Checking the math on Tim Hudak’s million jobs plan

Paul Boothe on lessons from the PC platform and where it all went so wrong

PC leader Tim Hudak in conversation with Paul Wells at Third Floor York in Ottawa May 22, 2014.  Photo by Blair Gable

PC Leader Tim Hudak in Ottawa on May 22, 2014. (Photo by Blair Gable)

A very surprising and, for voters, unfortunate thing became apparent last week in the Ontario election campaign. The Progressive Conservatives’ central campaign proposal, the million jobs plan, collapsed when analysts looked closely at the math. Elementary, but critical arithmetic errors in their calculations resulted in the Progressive Conservatives vastly overestimating the number of jobs their plan would create. These errors demolished the underlying economic rationale the party had put forward for its smaller-government, lower-tax plan.

Partisans of the Liberals and New Democrats may take pleasure in the collapse of their opponents’ platform. However, voters should not. What appeared to be an election with a clear choice between two visions of the future role of Ontario’s public sector has reverted to a discussion of the credibility of leaders. Lacking a sensible alternative, the role of government cannot be a matter of serious debate.

Given the devastating effect these errors had on the Progressive Conservative platform and thus the character of the election debate, it is worth spending some time understanding the errors clearly and drawing some lessons to help avoid similar mistakes in the future.

What were the errors? Based on a backgrounder distributed by the Progressive Conservatives to journalists, but not posted on their website, it is clear that the planners confused person-years of employment with permanent jobs. This confusion led them to vastly overestimate the effect of their proposed job-creating measures. The result was that the half million jobs the Progressive Conservatives were promising to create with their plan (base-case economic growth was expected to provide the other half-million jobs) was really only about 75,000—fewer than the 100,000 public-sector jobs they were pledging to eliminate.

The errors were first identified by David Reevely in the Ottawa Citizen and were subsequently analyzed in detail in online articles written by prominent labour economist Jim Stanford. The Liberal party also released an analysis of the plan that identified the errors. The Progressive Conservative response to the Liberals’ analysis completely missed the point, suggesting their planners still did not understand the fundamental errors they had made.

What lessons should political parties draw from this unfortunate turn of events? First, it underlines the dangers of political leaders pledging to create jobs. The private sector is the engine of job creation and it is subject to many more forces than just tax and regulatory changes. Governments play, at best, a supporting role.

Second, it is a mistake to get different organizations to work on different elements of your plan and then combine them. I am sure that if the Conference Board had been asked to simulate the impacts of the full Progressive Conservative platform, instead of just the tax cuts, these elementary errors in the analysis would not have occurred.

Third, parties should be as transparent as possible in providing background information on their plan to the public. If economists had seen the backgrounder that was provided to journalists, they would have known right away that the plan was confusing person-years of employment with jobs. While it would not have solved the problem, it would have given the Progressive Conservatives more time to recover from it.

Fourth, building suspense with a big release of a new platform during an election campaign has serious risks. It may make it harder for other parties to copy or criticize ideas, but it makes it easier to miss critical errors. It’s much better (as professors routinely do) to give ideas lots of exposure to ensure that they stand up to the kind of scrutiny they may get during an election campaign.

Finally, a lesson for voters. When political parties come calling at election time, check the math.

Paul Boothe is professor and director of the Lawrence Centre at Western University’s Ivey Business School. Formerly, he served as deputy finance minister of Saskatchewan and federal associate deputy minister of finance.


Checking the math on Tim Hudak’s million jobs plan

  1. Even more importantly, they haven’t identified the jobs they’ll cut and they’ve made some boneheaded statements that give the impression they want to cut things they can’t.

    And there really isn’t a need to debate the role of government in broader society. The 3 major parties are vastly more similar than a left-centre-right analysis would portray them as. Our society isn’t having full throated arguments about where we land on the political spectrum, we’re haggling over details.

  2. Hopeless Hudak. After 3 Lib terms this should have been a cakewalk, but nooooo

  3. Use temporary foreign workers, from developing countries with high employment, and only allow them to come to Canada for a year max.

    Then person-years = jobs.

  4. Why does Hudak look like “Kermit the Frog’s” older brother?

    • Look again – think Beetlejuice…

    • A lot of people are noticing a similarity with Mr. Bean as well.

  5. Dysfunctionality, is NOT a mathematical problem, it’s only a problem for Tim.

  6. It was pretty obvious from the outset that the numbers were ridiculously high, just from common sense alone.

    Tim should have been replaced after the last election; as much as many of us want to see the Liberals ousted this time, Hudak just doesn’t seem a credible option. A Conservative win SHOULD have been a cakewalk – and likely would have been, under a different leader.

