Government Operations Committee on Dec. 8th, 2009

[Paul Rochon]

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.

[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?

[Benoit Robidoux]

Approximately $16 billion.

[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?

[Benoit Robidoux]

That is a good question. I do not have the employment figures with me.

[Paul Rochon]

Would it be $1.2 million? No, it's more like $16 million.

[Benoit Robidoux]

To be honest, I'm not really sure where you are going with this.

[Serge Cardin, Bloc, Sherbrooke, QC]

What does a 6% increase represent in terms of jobs?

[Paul Rochon]

About 900,000 jobs.

[Benoit Robidoux]

However, that is a qualified answer.

[Serge Cardin, Bloc, Sherbrooke, QC]

Are you saying that a 1% increase in the GDP translates into 900,000 new jobs?

[Paul Rochon]

No, when the GDP increases by 1%, employment increases by 0.6%.

[Serge Cardin, Bloc, Sherbrooke, QC]

And 900,00 jobs are created?

[Benoit Robidoux]

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...

[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.

[The Chair, Liberal, Yasmin Ratansi]

Wrap up, s'il vous plaît.

[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.

[Benoit Robidoux]

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.

[The Chair, Liberal, Yasmin Ratansi]

Thank you.

We'll have Mr. Warkentin for five minutes.

[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.

[Yaprak Baltacioglu]

In terms of infrastructure stimulus fund, we have 3,226 projects valued at over $8 billion.

[Chris Warkentin, Conservative, Peace River, AB]

Is that $8 billion in terms of the federal component?

[Yaprak Baltacioglu]

No, that's together.

[Chris Warkentin, Conservative, Peace River, AB]

That's combined.

[Yaprak Baltacioglu]

That's combined. The federal share would $3.5 billion or $3.6 billion.