Next Budget Must Create Jobs, Not Destroy Them

OTTAWA, ONTARIO--(Marketwire - Feb. 3, 2012) - The President of the Canadian Labour Congress says that the upcoming federal budget should work at creating jobs and not destroying them.

Ken Georgetti was commenting on the release by Statistics Canada of its Labour Force Survey for January 2012. The national unemployment rate was 7.6% and there were 1,421,200 unemployed Canadians in January.

The federal government is planning service and job cuts that could throw as many as 100,000 people out of work. "This is exactly the wrong time for the government to take the axe to public-sector jobs and services," Georgetti says. "Canada's economy shrank in November and our labour market has been sluggish for months. Massive job cuts now would be a disaster."

Georgetti is calling on Ottawa to shift its focus from making cuts to assisting in job creation. "We want the government to use its 2012-13 budget to invest in job-creating infrastructure projects and badly-need public services."

Georgetti adds that public infrastructure investment can be paid for by reversing tax giveaways to corporations. "The government gives tax breaks to corporations and expects them to invest and create jobs, but our research shows that those companies are just sitting on the cash and not investing."

Georgetti says that Ottawa should restore the federal corporate income tax rate to 19.5%. "That would still be less than it was when the Conservative government took office in 2006, and would generate $10 billion this year in added tax revenue. That money can then be invested in public infrastructure.

Georgetti says that figures provided by the department of finance show that $1 billion invested in infrastructure investment creates more than five times as many jobs as the same amount spent on corporate tax cuts.

Quick Analysis from CLC Chief Economist Andrew Jackson

Canada's job market continued to weaken in January as employment rose by a meagre 2,300 jobs, much less than the growth in the number of workers in the labour force. As a result, the national unemployment rate rose from 7.5% to 7.6%.

The unemployment rate has been steadily climbing from 7.1% last September, since which time we have lost 67,000 full-time jobs.

The youth unemployment rate jumped from 14.1% to 14.5% in January, and there were significant increases in the unemployment rate in Atlantic Canada and in Ontario (where the unemployment rate rose from 7.7% to 8.1%).

We lost 3,600 full-time jobs in January, with the losses concentrated in construction (down 13,700) and in professional, scientific, and technical services (down 45,000). Many of these lost service jobs are probably linked to activity in the construction industry.

The Canadian Labour Congress, the national voice of the labour movement, represents 3.3 million Canadian workers. The CLC brings together Canada's national and international unions along with the provincial and territorial federations of labour and 130 district labour councils. Website: www.canadianlabour.ca. Follow us on Twitter: @CanadianLabour.