    • Oh I dunno – while I agree that Hudak is a millstone for the PC party, I don’t see any reason why an alternate leader would have anything better to offer on the policy front. A leader could never have proposed something as extreme as “right to work” legislation without broad support from the party.

      I never believed the million jobs promise, but this is the first I’ve heard that it’s been so specifically debunked. I wish there were a link to that debunking in this article, but I’ll go find it now.

  7. Rats! It sounded too good to be true, but it is still a good idea to decimate the Ontario bureaucracy, then do it again, teaching assistants included.

    • Ontario along with PC Alberta has the lowest number of government workers per capita of all the provinces in Canada. Cutting the civil service means either cuts to services, handing service provision to private companies which does not necessarily translate to jobs in Ontario or even Canada but which is still a cost to the taxpayers or dumping them down on the municipalities which will have to get the money to run them from the taxpayers.

      In Ontario every child is entitled to an education regardless of his or her physical disability, developmental delay or emotional need. Teaching assistants are primarily used to care for and assist these children with special needs who often require one-to-one attention. Without a TA in a classroom, the teacher would have to choose between neglecting the child with special needs to get on with teaching the rest of the class or vice versa. Neither of which is acceptable.

      • Sounds reasonable, except since Ontario has the largest population we also have the most bureaucrats (as an absolute number) and where you have a lot of bureaucrats they tend to service themselves not the public. They’ll invent a lot of spinning wheels that go nowhere just so some manager and their directors can reap more resources, self-esteem and higher salaries. I’ve been a bureaucrat and most of my time wasted then was spent on pecking order (I was going to use another word) contests at the behest of my superiors. Entire branches of government can be eliminated and the public will never suffer nor notice.

        It is the tragedy of all species that not all can keep up. It is even worse when the gifted are not inclined to use their gifts. Entitlement is a meaningless abstraction, you can lead a horse to water but you cannot make it drink. Children learn on their own and their motivation is the only tool a “talented” teacher has. Sadly, it was my experience in my journey through the system (grade school past university) that most teachers are not talented therefore the additional cost of a TA is waste.

        • Of course there’s waste in government, just as there is in every organization including private companies and individual bureaucrats are no different than others, including politicians when it comes to empire building. Human nature is what it is. When it comes to budgeting, politicians are the worst offenders as they boost those branches of government that serve their parties agenda and cut those that don’t, despite the needs of the public and while pretending to serve the public need. Read the article on the Harper cuts to Stats Canada and it not the only department that has been affected. We all rely directly and indirectly on government services, so which branches on which you or your family rely are you willing to relinquish?

          For sure not all of a species “can keep up” but who will judge which ones can or can’t without providing the opportunity to all or have we now reverted to the law of the jungle. Motivation and inspiration come from many internal and external sources so to suggest that teachers are responsible for both is pure folly. Just because you never felt inspired or motivated by the teachers you had doesn’t mean that others weren’t. No one can be all things to all people including you.

          As I was also educated from kindergarten through university in Ontario, I appreciate that past generations through their tax dollars, made it possible for me to have the best education available at that time. It was then and still is my turn to do the same for those who come after me, whether they’re my children or not and including those with special needs.

  8. Is there a term for pleasure derived from watching Tim Hudak fail? I know there’s schadenfreude, and then schadenFORD for Rob Ford, but is there one for Hudak? Any input would be helpful. Thanks in advance.

  9. Are Conservative math skills why business is so keen on temporary foreign workers

  10. What proof is there that this “error” was not an error but a fudge?

  11. A major fubar on the Conservative’s part – they need to quickly review their jobs plans and come clean if there was such a significant error in mistaking man-years of work for full-time job equivalents when making their calculations.

    Learn from the Liberals – they presumably calculated in some manner that it would only cost $40 million to cancel the Mississauga and Oakville gas-fired generating plants and then stated this publically. The subsequent review by Ontario’s Auditor General states that cancellation costs will be between $1.1 and $1.2 billion.

    The Conservatives jobs creation numbers were off by 13.33X, but cost figures that Ontario’s electricity users will be paying off over the next 20 years was under estimated by 28.75X.

    The Liberals then tried to make their error go away; covering their tracks by deleting the evidence of who knew what and when about the decision – destruction of records in violation of the government’s own records retention policies resorting to an outside expert to wipe the hard drives of emails and documents, the public was served up a political smoke screen of denial and efforts to change the subject. Ultimately the OPP launched a criminal investigation which is still ongoing, but no matter how it ends Ontarians are stuck with paying over $1 billion for nothing.

