Fewer jobs, less growth

What budget cuts mean for the economy

While the Finance Minister will table the first budget implementation act of the year later today, the Parliamentary Budget Officer has released a new report on the impact of this year’s budget.

The PBO’s latest estimates on the impact of the 2013 budget handed down in March show the cumulative impact will be to reduce economic growth by 0.12 per cent and job creation by 14,000 by 2016. Combining the latest budget measures with the cutbacks unveiled in 2012 means there will be 62,000 fewer jobs in 2016, rising to 67,000 fewer in 2017, than might otherwise be the case without the cuts.

The PBO cautions the estimates do not mean the cutbacks will result in a loss of jobs, but that employment will be lower than it might have been absent the measures. In economic speak, that means that government spending will act as a drag on economic growth, rather than a stimulus.

The full report is here. At last report, the Harper government had directly cut nearly 11,000 jobs from the public service.

Rest assured that however much smaller the government is made as a result of these cuts, there will still be someone on hand to make sure Laura Secord’s attire is appropriately depicted.