Trying to make sense of Canada's economic trends these days is a little like being a mosquito in a nudist colony: you don't know where to start Finance Minister Paul Martin, who has held down the cabinet's most difficult job with distinction since the Liberals marched back into power 2½ years ago, feels that by necessity he must concen-
trate on reducing the debt which Messrs. Trudeau and Mulroney had pumped up to $508.2 billion for strictly political reasons during their quarter century in office.
With his third budget tabled last week, Martin is, as the experts delicately decreed, “putting Canada’s fiscal house in order” by reducing the federal deficit by another $8 billion.
But he’s not really.
How can a house feel comfortable when more than nine per cent of its inhabitants can’t find jobs?
With only a couple of token job-creation measures, Martin is condemning the nation’s unemployed to the not very tender mercies of the private sector. Prime Minister Jean Chretien’s heart belongs to Bay Street This was where (on retainer to Gordon Capital Corp.) he spent much of his time and energy during the five years he spent in political exile before returning in June, 1990, to win the Liberal leadership. The Prime Minister makes occasional noises about the private sector not living up to its social obligations, and nothing is done to create any meaningful program that would force business to think about creating more work opportunities instead of merely greater profits.
Despite the emphasis on cost-cutting,
Martin’s best efforts have condemned Canadians to having to pay out $48 billion—nearly $1 billion a week—in public debt charges during the next 12 months. The national debt is still rising at $100 million a day, and our total debt-to-gross domestic product ratio at 103 per cent is the second highest in the industrialized world.
Martin’s determination to wrestle the deficit to the ground has turned cost-cutting into an obsession. That’s not only a cruel way to govern, it’s bad politics. Fighting the deficit ought to be a means to an end, not the objective itself. In his budget speech, Martin seemed to be aware of this dilemma by stressing that “restoring financial health paves the way for a more dynamic, job-creating economy.” Unfortunately, that’s one of those mellow-sounding, comforting notions that may once have been true, but that recent experience has rendered meaningless. New jobs don’t any longer follow cleaned-up government accounts.
The tragic fact is that the prospects for job creation—which is what gives any government its human face—have seldom been worse. Except for a few specialized areas, new full-time jobs have all but evaporated. No turnaround is in sight. The personal saving rate—once the pride of thrifty Canadians—at 6.5 per cent is at an
The finance minister is condemning the unemployed to the not very tender mercies of the private sector
all-time low. Nor are consumers expressing confidence in the economy’s or their own future by spending their money. Consumer purchases, which account for nearly two-thirds of the economy’s $780 billion in annual economic output, are stagnant. Investors and consumers have grown so nervous that even relatively low interest rates have not encouraged any significant renewal in capital spending or retail sales. Canada totters on the cusp of a new recession.
Exports, which constitute the economy’s most dynamic sector, have grown from 20 per cent of the country’s gross domestic product to 28 per cent since 1990. But even in this booming category, jobs have been lost at an alarming rate (96,000 in manufacturing alone). The irony is that while Canadian corporations reap record profits, they are announcing record layoffs. (The scariest headline of the year was in the Montreal Gazette: “Air Canada to cut 900 jobs—mostly in maintenance.”)
What Martin seems to have only dimly realized is that the basic notion of jobs is obsolete. “That much sought after, much maligned social entity, a job, is a species that has outlived its evolutionary time,” William Bridges, an American analyst wrote in Fortune magazine recently. “The modern world is on the verge of another huge leap in creativity and productivity, but the job is not going to be part of tomorrow’s economic reality.”
Such gloomy prognostications don’t mean that there won’t be work available in the future, but the idea of leaving high school or university and finding a 9-to-5 lifetime job that ends at age 65 when the boss springs for a gold watch is as obsolete as Preston Manning’s haircut. That shouldn’t be as frightening as it sounds. Jobs are a relatively modern invention, dating back to Henry Ford’s 1913 Model-T assembly lines. Before that, most work was done either at home on a pay-per-piece basis, or organized around individual projects, to which people lent their skills. That held true for harvesting crops or building cathedrals. Each task required combinations of skills whose possessors moved in and out of each work opportunity.
Last week’s budget took no account of the fact that we live in a brand new world. Most large Canadian companies, especially those rare entities still able to compete in the global marketplace, are in a race to “outsource” and “unbundle.” That means work is being farmed out to individual contractors, consultants or task forces whose fringe benefits don’t clog corporate payrolls. More than four million Canadians are already working at home and the trend is growing. There is work to be had, but getting a job has become an impossible dream.
In his quest to kick-start the economy and revive government revenues—which ultimately is the only meaningful way to tackle our debt—Paul Martin must wake up to changing realities. There’s no point having your “fiscal house in order” if there’s hardly anybody left who can afford the rent.
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