    Tim Hudak has precious little time to convince voters that he’s a big enough man to admit his mistakes and recover from them in a way that benefits Ontarians.

  12. The problem with this bad math issue is that it just confirms to many of us what we have believed about Hudak for years; namely that he’s reckless & completely ideology based. I’ll vote for someone who provides a credible cost cutting policy but not for someone whose simply going to cut, slash & burn with his fingers crossed.

  13. Since this entire 1 million job claim is so fabricated and so untrue, why do they continue to use them in ads and in propaganda?

    This is FRAUD, pure and simple, to the same level of Bre-X. They are saying the most blatant lie to get money from the base and try to be elected. Someone should bring the PC Party to Court.

  14. I hope that everyone knew from the start that this MILLION jobs plan was impossible. Employers are not going to hire just because of a tax break, they hire because they have enough work to justify more employees. Ontario needs to go forward not keep looking back at what we once had. He cannot create jobs – he can only listen to what businesses need and try and help with government programs and incentives. What happened to the phantom “Economic Action Plan” that was created by the Conservatives! The Conservatives spent more on advertising that program on TV than the Liberal’s did on the sponsorship scandal. Remember Tim is a descendant of Harris and we never want to go back to that kind of life again. NDP have shown to be disorganized. I’m sticking with Wynn – I think she is NOT a ‘yes’ person like Dalton was. It will take her time, but I believe she can bail us out without having to disrupt our lives as much as the Conservatives will.

  15. Reality is no governemtn can create jobs at all, but they can inefficiently consume other peoples money (and debt to the unborn’s futures) to buy jobs.

    In as simple terms as I can make it, tax me more to buy a consumption job, then I will spend less on someone else’s job and we will all have a lower standard of living for the waste.

    Tax companies more, they pay people less. Tax people more, they spend less on each others jobs to fund purely consumptive government bloat.

    Government is about consumption of other peoples money, and if they taxed less, we would have more money to spend. Hey, its more job value for me to spend $30,000 on a upgraded kitchen employing productive people than to send it to government and society gets no value for the bailouts and wastes.

    REAL jobs are driven from AFFORDABLE exchange of goods and services. What has governemtn done to make it affordable besides take a lot of our money for nothing of durable value in return?

    All this tax greed too. Isn’t that minimum wage is too low, its that after tax, tax as inflation, hidden tax/protectionism tariffs, cause our wage needs to be inflated to uncompetitive levels with our inflated costs of living. $10/hr in 85% of this world is a great wage…. but in Canada its taxable poverty.

    But hey, government loves the PR illusions like this as they can have statism tax you more and more and more and get your economic liberty taken from you. The idea is to make big bloated governments look far more important than they really are. Its why government can’t solve the jobs and economic issues, as their unproductive bloat is the problem.

  16. While China built the Yanze Dam for cheap, clean renewal hydro power, to be more competitive, Ontario and Ottawa bailed out corrupt auto and unions for uncommon good and now have higher prices for everything including hydro to be even else’s competitive.

    Hidden, protectionism and income taxes so high we need uncompetitive wages to be able to afford to live in Canada…and that uncompetitive position means less jobs.

    Governemtn tax’em more to buy jobs means the taxed will have less money to spend on each others jobs, so +1 – 1 = 0 net jobs and a lower standard of living to support governemtn waste.

    Jobs are driven from affordable exchange of goods and services. Its a huge myth that in the big picture that governemtn can create jobs, reality is government is about consumption and redistribution of wealth.

    But those pushing statism tax greed on you like slaves, they need false illusions so you keep on supporting the government bloat for unions, politicians and lobbyists to live well on our wallets.

    • The governments did not bail out the auto industry for the “unions”. If they hadn’t invested in it, the economy would have taken too big a hit which would have driven Canada into a much deeper recession. Canadians make 20% of the cars for big three auto makers in North America which is twice the proportion of its population to the US. What does bailing out the auto industry have to do with higher prices on everything, including hydro?

      It’s rather amusing that you complain about government interference in the Canadian economy but praise China. Apparently you’re unaware that the government controls every aspect of the Chinese economy. BTW If the government is taxing Canadians to “buy” jobs, what the difference between that and Canadians spending those dollars to to create jobs? As well, for our tax dollars, Canadians receive services such as healthcare, roads to drive on, airports, clean water, safe food, safe working conditions etc. Maybe you would prefer to live in China without any of these services and protections.

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