Home
 
Choose Your City
Change City

Stimulus funds forget high jobless areas

OTTAWA - Canada's high jobless regions are losing out as billions in federal stimulus money flows into areas that have been spared the worst of the recession, an analysis by The Canadian Press suggests.

OTTAWA - Canada's high jobless regions are losing out as billions in federal stimulus money flows into areas that have been spared the worst of the recession, an analysis by The Canadian Press suggests.

In six provinces, areas that benefit most from stimulus spending actually have unemployment rates well below the provincial average.

Stimulus dollars for British Columbia, Alberta, Saskatchewan, Quebec, New Brunswick and Nova Scotia have been poured into regions where workers have been faring comparatively well.

In three other provinces, Manitoba, Newfoundland and Labrador and Ontario, the stimulus winners do have higher-than-average unemployment - but the favoured regions are still not the very highest in the province when it comes to jobless rates.

(Prince Edward Island has only one economic region, based on a standard Statistics Canada economic map, so comparisons within the province can't be made.)

And the area that has seen Canada's most serious deterioration in employment - the Cariboo region in the B.C. Interior - has seen no special treatment from the federal stimulus plan.

"We need to look at creating jobs. And I don't see that happening," said Robert Leclerc, president of the Quesnel and District Labour Council, in the Cariboo.

"I feel sorry for the pulp mill workers. Who knows what they're going to do?"

Mills in the region have been cutting back or shutting down completely, Leclerc said, and there are more large job cuts pending.

The aim of the federal stimulus program was to "support economic growth and employment this year and next while also bolstering Canada's long-run productive capacity," Finance Minister Jim Flaherty said in introducing last January's stimulus budget.

With the government investing and spending across the country, all parts of the economy will benefit from the spinoffs, said Chris Day, spokesman for Transport Minister John Baird.

"The entire country has been affected by the global economic recession."

There is no easy way to account for jobs created by the $16-billion spending program. Unlike in the United States, Canadian officials did not ask funding recipients to provide information on job creation. Instead, Ottawa relies on a macro-economic formula to estimate how much employment should result.

To determine whether stimulus money has been flowing to areas struggling to deal with the recession, The Canadian Press crunched its own numbers to link spending to unemployment rates.

The analysis follows a similar but separate Canadian Press study that found the stimulus money was heavily biased in favour of Conservative ridings.

The jobs results were obtained by aligning the government's stimulus spending to the economic regions Statistics Canada uses to measure unemployment.

The analysis was based on an interactive online map the federal government maintains to plot the details of more than 4,500 projects funded through 42 stimulus programs. The study took all the map's projects as of Nov. 3, and followed instructions attached to the map to pinpoint locations for each project.

The government's details on the projects do not include exact spending amounts; rather, they give a range. In order to add up the amount of stimulus for each economic region, The Canadian Press analysis used a point system based on economic heft.

The study gave one point to small projects, worth less than $100,000; five points to projects worth between $100,000 and $1 million; 30 points to projects between $1 million and $5 million; and 50 points to projects worth more than $5 million.

The economic region that came out in first place was Toronto - a stimulus target that makes sense, analysts say.

The Toronto economic region - which includes many of the suburbs - scored 5,661 points, with money pouring in for public transit, road repairs, new arenas, parks, pools and buildings.

The city and surrounding area make up the country's most populous metropolitan area, and it has been hit fairly hard by the recession. The unemployment rate for the region, averaged over the last three months, is 9.5 per cent.

That's above the provincial average of 8.9 per cent, and the national average of 8.1 per cent. It's also significantly higher than the 6.9 per cent rate seen a year ago. Analysts say the city badly needed the infrastructure if it hopes to regain a competitive edge once the recession is over.

"That's a good reason to target large cities," said stimulus expert Louis-Philippe Rochon, associate professor of economics at Laurentian University in Sudbury, Ont.

But the second-place winner in the stimulus bonanza is less logical, analysts say.

Ottawa scores 3,142 points on The Canadian Press scale, even though the unemployment rate for the region, 5.7 per cent, is the lowest in Ontario. The jobless rate has climbed just 0.8 percentage points over the last year of recession, compared with the provincial average of 2.6 percentage points.

"If you want to be effective, you should do it where you have a lot of slack in construction labour," said economist Jack Mintz from the University of Calgary's School of Policy Studies.

In most provinces, major cities fare the best in receiving stimulus, even though the unemployment rates are usually relatively low.

While it makes sense to put infrastructure money into urban hubs that could use a boost in competitiveness, the spending in the big cities comes at the expense of spending in areas of high unemployment. In no province is the area with the highest unemployment at the top of the list for receiving stimulus.

But analysts question whether the federal government would be spending its money efficiently if it targeted only areas of high unemployment.

Some of those areas have chronically high unemployment rates, regardless of the recession, and require long-term fixes rather than short-term boosts, said Rochon.

"Abitibi and Gaspe are not the economic engines of the country," he said.

It would make more sense to target the money to areas that have "fallen victim to cyclical problems" related to the collapse of manufacturing and the auto industry, volatile energy prices and the strong Canadian dollar, he said.

Indeed, The Canadian Press analysis shows that in general, stimulus spending has favoured regions where the unemployment rate has jumped more than the national average, during the recession.

The three-month average national unemployment has risen 2.1 percentage points in the last year, according to Statistics Canada. And eight of the top 10 stimulus recipients have seen their regional unemployment rates rise by more than that amount.

In five of the top 10 recipient regions, the unemployment rate has risen three percentage points or more in the last year. Those five regions are Kitchener-Waterloo-Barrie, Ontario Northeast, Windsor-Sarnia, and London - all in Ontario - and Lower Mainland Southwest in British Columbia.

-With data sorted and compiled by Willis Fong.

 
Consider AlsoFurther Articles