As mayor, George Smitherman says he would encourage youth employment by charging businesses to create a $10-million fund subsidizing companies that hire young people.
He would also oblige firms doing business with the city – including transit, Toronto Hydro and the police service – to hire youth.
But one economist cautioned that the stick portion of his carrot-and-stick approach – to charge companies more in order to subsidize business owners hiring young people – may hurt small business in the city more than it helps.
“Generally speaking, the best kind of environment we can have for youth employment is just a stronger economy, period,” said Doug Porter, deputy chief economist with BMO Nesbitt Burns.
“I’m not sure I’m totally in favour of a policy that is so targeted and directed towards one particular group, no matter how defensible that is.”
Mr. Smitherman’s youth-employment proposal would create an estimated 7,400 jobs a year, he said. Young workers have been hit disproportionately following the latest recession, which saw Ontario youth unemployment spike to more than 18 per cent late last year.
“The city of Toronto spends $11-billion a year,” he said after a roundtable discussion with teens and 20somethings at the Cabbagetown Youth Centre. “I’m going to make sure that it spends its money in a way that youth are given jobs.”
Mr. Smitherman’s plan would also include more youth employment in city-run recreation programs, and expanding existing youth training programs in city agencies. Contractors bidding for city tenders, such as the multi-billion-dollar city-wide transit project, would commit to providing training and jobs for young people.
Mr. Smitherman said the money to pay for that fund would come from commercial property taxes, but in tiny increments: An extra $70 on a $10,000 bill, for example.
“Any private-sector company, like a retail store on Parliament Street, would be given an incentive to hire youth. They’d be given some of the money back,” he said. “Others in the same tax class would be contributing towards that. It doesn’t cost the city money, but it does provide an incentive for businesses.”
But the Toronto Board of Trade, which has taken an active role in putting out policy papers on topics it would like mayoral candidates to address in the campaign, was leery of the proposal to bump up taxes that businesses already argue are too high.
“While finding solutions to youth unemployment is a worthy goal, increasing business property taxes is not the right way to support such a program or to increase employment,” said board spokesman Scott Brownrigg.
“The board and its members believe the commercial and industrial property-tax rates need to be more competitive throughout the region, which will allow the private sector to drive job growth and economic development.”
The unemployment rate for 15- to 24-year-olds in Ontario was at 16 per cent in July – down from a high in December of 18.5 per cent, but still well above the 13 per cent pre-recession levels.
While broad unemployment figures have been nowhere near historic highs, youth were hit especially hard during this recession: The 18.5-per-cent unemployment peak approaches the 1982 peak of 19.8 per cent.
But it’s challenging to address youth unemployment from the local level, Mr. Porter said. Many of these policies are in the hands of more senior levels of government.
