HOW NOT TO CREATE NEW JOBS
The way jobs used to be created in this province is that an employer would take on new staff as the business grew, or as new products and services were added. That’s not apparently how things are done in Alberta now that the NDP has assumed power. It will soon start offering a $ 5,000 grant for every new job that’s created, including in the charitable and non- profit sectors.
“We’re very, very certain this will create no net new jobs,” said Justin Smith, director of policy, research and government relations for the Calgary Chamber of Commerce, when the budget was released. “So we see this as just a waste.”
It’s very telling that the chamber, whose members will be able to access the program, labels the waste for what it is.
Such subsidies make little sense and are budgeted to cost taxpayers $ 178 million over two years. Why should employers — many of whom were going to add to their payrolls in any event — receive $ 5,000 from taxpayers for each new worker they hire? And for those who are truly persuaded to add to their staff with the promise of $ 5,000, there’s this question to be asked: How sound is their planning if the offer of such a relatively small sum of money is driving a critical business decision?
There’s also the matter of fairness. The tax dollars of Alberta’s businesses and workers shouldn’t be used to subsidize other businesses and employees. There’s been no talk of providing proof of need of the money, after all, just the odour of a costly free- for- all.
The government has been rightly forced to defend its program, so presumably it will have to establish robust safeguards to ensure people aren’t being rehired after being laid off or cut adrift once the cheque has been cashed. That’s going to require a lot of time and money. Indeed, the biggest beneficiaries may end up being the civil servants hired to monitor the distribution of such a large amount of tax dollars.
Smith and others are likely right in their assessment of the program’s likelihood of failure. The sad part is that it’s just more money that Albertans will have to pay back to lenders in the future, diverting taxes from priorities such as health care and infrastructure.
Instead of borrowing money in some vain hope of inducing employers to hire more workers, the NDP government would be better off creating an environment where businesses want to invest and grow their ventures — a lowtax jurisdiction where everyone is invited to succeed and profit, not just those who meet the qualifications for a government handout.