Manitoba·Analysis

Can the Tories double the rate of job creation in Manitoba?

Brian Pallister is promising to more than double the rate of job-creation in Manitoba — if you accept the premise governments are in fact capable of creating jobs.

PCs promise 40,000 new jobs in 4 years ... that's more new jobs than Manitoba added in the previous 9 years

Manitoba PC leader Brian Pallister is pledging to create 40,000 new private-sector jobs. The world economy may have other plans for Manitoba. (Jeff Stapleton/CBC)

Brian Pallister is promising to more than double the rate of job-creation in Manitoba — if you accept the premise governments are in fact capable of creating jobs.

The PC leader says Manitoba will create 40,000 private-sector jobs over four years if voters grant the Progressive Conservatives a second term.

That's a very ambitious goal, considering the total number of jobs in Manitoba rose by 37,000 over the previous 9½ years.

At the start of 2010, the first full year former NDP leader Greg Selinger served as Manitoba's premier, there were 482,000 jobs in this province, according to Statistics Canada. The most recent jobs tally for the province is 519,000 jobs.

Pallister appears to be well aware it won't be easy to match this growth in less than half the timeframe.

"They're ambitious goals, granted, but I think we're an ambitious people and I think we live in an ambitious province," Pallister told reporters on Friday, outlining a number of ways he could accomplish this task in very broad strokes.

For starters, the Tory leader pledged to follow through on a previous promise to standardize the way permits are approved in Manitoba and to wrest away the power to approve development proposals from the City of Winnipeg and other municipalities.

The premier claimed the elimination of red tape to this extent would allow $5.1 billion worth of new investments to proceed in Manitoba every year. 

This too is ambitious, as a number of Winnipeg mayors — Sam Katz and Brian Bowman among them — have tried to speed up the rate at which permits are approved and to eliminate other forms of red tape. The PCs appear to be banking on the notion they will succeed where Winnipeg and smaller municipalities have failed.

They also assume a new appeals process for land-use proposals — which may or may not include a new provincial-appointed appeals body — will increase certainty for developers, rather than create even more confusion.

Generally, developers have no problem with rules and regulations. They just want them to be applied consistently, so they can cost out their projects accurately and make sound decisions about whether to pursue them.

Help for miners and movie-makers

Less red tape is just one component of Pallister's job-creation plan. He also pledged unspecified support for tourism, the film industry and mineral exploration in northern Manitoba. He pledged to create strategies for growing the food-processing, aerospace and manufacturing sectors and also made a broad pledge to create more green-technology jobs.

He promised a modest increase in infrastructure spending, which is one of the few demonstrable ways a government can create jobs. He also pledged to enhance economic development, after the province eliminated funding for a number of economic-development agencies and handed over some international-trade responsibilities to the non-governmental World Trade Centre Winnipeg.

Finally, he pledged to reduce red tape for the craft beer and spirits sector. This, presumably, is not just a move aimed at appeasing hipsters: Manitoba distilleries face higher retail markups for their booze than manufacturers of gin, whiskey and vodka do in other provinces.

All of the details for all these pledges are supposed to come later, which is par for the course for the PC re-election campaign, to date. 

Is Manitoba still recession-proof?

The problem is no provincial government can credibly promise to create a specific number of jobs. The economic fortunes of a province as small as Manitoba rise and fall at the whims of worldwide geopolitical forces.

Even brilliant economic innovation on the part of a forward-seeking government can not mitigate the effects of a growing U.S.-China trade rift, never mind a worldwide recession. The conventional wisdom Manitoba's economy is too diverse to suffer in a recession could prove to be a myth if the insurance, mining and manufacturing sectors continue to decline.

So far, the PCs do not appear to have a plan to diversify Manitoba's economy even though the job-creation numbers under their watch exceed the job-creation numbers during the final years of the Selinger NDP government.

According to Statistics Canada, Manitoba generated 16,000 new jobs during the first 39 months of PC government — all the months for which data are available. During the final 39 months of the NDP government, Manitoba created 1,700 new jobs. 

There are only a handful of proven means of creating jobs in the short term. Some of them are not available to provincial governments.

For example, the feds could try to stimulate economic growth by lowering interest rates, at least in theory. In reality, interest rates have been so low in Canada for so long, consumers can be forgiven if they start expecting to be paid to buy new cars or other big-ticket items.

In countries with high unemployment rates, governments can boost unemployment benefits in an attempt to stimulate consumer spending. But unemployment, which has ping-ponged between 4.5 and 6.5 per cent in Manitoba over the past decade, isn't a big enough problem in Canada overall to require this particular sort of intervention. 

The province still has a few options at its disposal, including infrastructure spending. The problem, as the PCs have stated repeatedly over the past three years, is big-time spending on roads and bridges is not sustainable in the long term.

This leaves one job-creation measure that businesses may want to see in Manitoba: The reduction or outright elimination of the provincial payroll tax, formally known as the health and post-secondary education tax levy.

Reducing the payroll tax could allow businesses to hire more workers. Eliminating it altogether for new workers would provide an even greater incentive to do so.

There's no evidence this is on the table, but Pallister has made tax cuts a major part of his re-election campaign.

It's not a stretch to assert business owners in Manitoba are more interested in learning about specific tax-relief measures than they are in hearing broad pledges to create specific numbers of new jobs.


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