The federal government's most recent "jobs and growth" budget will wind up costing Canada both jobs and economic growth over the next few years, the Parliamentary Budget Officer says in a new report.
The PBO's latest estimates on the impact of the 2013 budget handed down in March show the cumulative impact will be to reduce economic growth by 0.12 per cent and job creation by 14,000 by 2016.
Combining the latest budget measures with the cutbacks unveiled in 2012 means there will be 62,000 fewer jobs in 2016, rising to 67,000 fewer in 2017, than might otherwise be the case without the cuts.
The PBO cautions the estimates do not mean the cutbacks will result in a loss of jobs, but that employment will be lower than it might have been absent the measures. In economic speak, that means that government spending will act as a drag on economic growth, rather than a stimulus.
The report, released on the same day the government will table legislation to enact the budget, notes that revised spending levels in the latest economic blueprint will have a minimal positive impact on jobs, actually a statistically meaningless net gain of one this year and next, but the longer-term effect is fewer jobs in 2015, 2016 and 2017.
The report also projects that the economy will grow at a slower rate than Finance Minister Jim Flaherty counts on in the March budget, by 1.5 and 1.9 per cent this year and next, compared with the budget estimate of 1.6 and 2.5 per cent respectively, but this will not undermine Ottawa's plans to balance to budget in 2015.