Here’s the basic math error that ruins Tim Hudak’s Million Jobs Plan: Mike Moffatt

The Ontario Tories’ job numbers are an absolute disaster. The whole plan needs to be redrafted

Tim Hudak and Vic Fedeli talking about the Million Jobs Plan

PC leader Tim Hudak with finance critic Vic Fedeli speaks to media in Toronto on May 1, 2014. (Vince Talotta/Toronto Star/Getty)

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 8 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:

Million Jobs Plan Math Error

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 of ensuring policies have a wider exposure before a political campaign. This does not necessarily mean releasing plans publicly, but focusing grouping plans with key policy experts would help minimize the chance we see another episode like this again.

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15 comments on “Here’s the basic math error that ruins Tim Hudak’s Million Jobs Plan: Mike Moffatt

  1. As a freelance consultant ,I have often been amazed at the high fees some of my colleagues receive – especially those who have some partisan connections with the incumbent government.
    There clearly could be significant savings if consultant fees were reasonable – especially for those of a single source nature.

  2. My Parents always told me when I made mistakes that I should have learned in school: “With a mistake like that you should go back to your school teachers and ask for your money back”.

  3. Europe, Detroit, are good example to realize that Union/ Bureaucratic Based Programs do not really create Jobs , what they really do create an Elite Type of Workforce that survives only because the Political Party in Power protects them with favourable Legislation and Taxpayers pay in a very abundant form with every cheque they receive. Mr. Moffatt you are completely wrong. Mr Hudak’s Million Jobs Plan will assure that every Ontarian willing to work to better himself ,his children, grandchildren, his Province and his Country has the opportunity to do so. Your math is completely biased and wrong.

    • Err, no. Detroit’s problems were caused by the demise of two of the big three automakers who are, last I checked, private sector. They failed, arguably, because they failed to keep up with innovation in the industry and incorrectly read the market. Ford clearly saw the downturn and prepared accordingly. So much for the brilliant senior managers who were supposed to be fantastic, at least according to their high pay levels.

    • Your argument is based on your feeling, not based on facts.

    • Gus, You and Tim are the only ones who believe the math…. who is the one that is completely biased and wrong here????

    • If you questioned your assumptions and checked the facts you would find that government does in fact create jobs and not in the manner you described. Indeed there is research showing that governments create huge numbers of jobs. I will mention a few examples. Canada arm, highways, roads, hospitals, sidewalks, water systems, sewage systems, etc.

  4. I am sceptical that the errors in the math were really due to a lack of eyes on the platform, or a rush job. The election was hardly a surprise, and the PCs are not completely without economics resources. I suspect it was more due to a fervent desire to have something that was impressive and bold, and so once the numbers came up the first time, they were so impressed they didn’t look closely. This is a pretty basic error, repeated many times, and it makes me question further the level of competence in the party. If you are going to run as the party of fiscal responsibility and sound management of the numbers, you can’t get away with completely failing on the central pillar of your message.

  5. people who want to get elected exaggerate because voters expect them to deliver services that voters don’t want to pay in full for directly. such as subsidised public transportation. when elected a successful candidate makes more exaggerated promises (and accomplishments) and votes for more debt to please the voters they hope will re-elect them next election. in short, voters are responsible in part for politicians exaggerated promises. business cant make false claims subject to legal action against them!

  6. Hudak said that he is an economist and that this plan shows his expertise in Economics. Alas, as with much of what Hudak has done, the plan shows that Hudak is not competent as an economist. And in fact, Hudak only has an MA in Economics. I have an MA in Economics, and I can attest that the training at that level is in no way sufficient to entitle someone to say they’re an economist.

    But the problems in Hudak’s platform go way beyond the single error mentioned in this article. He wants to enact a severe three-year austerity program and doesn’t realize the knock-on effects of that in contracting the economy and reducing jobs. He wants to slash corporate tax rates and doesn’t adequately address the impact that will have on the budget deficit. It goes on and on.

    His social policies are similarly flawed and ill-considered. He proposes decreasing class sizes for junior kindergarten but increasing class sizes for all other grades. And so on.

    His promises to cut civil service jobs will be a repeat of Mike Harris’s mass firing of Ontario nurses – a costly mistake (they had to be hired back) that also led to lower quality health care because good will and trust was shot.

  7. Here’s some math for you. I will do Tim Hudak one better….for a meager billion dollars, I will CANCEL a whopping TWO MILLION jobs! Vote for me!! lol

  8. An awesome time Saturday night. We surprised my parents and they were thriled when they got there..Thank you! I was advised by the photo booth person that photos would be online. Where are they?

  9. Oh and I’m not a Liverpool or Chelsea supporter, however the way the Liverpool fans were still singing You’ll By no means Walk alone when their team was losing and the game was almost finished was wonderful. Big respect.