Two years in, the BC Jobs plan is failing to deliver

January 9, 2014

It’s traditional in many cultures to usher in the New Year with wishes for prosperity. But after a year of slow growth when the province actually lost jobs, fewer BC families can expect to see those wishes come true.

To see such weak job market performance four years into a post-recession recovery is unusual to say the least. It leaves British Columbians rightly wondering if the provincial government’s flagship economic initiative, the BC Jobs Plan, is failing to deliver.

A new report I’ve published with the Canadian Centre for Policy Alternatives offers some answers. BC Jobs Plan Reality Check examines a number of indicators of labour market performance and compares the pace of recovery since the Jobs Plan was announced in late September 2011 with the two years of the recovery that preceded it.

The findings reveal a largely jobless recovery, which was not significantly boosted by the BC Jobs Plan. While the jobs recovery has been disappointing across Canada, BC’s is weaker than the Canadian average. The persistently high unemployment rate, still over 2 percentage points above the pre-recession levels, is only the tip of the iceberg.

Jobs created since the Jobs Plan have been primarily temporary positions and have not kept up with BC’s growing population. The employment rate (the proportion of working age British Columbians who have jobs) is virtually unchanged since the worst of the recession. In fact, the province would need 94,000 more jobs to reach the pre-recession benchmark of 74%. That’s as many jobs as were created in 2010, 2011 and 2012 combined.

The Jobs Plan was supposed to stimulate private sector job creation, but the private sector actually lost 12,000 jobs in the first ten months of 2013. It’s very rare for the private sector to shed jobs outside of a recession. In the last 40 years in BC, it has happened only once, in 2001, and then only about 2,700 jobs were lost, much fewer than last year.

The resource focus of the BC Jobs Plan was supposed to breathe life into regions outside the Lower Mainland and Greater Victoria, which were hit particularly hard by the recession. But while a few towns like Prince George have seen a lot of activity over the last two years, when all the numbers are added up, only the Kootenay and Northeast economic region have experienced net job creation since the Jobs Plan was launched. Thompson-Okanagan, the Cariboo, and the North Coast and Nechako have fewer jobs than before the plan, and have yet to recover the jobs lost during the recession.

While the government touts the role of the resource sector in job creation, the reality is that just 2% of British Columbians are directly employed in mining, oil and gas extraction and forestry and logging combined. This sector remains such a small share of the job market that even a doubling or tripling of employment would not place it among top employment sectors in BC.

Besides, the majority of jobs stemming from these resource projects will be generated during their construction stage, so any lift to the local economies is likely to be short-lived. And these jobs would come at a great environmental price, threatening northern communities with air and water pollution and endangering our climate.

On top of this, there is concern that many of these new resource jobs may be filled with temporary foreign workers or skilled workers coming from other parts of the country rather than by local unemployed workers.

While temporary foreign workers take up a small share of BC jobs (just over 3% as of December 2012), the increase in temporary foreign workers since the recession represents 29% of the net new jobs created in the province. This points to serious gaps in our skills training programs that are putting youth and unemployed workers at a disadvantage.

One of the assumptions behind the Jobs Plan is that all governments can do is create favourable conditions for (mostly foreign) investors to step in and create jobs. This is not only false but also very limiting for our province.

The government itself can be a source of what Premier Clark calls “the first new dollar.” Whether it’s by hiring workers to enhance public services and make them more accessible, by purchasing goods and services from BC businesses or by initiating work on needed infrastructure projects, the provincial government can create jobs and leverage significant spin-off hiring and investment by the private sector.

As we enter the fifth year of a largely jobless recovery, it’s becoming clear that BC’s current economic strategy is failing to deliver. We need to shift to an economic strategy that is more diversified and less environmentally risky, and that puts more British Columbians to work in well-paying, family-supporting jobs.

Iglika Ivanova is Economist and Public Interest Researcher with the Canadians Centre for Policy Alternatives and author of BC Jobs Plan Reality Check: The First Two Years.