The Globe and Mail, which claims to be Canada’s national newspaper, seems intent on casting the western provinces as economic basket cases in desperate need of help from the rest of the nation. Last week, the newspaper headlined a piece about a monthly uptick in Employment Insurance claims from Alberta and Saskatchewan with a headline proclaiming: “Employment Insurance numbers paint grisly picture in Alberta, Saskatchewan.” The gruesome details? Saskatchewan’s 14,900 recipients were up 4.5% month-over-month, but still totaled about half of Nova Scotia’s 28,450 recipients. The 61,300 recipients for the entire province of Alberta, although double the number a year earlier, was only 6,000 more than the city of Montreal. Not great news, but grisly? And isn’t that why we have EI, to help with the ups and downs in the economy?
This Wednesday, the Globe followed up with another alarmist dispatch, a front page piece headlined “Alberta sheds 19,600 jobs in worst year since 1982 recession.” The occasion for the report was Statistics Canada’s annual revision of its Labour Force Survey data. According to economics reporter David Parkinson the data, updated from that released earlier this month, showed “the worst year for employment losses since the dark days of the national energy program “and “ratcheted up Alberta’s net job losses last year to 19,600…as the province’s energy driven economy buckled under the severe drop in oil prices.”
All that excited verbiage about ratcheting numbers and buckling economies (not to mention the spectre of Pierre Trudeau’s national energy program) sent me to the source – CANSIM Table 282-0087. Sure enough, the table shows that employment in Alberta in December 2015 was down by 19,600 from December 2014, a loss of 0.85%. (The same metric revised also shows that (yikes) December-to-December 2014-15 Nova Scotia lost 5,200 jobs, a drop of 1.35%. If, by the Globe’s estimation, Alberta’s economy is buckling, what’s ours doing? How does collapsing sound?)
But are things really that desperate in Alberta? It depends how you look at it. Month-to-month comparisons are not a very good measure of job gains and losses because the relatively small monthly sample size makes them prone to sharp swings. This may be what happened with the example used by the Globe. Between November and December 2014, employment in Alberta showed an unusually high increase of 11,700. So December 2015 was being compared with an outlier December 2014. A November 2014-to-November 2015 comparison would have shown a drop of only 4,000, nowhere close to the scenario painted by the Globe.
Better on average
The better way to get an accurate picture of annual changes in employment is to compare the average monthly job totals from one year to the next. Using that metric shows that even after the revisions decreasing the December 2015 job totals, employment in Alberta was higher in 2015 than in 2014, going up from a monthly average of 2,274,600 jobs in 20124 to 2,301,600 jobs in 2015, a gain of 1.2%. Monthly totals did begin to drop in October 2015, and if that trend continues it is possible that the 2015 jobs meltdown inaccurately announced by the Globe and Mail this week will occur in 2016. But if it does, it’s important to note that any job losses that take place will be to employment totals that have increased by about 130,000 since 2012. Compare that to Nova Scotia. The revisions released by Stats Canada this week trimmed another 200 jobs off the province’s annual monthly average, reducing it to 447,900, meaning our nasty drop from 2012 now totals 9,600, not the 9,400 reported in my post of Jan. 25.
Jobs losses in the Alberta oil fields are certainly no fun (especially now that my team, the New Democrats are in power), and their impact on commuting workers from Atlantic Canada will be felt in our neck of the woods. But hyping the extent of those losses with selective statistics isn’t helpful. Even if it were true that Alberta lost 19,600 jobs “last year” (when they actually gained 27,000) comparing this imaginary loss with 1982 is just wrong. Using the December-to-December metric, Parkinson cites a figure of 45,000 jobs lost in Alberta in 1982, those “dark days of the national energy program.”
But that figure’s a far cry from 19,600, made even more distant when the overall impact is taken into account. In December of 1981, Alberta had 1,190,500 jobs. The loss of 45,000 represented a 3.8% decline in employment. In December, 2014, Alberta had 2,305,700 jobs. A theoretical loss of 19,600 represents a drop of 0.85%. To have the same impact on the labour force now as the losses in 1982, Alberta would need to lose something like 93,000 jobs – real or imagined.
Even worse, however, is the way the Globe’s Parkinson’s piece compares the current situation with a distorted and inaccurate view of history in general and the national energy program in particular. He writes:
“It’s the worst year since 1982, when the province lost more than 45,000 jobs amid the double whammy of a global recession and the notorious NEP, a federal government program that capped prices, raised taxes and dramatically discouraged investment in the oil patch. A deep decline in investment in the sector has again been the key driver of the job losses in the past year.”
The NEP is like a red flag in certain conservative circles. It is said to have motivated Stephen Harper to enter politics as a member of the Reform Party. It’s unfortunate that Parkinson would chose to go into detail about the NEP while glossing over the second part of his double whammy (the recession) and ignoring the big whammy – the collapse of the international oil price.
NEP not main culprit
First, on the recession. There was a major one in 1982. It affected the entire world, not just Alberta’s oil patch. Employment in Canada (using Parkinson’s December 1981 to December 1982 metric), dropped by 4.1% (compared with Alberta’s 3.8%). British Columbia was hit the hardest – 85,000 jobs gone, a loss of 6.5%. Ontario and Quebec each lost about 4.3% of their jobs – some 300,000 jobs between the two of them. So how much of Alberta’s loss of jobs in 1982 was the result of the NEP as opposed to the world-wide recession? Hard to know, but given what the recession did to other economies, a small part would be a good guess.
And then there was the price of oil which Parkinson ignored, even though everyone (except a few Conservatives who blame it on environmentalists and First Nations) knows it is the cause of Alberta’s and Saskatchewan’s current problems.The first Trudeau government brought in the National Energy Program in 1981 on the assumption that oil prices would keep going up. The Premier of Alberta at the time, Peter Lougheed, signed a pricing agreement with Ottawa on the same assumption. OPEC, the oil cartel, couldn’t play along. Its ability to control the market evaporated and the price of oil began a slow, steady decline. Alberta’s economy, buoyed up by the quadrupling of oil prices in the 1970s, stagnated when those prices fell 75% by the mid-1980s. The NEP can hardly be blamed for that.
Sloppy journalism takes place every day. It can be a full-time job to stay on top of it. However, the Globe’s coverage of job losses in the oil patch has particular overtones during a week when Trudeau Jr. is caught in the middle of inter-regional political squabbling about the Energy East pipeline. By exaggerating job losses the Globe makes opponents of the pipeline look like heartless victimizers of the unemployed. Then it ups the ante with misleading and irrelevant references to the National Energy Program. If this keeps up, we’ll get the likes of Stephen Harper back in power in Ottawa. But then, maybe that’s the point.