Corporate hoarding, bad policy undercut job creation: CLC President comments on job numbers for September 2012-CLC

OTTAWA – The Canadian Labour Congress says the federal government is allowing corporations to hoard billions of dollars received in tax breaks, and that is undercutting Canada’s ability to create good jobs.

“We can create a lot more jobs in Canada but only if the federal government is prepared to change policies that clearly have not worked,” says CLC President Ken Georgetti.

Georgetti was commenting on the release by Statistics Canada of its Labour Force Survey for September 2012. There were 1,393,800 unemployed Canadians in September and the unemployment rate was 7.4%.

“Our economy is sluggish and there is very little prospect on the horizon for real job growth,” Georgetti says. “We have five unemployed workers in this country for every job vacancy. For this situation to improve, the government has to move away from its failed policies.”

Georgetti says that Ottawa has given away billions of dollars in tax breaks to corporations in the hope that they would use the money to invest in job creation, but that has not happened. A CLC study early in 2012 showed that 10 of Canada’s largest companies had hoarded $30.7 billion in short and long term cash assets over the previous decade. The Governor of the Bank of Canada also criticized corporations for hoarding money rather than investing it in the economy.

Georgetti says, “If corporations refuse to invest the money they have been given in tax breaks, the government should take it back and use it to create strategic infrastructure. They can make valuable investments in urban transit, in social programs such as child care, and in training and apprenticeship programs for workers. That would put our tax money to much better use.”

Georgetti says the CLC will make this case in the months leading up to the next federal budget in 2013.
Quick Analysis from CLC Senior Economist Angella MacEwen

There was an increase of 52,000 jobs in September, but 33,800 of them were in self-employment, a notoriously precarious form of work. Job losses in the public sector were offset by gains in construction, trade, and information, culture and recreation. Despite this, a smaller proportion of the population was employed this September (61.9%) than was the case a year ago (62%). The unemployment rate in September rose to 7.4%, and the number of unemployed Canadians rose by 20,500 to 1,394,000.

The labour market prospects for young workers continues to deteriorate. In September 2012, there were 173,000 fewer full-time jobs for youth aged 15-24 than there were back in September 2007. The employment rate for youth aged 20-24 fell to 66.6% in September 2012, which is five percentage points lower than in September 2008. The real unemployment rate for youth, including involuntary part-time and discouraged workers, was 19.6% in September 2012, which was 1.4 percentage points higher than September 2011.

Canada needs public investment in strategic infrastructure to spur job growth and improve labour productivity.

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. Web site: www.canadianlabour.ca Follow us on Twitter @CanadianLabour

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