An economic analysis released by the Alberta NDP suggests a more substantive investment in the federal wage top-up program could have led to a GDP increase worth hundreds of millions and created nearly 2,000 jobs.
Prime Minister Justin Trudeau announced last May that the provinces had agreed to collectively pitch in $1 billion to bolster $3 billion in federal funds that would boost the pay of essential workers.
While other provinces accessed all or half of the matching federal funds by September, Alberta was the sole exception, having accessed just $47 million of its $347-million allocation.
The NDP’s recent analysis used a fiscal multiplier model that indicated an investment of $100.3 million in 2020 could have generated a sustained GDP increase of $401.3 million, and job growth of 1,706, by the fourth quarter of 2021.
The NDP’s modelling indicated that by the fourth quarter of 2021, the $100.3 million expenditure would have seen a return that included a sustained GDP increase of $401.3 million and job growth of 1,706. (NDP)
Leader Rachel Notley presented the findings of the analysis in Calgary on Tuesday, and questioned why the UCP had not taken full advantage of the eligible funding for Alberta.
“Essential workers have been working on the front lines of this pandemic. They risk their health every single day,” Notley said.
“The federal program is put in place to ensure that essential workers are properly compensated for the risk that they take to do their job … and for some reason, [Premier] Jason Kenney has been dragging his feet.”
‘300% return on our investment’
Alberta Finance Minister Travis Toews told a legislature committee in November that the province had received the $47 million in federal funding with no strings attached.
The remaining funds would have been cost-shared at a 3:1 ratio, and could be used to pay top-up wages to health-care workers, correctional officers, first responders and other essential workers on the front lines of the COVID-19 pandemic.
“This was good for workers, and it was a good deal for the provinces — for every one dollar they spent on topping up essential worker wages, the federal government paid another three dollars,” Notley said Tuesday.
“From an economic perspective, in the most simplistic of terms, this is a 300 per cent rate of return on our investment.”
In its analysis, the NDP stated that it used the same methodology as Prime Minister Stephen Harper’s finance ministry when creating its 2009 economic action plan.
The $100.3-million investment in the federal top-up plan, the analysis said, would have directly increased Alberta wages and been used to stimulate the economy in the short- and medium-term.
Its stimulative effects would have included an increase in spending by households, or increased savings, that encourage a higher level of sustained economic output or investment, according to the analysis.
While Calgary economist Trevor Tombe told CBC News that he does not endorse fiscal multiplier methodology — expressing concern that it can sometimes be used to arrive at whatever effect one wants — he said the NDP used the model sensibly.
“A multiplier of 1.0 is not unreasonable to use within this class of economic impact analysis. So [the NDP’s] numbers are sound,” Tombe said.
“I have serious critiques with the method as a whole, but the NDP in this case appears to be using the tool the way that one should.”
‘Political game-playing’
The province’s seeming reluctance to invest robustly in the program has also drawn the ire of unions across the province.
“Alberta is an outlier, a gross outlier, in regards to doing what’s necessary to make sure that these low-paid, front-line workers get the so-called hero pay that they’ve been promised,” Alberta Federation of Labour president Gil McGowan said in November.
Notley acknowledged Kenney has suggested the UCP would be providing an update about the wage top-up soon, but still reserved strong words for the party.
“This would have been money that we saw flowing into our economy almost immediately, and there would have been job creation,” Notley said.
“I struggle to comprehend what the delay is, I’m left to wonder if maybe it really was about … political game-playing.”
CBC News contacted the finance minister’s office, seeking comment, but had not received a response prior to publication.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
