Conservative alarmism over jobs data is either dishonest or delusional

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Last Friday morning, Statistics Canada greeted the country with a monthly employment report that, by any reasonable assessment, was good news.

Jobs increased by a modest but healthy 31,000 in October, adding to September’s surge of 157,000 jobs. The unemployment rate fell to 6.7 per cent, the lowest since the pandemic began. Full-time employment accounted for all the gains. Private-sector hiring rose by 70,000. Hours worked were up. Wages were up.

But to hear the Conservative opposition’s spin, this was all very bad news indeed. It was smoking-gun evidence of economic mismanagement at its worst.

“Today’s report by Statistics Canada makes it clear that Justin Trudeau is failing to create jobs, our economy is shrinking, and inflation is running at an 18-year high of 4.4 per cent,” Conservative Leader Erin O’Toole said in a statement issued by the party shortly after the jobs report came out.

‘A remarkable milestone’: Canadian employment jumps back to prepandemic levels

Just to make sure you got the message, Mr. O’Toole repeated it twice more in the same news release: We have “bad,” “poor” job growth; a “shrinking” economy; and “skyrocketing” inflation.

This degree of hyperventilation has become pretty routine in Conservative news releases on economic matters. It is either dishonest or delusional. Neither of which is a good look for any party with aspirations of returning to power, let alone one that likes to frame itself as the country’s only choice for sound and responsible economic policy.

Let’s measure Mr. O’Toole’s statement against the data, shall we?

Canadian employment has grown for five consecutive months, adding 600,000 jobs in that time. As of September, total employment has exceeded the level prior to the pandemic – at a time when our neighbours in the United States are still 3 per cent short of their prepandemic count. Canada’s labour force participation rate – the share of the adult population either working or actively seeking work – has also returned to prepandemic levels, which, again, is far ahead of the U.S. labour recovery.

The breakneck pace of this year’s economic recovery has cooled a bit lately in the face of the Delta variant, but real gross domestic product still grew by a solid 0.4 per cent in August (the most recent data published by Statistics Canada), and most economists estimate that it expanded at an annualized pace north of 3 per cent in the third quarter. It looks on track for 2021 full-year growth of something approaching 5 per cent – which would make this the fastest-growing year for the economy in 14 years. That fits no one’s definition of “shrinking.”

At least Mr. O’Toole has quoted the inflation numbers accurately – and yes, they’re running uncomfortably hot by modern standards, though “skyrocketing” is a bit of hyperbole. (As recently as 2011, the inflation rate exceeded 3 per cent for much of the year – again, in the midst of a rebound from a deep global recession.)

One could reasonably argue that the Liberal government’s fiscal policies have juiced that recovery, adding fuel to the rapid growth that has accelerated inflation. But it’s hard to argue that the government has both stagnated employment and growth and, in doing so, fed inflation. It defies logic, and the evidence.

The Conservatives have some legitimate economic concerns to voice. Inflation is a vexing and increasingly problematic global riddle that has emerged from this recovery, and it deserves serious scrutiny from policy makers. Fiscal policy is still highly stimulative and the federal deficit is still large, without a lot of clear answers from the recently re-elected Liberal government on how it will rein in and redirect its resources to adapt to the fast-changing economic landscape. There are important questions to be addressed around such issues as skills shortages and housing affordability.

And it’s not as if the Liberals have never spun employment numbers for their own political gain. They have refrained from doing so lately, but during the September election campaign they loudly and repeatedly took credit for the strong jobs recovery after last year’s deep losses – even if the vast bulk of those jobs would have come back with the end of lockdowns, with or without Liberal policies.

Still, Mr. O’Toole’s Conservatives seem irrationally committed to distortion and misdirection, to practising the politics of fear over facts. It’s unclear if anyone benefits – least of all the Conservatives themselves. They just ran an election campaign this way, and ended up with fewer seats and a smaller share of the popular vote than they did in the 2019 election.

There is one thing that Mr. O’Toole was absolutely right about in Friday’s news release: his criticism of the government for its inexcusable foot-dragging on reconvening Parliament after the election. We are at a delicate point in the recovery, and the issues at hand warrant full and honest airing in the House of Commons.

But based on the tone of Friday’s Conservative news release and others before it, it’s hard to imagine we’d get anything resembling that.

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