The Canadian Association of Professional Employees (CAPE) today came out today with their own GDP and jobs impact estimates from the $8 billion in federal cuts. They project 116,000 jobs lost and a $10 billion hit to the national economy.
Readers will recall that I made my own estimates of job losses in a recent study. There I estimated between 60,000 and 68,000 jobs lost for a $4 billion cut. However, as the study was being released it became clear that the goal wasn’t $4 billion in cuts, it was double that at $8 billion. I re-ran the new $8 billion figure through my model and came to the conclusion that the number of jobs lost could be between 99,000 to 108,000. I really thought that 108,000 full time jobs lost was on the high side but CAPE’s number is even higher still.
I should note that while I worked hard on the “Cuts Behind the Curtain” study, there was information that I just didn’t have. CAPE represents the actual economists and statisticians within the federal government who would have access to that missing information. It wouldn’t surprise me if some of the base data used in the CAPE report was (wink..wink..nudge..nudge) more accurate than mine.
I was questioned in on my initial numbers which were half this size. It looks like models with better data than mine are showing that I was conservative in my assumptions and the impact of cuts is going to be larger than my worst case scenario.
What that means in practical terms is unemployment over 8% and possible austerity recession here in Canada if the cuts do hit the $8 billion goal.