Canada could shed a total of up to 1.2 million jobs this year and next, the parliamentary budget watchdog predicts.
Suggesting Prime Minister Stephen Harper’s government has vastly underestimated the impact of the economic recession, Kevin Page says the employment picture is much worse than the federal Conservatives predicted in the January budget.
Page also says the Harper government’s claim that it will be able to stop running annual budget deficits in five years cannot be believed. He says that in 2013-14, instead of balancing its books, Ottawa will still run a $16.7 billion deficit, according to those who have seen the independent budget officer’s latest findings.
The cumulative federal budget over five years will hit $155.9 billion, Page forecasts. Based on recent government estimates, Finance Minister Jim Flaherty’s calculations call for a cumulative deficit of only about $100 billion over five years.
Page, appointed parliamentary budget officer last year, has consistently produced economic forecasts that have proven more accurate than those from Flaherty and private sector economists.
The latest report has been provided to the House of Commons finance committee and will be made public later this week.
In it, Page says the medium-term outlook for employment is “significantly weaker” than predicted in Flaherty’s Jan. 27 budget.
He says unemployment, currently at 8.4 per cent, will average 8.7 per cent this year, compared to Flaherty’s estimate of 7.5 per cent for 2009.
And the budget officer sees the jobless rate going as high as 9.4 per cent in 2010.
Based on the government’s forecast, Canada stands to lose an additional 160,000 jobs in 2009. But Page says the worse-than-predicted employment picture means that actual total job losses in 2009 could go as high as 530,000.
Page predicts real economic growth this year of minus 2.4 per cent.
Ruffled feathers in Ottawa
• Kevin Page’s reports have ruffled feathers in Ottawa, beginning last fall when he released a report showing the Afghan war could cost $18 billion by the time the troops leave the country in 2011.
• A joint committee of MPs and senators recently warned Page, who has made a habit of releasing information to the public when it is released to MPs, should be kept on a shorter leash.