Stimulus effect on job creation “a bit of a guess”: Minister Strahl

OTTAWA – Infrastructure Minister Chuck Strahl says he agrees with the federal auditor general that it’s a “bit of a guess” how many jobs the government’s $47 billion in stimulus spending has created.

“It isn’t an exact science. On the other hand, we have plenty of anecdotal stories,” Strahl said in response to Sheila Fraser’s first analysis of the federal stimulus program.

In the first of two installments on stimulus, Fraser congratulated public servants for working diligently around the clock to rush the federal funding out in time to combat the recession.

But she chastised the government for sacrificing strict environmental controls and its tracking of job creation to the need for speed.

Government departments made early attempts to keep track of the number of jobs being created by the unprecedented level of spending, but abandoned them because no one was using the same methodology, Fraser said.

Instead, the government is relying on economic models and assumptions based on prior recessions to estimate how many jobs have been maintained or created from its spending.

“You’re taking a bit of a guess at it, because of the multiplier factors, but it’s probably pretty accurate, pretty reasonable,” Strahl agreed. “Obviously a lot of employment was created.”

The stimulus plan delivered almost 90 different programs designed to roll out over two years, and create enough jobs to mitigate the effects of the recession. That spending, however, is responsible for much of Ottawa’s $56-billion deficit.

In a news conference, Fraser said that without a firm jobs count, it will be hard for the government to evaluate which of its programs were most effective in fighting off the recession.

“What it will not be able to do, in all likelihood, is establish which particular programs were most successful and what can be learned from that.”

The first instalment of Fraser’s stimulus audit finds that the myriad government departments involved in the Economic Action Plan hired extra people, put in many extra hours and threw all their available resources at getting the money out the door as quickly as possible.

As a result, Fraser says the approval time for infrastructure programs was dramatically reduced to just two months from six months.

“It’s a testament to this government’s incompetence if we’re applauding them for merely getting funding out the door without completely bungling the process,” NDP Leader Jack Layton said in a statement.

“I expect the government to provide more than anecdotes to show their action plan is putting Canadians back to work.”

Fraser also points out that in their rush, government officials did not look closely enough at projects to see whether they should have undergone an environmental assessment.

Instead, they relied on simple statements signed by the applicants for government money. Well over half the approved projects examined in the audit did not have enough information to show whether or not an exemption from environmental assessment was warranted.

“Decisions on whether an environmental assessment was required for some projects were made on the basis of insufficient information gathered from applicants,” she writes.

“As a result, it is unclear whether some projects that were approved should have undergone an environmental assessment.”

She says she might revisit the issue in her next audit of the stimulus program, which will look at how well the money was spent.

The federal government has now made its streamlined requirements for environmental assessments permanent, in an attempt to cut red tape.

Absent from Fraser’s report is any mention of political interference leading to money for friends to build bridges to nowhere, as opposition critics have suggested.

An analysis by The Canadian Press of the early stages of the stimulus program found that funding favoured Conservative ridings, and paid little heed to areas struggling with high unemployment.

Strahl argued Tuesday that the money was distributed as equitably as possible _ although he acknowledged that all politicians have a fondness for having their pictures taken in front of a ribbon cutting.

The auditors note that all the stimulus programs they examined were heavily oversubscribed, but they did not look deeply into whether the rejected project proposals deserved to be tossed.

Rather, they point out that in most programs cabinet ministers made the final call, as set out in the structure of the Economic Action Plan. The Office of the Auditor General does not have the scope to dig into policy decisions made by cabinet ministers.

The audit did look at whether the building projects were significantly delayed, a key concern for many municipal organizations who argue that Ottawa should extend its funding past the deadline of next March so that unfinished projects aren’t left in the lurch.

Fraser found that many infrastructure projects did not start on time, for many reasons, and some of them missed an entire building season.

“Project delays increase the risk that projects will not meet the completion deadline of 31 March 2011,” the report warns.

Strahl said his department was tracking progress closely and speaking with provincial ministers to figure out ways to deal with the funding cutoff.

The government has also responded by increasing its monitoring of delayed projects. The stimulus rules allow Ottawa to cancel the project outright if the deadline is not going to be met.

Generally, though, Fraser was impressed with the attention public servants paid to properly implementing such a large and complex program.

“This report is evidence that when senior officials give priority to large initiatives like the Economic Action Plan, public servants rise to the challenge,” she wrote.

“I would give the government high marks for how they managed the initial phase” of the plan, she said in a news conference.

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