The elementary-school math error in Hudak’s million jobs plan

Economist Mike Moffatt weighs in on the PC’s plan for the Ontario economy

<p>Ontario PC leader Tim Hudak is surrounded by his message as he speaks to the media at a campaign stop inside an electronics retail store in London, Ont., Thursday, May 15, 2014. THE CANADIAN PRESS/Dave Chidley</p>

Dave Chidley/CP

Dave Chidley/CP
Dave Chidley/CP

This article was first published by Canadian Business.

I have a confession to make: I was hoping the release of the million jobs plan would be a boost to the Ontario Progressive Conservative campaign.

My hope was not due to any ideological or partisan preference. Rather, I am a fan of the level of detail and transparency in their plan. The party went to great lengths to provide details and analytic support for every item in their million jobs plan. Naturally this opened up the party to media criticism, as the party was simultaneously roasted for having round numbers (one million jobs) and non-round numbers (119,808 jobs from corporate tax cuts) in their platform.

Like or hate the million jobs plan, at least voters were given the information they need to make an informed decision at the ballot box. If enough voters found the plan appealing to make it politically successful, it would spur other parties to provide more details when releasing policy, which can only be beneficial for Canadian democracy.

However, if you are going to release details, the first step must be to ensure that the details are correct. Unfortunately the Tories failed here, as they made an elementary-school-level math error in their analysis, overstating almost all of the jobs created through policy by a factor of eight.

My initial reaction when I saw Jim Stanford’s piece on how the Tory plan confused jobs with person-years of employment was disbelief. I thought it could not be possible that the Tories would make such an elementary error. In fact, at first I did not believe it. I have a network of economists I call when I need an opinion or a second set of eyes to look at something. I spent about two days on the phone, and kept hearing the same thing over and over: “Jim is right.” One of those economists, my Ivey colleague Paul Boothe, wrote a detailed piece outlining the Tory math error.

Here is a short primer on the mistake the Tories made. In the first line of their million jobs plan, they have 523,200 jobs from “baseline growth.” This number should be interpreted as saying the number of persons in the province with a job eight years from now will be 523,000 higher than it is today. However, when they claim that reducing the regulatory burden will create 84,800 jobs, this is based on the 10,600 job-creation estimate in the Zycher report (which the party commissioned) and multiplying it by eight to give 84,800 person-years of employment. But only 10,600 actual people (not 84,800) will have a job eight years from now who do not today. The Tories are adding baseline growth “jobs” to regulatory burden “person-years” to get their million-job estimate—despite the fact the two are in completely different units:


This error is not limited to the line item for reducing regulatory burden: the Tories made the same mistake for every item they adopted from the Zycher and Conference Board of Canada reports.

While the policies of the million jobs plan may be economically beneficial, the Tory job numbers are an absolute disaster. The entire plan needs to be redrafted, as the party made an inexcusable and elementary mistake in mathematics. I have serious concerns on what this episode will do for political discourse in the province. If the lesson that politicians draw from this lesson is not “check your math” but rather “don’t release details,” then we are all made worse off.

However, despite all of the self-inflicted problems with the million jobs plan, I still have a great deal of sympathy for the Tories. Consider the platforms of the parties that the Tories are running against:

As the incumbent government, the Liberals have a large structural advantage over the other parties. They are mostly running on their 2014 budget, which they had an army of civil servants assist in drafting and costing the plan. Opposition parties simply do not have access to those kinds of resources and are put at a structural disadvantage.

Then there is the NDP platform, which has more imaginary numbers than a university math class. Take the $150 million per year saved by limiting the use of consultants. No indication is given at how they arrived at that figure, or who will perform the work currently done by consultants. The most laughable claim is the one that $600 million per year will be saved by appointing a “minister of savings and accountability.” How on Earth could the party possibly know that there is exactly $600 million of “waste” in the system? What, exactly, is this waste they speak of? Too often “waste” is a politically coded term meaning “program we disapprove of.” What programs would the minister of savings and accountability cut? They are not saying, and the party is largely avoiding scrutiny because they refuse to give any details that may be challenged. But without those details, voters have no way of judging if the numbers are realistic, or as fanciful as “discover oil in Tilbury, collect $2 billion in resource revenues.”

Finally, there is the Green party, which is not so much avoiding scrutiny but being ignored altogether, as they are being excluded from the debate, despite running a full slate of candidates.

I hope the lesson that we draw from this episode is not “parties should not release details,” but rather that more time needs to be spent before policies are released so mistakes such as these are not made. One such way is to do what Paul Boothe suggested, ensuring policies have a wider exposure before a political campaign. This does not necessarily mean releasing plans publicly, but focusing plans with key policy experts would help minimize the chance we see another episode like this again.