The recent federal throne speech stated, “The Government will soon complete negotiations on a comprehensive economic and trade agreement with the European Union [CETA]. This agreement has the potential to create 80,000 new Canadian jobs.”
There has since been a subtle but important shift in the government’s wording around that figure, as I pointed out in the following letter in Thursday’s Ottawa Citizen (page A10) and Saturday’s Montreal Gazette (page B6):
L. Ian MacDonald writes, “A study indicates CETA will add $12 billion and 80,000 jobs to the Canadian economy.” In fact, the study in question assumed full employment to estimate $12 billion of additional output and therefore did not project any additional jobs.
Government officials then translated $12 billion into employment for communications purposes. Conservative wordsmiths already appear to be backing away from this indefensible claim.
The media backgrounder accompanying last week’s announcement of the Canada-EU deal stated, “An agreement could boost Canada’s income by $12 billion annually and bilateral trade by 20 per cent. That’s equivalent to creating almost 80,000 new jobs.” Subsequent federal documents on CETA have used similar wordings.
The government is not claiming that CETA will actually create jobs. It is claiming that CETA will boost output by a dollar value deemed “equivalent” to 80,000 jobs. Unfortunately, many journalists and columnists have missed this distinction.
So far in 2013, Canada has imported $36 billion from Europe but exported only $22 billion to Europe. If CETA increased both amounts by 20 per cent, $7 billion of additional imports would displace more Canadian production and jobs than $4 billion of additional exports could add.
CETA threatens to deepen Canada’s bilateral trade deficit with Europe. Unless we simply assume full employment, a larger trade deficit would detract from Canadian output and employment.
Erin Weir is an economist with the United Steelworkers union and a CCPA research associate.