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Job numbers proof no election needed: Flaherty
 
 
September 4, 2009 


'What we see now is certainly evidence of stabilization,' Finance 
Minister Jim Flaherty told reporters in London, England, ahead of a 
meeting with G20 finance ministers. 'The unemployment number today is 
relatively stable.'
 

OTTAWA � Canada's economy created more than 27,000 jobs in August, 
surprising forecasters who thought thousands would be lost.

Federal Conservatives believe the numbers weaken the case opposition 
politicians have been making for a fall election.

By contrast, the U.S. employment picture continues to worsen as more 
than 216,000 jobs were lost there last month.

"While we can quibble about the details, the broader picture here is 
that the labour market is stabilizing, and apparently much faster than 
in the U.S.," said Douglas Porter, deputy chief economist at BMO 
Capital Markets.

Those two bits of data could help Conservatives make the point that the 
Canadian economy, under their stewardship, has outperformed its G8 
peers through this recession.

"What we see now is certainly evidence of stabilization," Finance 
Minister Jim Flaherty told reporters in London, England, ahead of a 
meeting with G20 finance ministers.

"The unemployment number today is relatively stable," he said.

"But you know, the unemployment rate in Canada right now is 8.7 per 
cent. (Though) that's the highest unemployment rate in 10 years, it's 
about a full percentage point lower than the unemployment rate in the 
United States, which is unusual in terms of our trading relationship 
with the United States. That hasn't happened, I believe, in about a 
generation," Flaherty added.

"We have created a very large economic recovery plan. It is working," 
Flaherty continued.

"But I say that in the present tense. And it needs to continue to work 
to ensure that we don't slide back into recession. So this is a time, 
it seems to me, where Canadians expect us to focus on the economy. What 
the government should be doing is focusing on that, it seems to me, and 
not on having an annual federal election in Canada."

Liberals said that despite the mild improvement in the monthly job 
numbers, there are still more than 400,000 Canadians who had a job when 
ballots were cast last October that do not have a job now.

"I think the economy is still struggling," Liberal Leader Michael 
Ignatieff told reporters in Vancouver. "A million and a half Canadians 
are looking for work. Bankruptcies are up. And we're staggering along 
with a $50 billion deficit. Our view is that this just isn't good 
enough and we can do better."

The national unemployment rate in August edged up to 8.8 per cent from 
8.7 per cent in July, the result of more people coming into the 
workforce. The unemployment rate among students and young people hit 
16.4 per cent in August, an all-time high.

Still, improving job numbers have positive implications for the federal 
treasury.

The most recent deficit forecast from the Department of Finance for 
this year is just over $50 billion.

But if more Canadians are working and paying taxes � and fewer are 
drawing on unemployment insurance � then the deficit could be lower. 
Flaherty said he is considering issuing an update of that deficit 
forecast later this month.

Forecasting firm Global Insight, one of a group of private-sector 
forecasters on which the government relies, said Friday that the 
deficit should be smaller than $50 billion this year, though it will be 
significantly larger than Flaherty's original forecast next year. The 
government believes the deficit next year will $29.8 billion. Global 
Foresight now predicts it will be $39 billion.

All of August's gains came as a result of new part-time jobs, normally 
a sign of a weak labour market. The economy lost about 3,000 full-time 
jobs last month but managed to add 30,600 part-time jobs.

"It's all part-time work. It's just people trying to survive," said NDP 
MP Yvon Godin.

Forecasters, though, had not expected any kind of increases in job 
numbers until the new year.

"Half a loaf, or in this case, half a job, is better than none, so an 
increase in Canadian employment driven by part-time work is still an 
encouraging signpost of an economic recovery now underway," said CIBC 
World Markets chief economist Avery Shenfeld.

Economists also noted it was an encouraging sign that the job gains 
came from the private sector, the first time in 10 months that 
employers increased the number of people on their payrolls.

Economists said that August's job numbers help shore up a growing 
consensus among forecasters that the gross domestic product � the sum 
of all economic activity in the country � will be positive this 
quarter, which ends on Sept. 30. That positive change in economic 
activity is likely to be another point Conservative politicians will 
feature in speeches this fall.