Forget big data. Canada needs good data.
The middle class is doing great, or maybe it’s not.
Is the country becoming more unequal, or less?
Job vacancies are falling, but employers insist they can’t find workers.
These are just a few of the critical areas where key information is missing, incomplete or contradictory.
Canada has a serious data deficit. And the dearth of facts threatens to cause a host of policy mistakes, affecting everything from who gets unemployment benefits, to where governments spend their limited training dollars and whether employers can import foreign workers.
Last week, federal Auditor-General Michael Ferguson warned the government that Statistics Canada has huge gaps in its data on job vacancies across the country. It knows when a province is experiencing labour shortages, but not precisely where labour is needed within regions, or what specific skills are in demand.
“In Canada, we don’t have reliable information about labour shortages at the very local, occupational level,” said Dominique Gross, a professor of public policy at Simon Fraser University in Vancouver and an expert on the temporary foreign worker program. “It’s impossible to know where the shortages really exists, and therefore which employers can legitimately hire temporary foreign workers and not cheat on the program.”
Prof. Gross acknowledged that perfect data is “very costly.”
So is bad data.
Employment Minister Jason Kenney recently imposed a moratorium on the use of temporary foreign workers in the restaurant industry, following embarrassing allegations of misuse by some McDonald’s franchise and other employers. And he has promised more reforms to come.
But who is to say that restaurants need imported foreign labour any less than hotels or coal mines, which are unaffected by the moratorium? And without better information, Mr. Kenney may compound his earlier decision to expand the program with an equally ill-considered move to shrink it.
The government’s troubles with the temporary foreign workers program is a classic case of bad data leading to dubious decision-making. Until recently, the government has relied on inflated Finance department job vacancy data, compiled in part by tracking job postings on Kijiji, a free classified-ad website. Statscan, meanwhile, was reporting that the national job vacancy rate was much smaller, and falling.
The problem goes way beyond temporary foreign workers. And it’s a data problem of the government’s own making. Ottawa has cut funds from important labour market research, slashed Statscan’s budget more savagely than many other departments, and scrapped a mandatory national census in favour of a less-accurate voluntary survey.
The Canadian government has demonstrated “a lack of commitment” to evidence-based decision-making and producing high-quality data, according to a global report on governance released last week by the Bertelsmann Foundation, a leading German think tank. The report ranked Canada in the middle of the pack and sliding on key measures of good governance compared with 40 other developed countries.
CIBC World Markets economist Benjamin Tal worried in a recent report that missing data about the housing market – including how much equity Canadians have in their homes, and the share of foreign investors in the condo market – could cause regulators and investors to make bad decisions.
There are similar gaps in what we know about inequality in Canada. A New York Times report last month said the median income in Canada has surpassed the United States and is now among the highest in the world. The analysis, based on data from Luxembourg-based LIS, seemed to debunk the more common narrative that Canada’s middle-class is falling behind as income is increasingly concentrated in the hands of the ultra-rich.
The picture is, of course, far more nuanced. Median household incomes have grown for most of the past 15 years in Canada, but not nearly as fast as they have for the top earners, whose share of income has grown more quickly than in most other developed countries. There has also been a hollowing out of the middle class, with the number of middle-income families shrinking since mid-1990s, while the share of people at the top and bottom extremes has grown.
What has happened since the recession is unclear – a knowledge gap that could affect policy decisions on everything from education and health care to tax rates.
Good policy depends on accurate data. Without it we’re all flying blind.