud of.
I'll also refer you to table 1 at the back of the brief, which compares Canada's performance in the employment rate to the other industrialized countries of the world. Again, if we adjust for the differential population growth rates in different countries, Canada does not rank at the top, or even near the top. We rank 20th out of 34 countries in terms of the change in the employment rate from 2008, when the recession hit, to 2012 most recently. This shows that the argument of our labour market problem being one of a mismatch between available workers and available jobs, or certainly a shortage of workers or even a shortage of skills workers, is quite misplaced. That is a misdiagnosis of the problem and could lead to incorrect policy responses, including some of the measures the federal government has taken clearly aimed at trying to push a labour supply, whether that's temporary migrants, or changes to the EI rules, or other measures. In fact, I would argue there are over 20 unemployed Canadians effectively for every available job vacancy.
The general thrust of fiscal policy should be to address the main problem in the job market, which is a lack of jobs. So it's job creation and an expansionary program, and we have five dimensions of that written in the brief. In general, I think the continued emphasis on fiscal austerity, which has been indicated by the finance minister, is quite misplaced. We will balance the budget a year early; we will underspend our budgets in several key areas; and then we will further decline program spending relative to GDP in the years even after a balanced budget.
That is a very hollow victory at a moment when over two million Canadians are effectively unemployed. I think the continuing decline in program spending as a share of GDP after the balanced budget has been attained will reduce our GDP growth by up to half a point of GDP a year. I think that continuing austerity is both unnecessary and counterproductive.
Thank you for having us.