Clearing up Doug Schweitzer’s cherry picked economic data

Alberta’s economy minister recently painted a rosy picture of the province’s economy, but he left out a few details.

Last week, Doug Schweitzer, Alberta’s minister of jobs, economy, and innovation released a statement on Alberta’s economy. However it contained several misleading statements based on cherry picked data.

I thought I’d go through the statement to fill in the context that Schweitzer left out.

Alberta has not just recovered all of the jobs that were lost during the pandemic, but we have gained jobs. Despite a pandemic and energy price crash, Alberta’s unemployment rate is the lowest it has been since December 2018 and I am confident that the coming months will see a continued drop in unemployment. . . . In the first three months of this year, Alberta added 22,400 jobs and employment is 4.3 per cent higher than last March.

What’s missing from this statement is that unemployment in Alberta was the third highest in the country last month, and we were the only province outside of Atlantic Canada that still has unemployment above 6%.

Not only that, but we still have 16,300 fewer full-time jobs than we did in June 2019, the month before the UCP implemented the Job Creation Tax Cut. And during that same period, full-time jobs went from 82.5% to 80.5% of all jobs in the province.

It’s been nearly 3 years, and we still don’t have the job creation that the UCP promised during the 2019 election campaign.

More than 13,000 businesses have incorporated over the past three months, an increase of 4.8 per cent compared with the same period last year.

First of all, anyone can incorporate a business. They can be holding companies for other businesses, not even employing anyone. They can be sole proprietorships, with no employees. The number of incorporated businesses, let alone the change in that number, doesn’t tell us much about the economy, let alone about employment, as Schweitzer was attempting to do.

So, let’s look at the number of businesses that reported having at least one employee.

Between December 2018 and December 2021, the number of businesses employing at least one person decreased from 119,795 to 116,351, a drop of 3,444. This is the most recent data available.

Plus, that drop was the largest decrease in the country. And 6 provinces saw increases instead of decreases.

Alberta’s average weekly earnings increased by 2.0 per cent in January 2022 compared with January 2021, to $1,254. Nationally, average weekly earnings were $1,162.

For years, Alberta has been known for having the highest wages in Canada. Under the UCP, however, Alberta has been on track to lose that status.

Alberta was one of only two provinces that saw a decrease in wage growth between February 2022 and March 2022.

And while wages are better now than they were a year ago, Alberta had the second worst increase in wages since March 2021. We were one of only 4 provinces that saw wage growth below $1 and one of only two with wage growth below 50¢.

On top of that, over the last 3 years, the Alberta–Canada wage gap has been decreasing, with last month hitting the lowest level for any March since at least 2012.

In fact, this past January, the difference between the national average hourly wage and Alberta’s hit its lowest point during the last 1o years: $1.55. At its peak in November 2018, the difference was $4.21.

Our manufacturing sector is seeing growth across sectors. Alberta is one of the top provinces for manufacturing sales growth, with sales totalling $16.1 billion in the first two months of the year – up 30.2 per cent from this time last year. Energy products and fabricated metal product sales grew by 63.7% and 44.3%, respectively. Over the same period, Alberta’s wholesale trade increased 23.4% from last year, with growth in every product category.

Alberta is also leading the country in growth in merchandise exports. Alberta exported more than $28.6 billion in goods during the first two months of this year, up 54.4% from last year. This was led by growth in energy products, which was up by 72.8% year to date.

This is very misleading. Manufacturing sales and exports are measured in dollar value, and we’ve had skyrocketing inflation over the past year. And as inflation drives prices up, it’s going to naturally increase the total value of sales and exports.

In fact, if we overlay inflation and manufacturing sales for the last several years, we find a very close correlation.

Our work to create a business-friendly environment by lowering taxes on job creators and reducing red tape is helping to restore business and investor confidence and attract significant job-creating investment to the province.

Lowering taxes and environmental and labour protections doesn’t create jobs.

Remember corporate income tax is calculated based on profits, not revenue. And profit is how much revenue you have left after you paid your expenses, including labour. No one is going to hire more workers because the tax on corporate profits is lower, giving them more profit.

Companies hire more workers when there’s more demand, not when there’s more profit.

The most recent net migration numbers, released last month, show positive growth.

That’s technically true, but it leaves out the fact that we had several quarters in a row with negative growth.

In fact, starting with the second quarter of 2020, Alberta saw 5 straight quarters of more people leaving for other provinces than moving here from other provinces. Even with the gains over the last two quarters of 2021, we’re still short nearly 8,000 people.

Since the second quarter of 2020, Alberta has seen 113,300 people move there from other provinces. On the other hand, there were 121,272 people moving to other provinces during the same period.

Not only that, but if we include every quarter since the UCP were elected, we have a net loss of over 8,000 people.

Q2 201919,35621,369-2,013
Q3 201916,76816,70266
Q4 201911,45610,751705
Q1 202017,10316,200903
Q2 202016,87220,923-4,051
Q3 202012,59213,454-862
Q4 20208,65910,449-1,790
Q1 202115,24118,973-3,732
Q2 202123,63929,086-5,447
Q3 202122,01317,5244,489
Q4 202114,31410,8633,451

Alberta’s housing markets are booming and overall building permits are up 7.7 per cent, comparing the first two months of this year with January and February 2021.

Sure permits are up 7.7% over the last year, but we’re still below 2018 levels. Building permits declined during 2018 and early 2019, before plateauing for a few months until finally bottoming out at the start of the pandemic. And the decline of 2018 and 2019 was a continuation of a decline that started back in 2014, when the PCs were in power.

In June 2020, permits were at their lowest level since at least 2011. And while we’ve seen significant growth since then, 2022 monthly levels are still lower than they were at the end of 2021, which itself was still lower than 2018 levels.

The province’s economy is expected to fully recover to 2014 levels this year, expanding by 5.4 per cent, and be among the nation’s growth leaders.

I mean, sure, GDP is expected to increase by 5.4%, and GDP increased by 5.9% in 2014. However, Alberta’s GDP contracted by nearly 8%in 2020. A gain of 5.4% isn’t all that impressive.

It looks great that Alberta’s GDP will be higher than many of the other provinces, but we tanked the most in 2020. Plus, our GDP contracted in 2019, too, but only by 0.1%. Data for 2021 isn’t out yet.

And when you have a lower baseline, having a higher growth rate doesn’t mean you’ll end up better off.

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By Kim Siever

Kim Siever is an independent queer journalist based in Lethbridge, Alberta. He writes daily news articles, focusing on politics and labour.

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