When he launched his plan, Tim Hudak claimed that he had three different economists sign off .There’s one problem: None of them did

2. Has Anyone Read the PC Plan?
2
• When he launched his plan, Tim Hudak claimed that he had three
different economists sign off
• There’s one problem: None of them did
• “If you read my letter I state that the ‘methodology’ they use to
create their fiscal plan is reasonable, not the ‘plan.’ I do not
comment on any party’s plans only their methodology.” (Ernie
Stokes, iPolitics.ca, May 22, 2014)
• “Pedro Antunes, deputy chief economist at the Conference Board,
told me in an interview that the Conference Board is not endorsing
the Million Jobs plan — nor did it even see the plan.” (iPolitics.ca,
May 14, 2014)
• “Zycher didn’t study (the PC plan). His work was done months
before the current election campaign and it’s not based on the
specifics of what Hudak says he would do as premier.” (Ottawa
Citizen, May 12, 2014)

3. Tim Hudak’s Plan
Source of job creation Average Yearly Cumulative Total
Baseline growth (yearly average of previous 10-years) 65,400 523,200
Lower tax rate on employers from 11.5% to 8% 14,976 119,808
Ending wind and solar subsidies 5,048 40,384
Reduce the regulatory burden 10,600 84,800
Develop the Ring of Fire 550 4,400
Participate in New West Partnership Trade Agreement 199 1,592
Apprenticeship reform (calculation shows net baseline) 21,280 170,240
Breaking traffic gridlock in Toronto and the GTA 12,000 96,000
Reduce personal income tax burden following a balanced budget (over second 4 years) 5,885 47,080
100,000 fewer positions in government workforce (over first 4 years) -12,500 -100,000
Restrain public sector in line with population growth and a focus on frontline professionals
(over second 4 years)
5,398 43,184
TOTAL 128,836 1,030,688
3

4. Baseline Growth
4
• 523,200 jobs – more than half of the plan –
are from what the PCs call “baseline growth”
• These are jobs that “would be created anyway
if the province maintained the status quo of
the last decade, the Tories acknowledged.”
(Canadian Press, May 13, 2014)
• Hudak’s plan will drive Ontario into a
recession, ensuring these jobs won’t be
created under his leadership

5. Corporate Income Taxes
• Hudak relies on a Conference Board Analysis
for support for his claims about job creation
arising from reduced corporate taxes
• Using the same document, there are three
major issues with the PC plan
5

6. Corporate Income Taxes – Issue # 1
6

7. Corporate Income Taxes – Issue # 2
• The PCs start with the Conference Board analysis
of an immediate 1% reduction in the Corporate
Income Tax rate
• Then they multiply the effects by 3.5, to reflect
their 3.5% proposed reduction in CIT rates
• However, their cuts will be phased in, rather than
brought in immediately, so the job impacts
predicted by the Conference Board, can’t just be
multiplied
7

8. Corporate Income Taxes – Issue # 3
• The single biggest issue with the PC plan is that they’ve confused person-years of employment with
new jobs
• The Conference Board’s analysis of a 1% cut:
• The Conference Board defines a person year of employment as one full-time job for one year
• In other words, over 10 years, those 42,800 person-years of employment does not mean that
42,800 jobs will be created
• It means that 4,280 permanent jobs will be created.
• If you multiply the impact of a 1% corporate tax reduction by 3.5, that represents 14,976 jobs
• To get to their claim that their Corporate Income Tax cuts would create 119,808 jobs, the PC’s
multiplied the total number of jobs created by 8 – for each year of their plan
• In other words, this isn’t double counting, it’s octuple counting
8

9. Wind and Solar subsidies
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• Hudak’s plan assumes that ending subsidies for clean energy sources will
add $20B to GDP and create 40,384 jobs
• This is based on Benjamin Zycher’s work
• What Zycher actually says is that removing the subsidies will create 5,048
jobs in total:
• Once again, the PCs have taken the total number as an annual number,
and multiplied by eight

10. Reducing the Regulatory Burden
• The PC plan assumes 84,800 jobs created from a
reduction in red tape
• Again, they look to Benjamin Zycher’s work for
justification
• They take a total number of 10,600 and treat it like an
annual number, again counting each job eight times:
m
10

11. Personal Income Taxes
• Hudak has said that if he gets a second mandate, he’ll cut
personal income taxes by 10% on average (CJBK Radio, May
15, 2014)
• Benjamin Zycher, the US economist that Hudak used to
validate his numbers tells us that a 10% reduction is the
equivalent of about two percentage points (Zycher paper,
page 16)
• The Conference Board of Canada tells us that a one point
reduction in PIT will support 1,975 jobs in the 4th year after
implementation
• So a two point reduction will support 3,950 jobs. Again, the
PCs confuse person-years of employment with new,
permanent jobs, overcounting by a multiple of eight
11

12. 12

13. Tim Hudak’s Plan
Source of job creation Average Yearly Cumulative Total
Baseline growth (yearly average of previous 10-years) 65,400 523,200
Lower tax rate on employers from 11.5% to 8% 14,976 119,808
Ending wind and solar subsidies 5,048 40,384
Reduce the regulatory burden 10,600 84,800
Reduce personal income tax burden following a balanced budget (over
second 4 years)
5,885 47,080
TOTAL 101,909 815,272
13
If they did their
math right
0
14,976
5,048
10,600
3,950
34,574
Hudak’s jobs numbers on these components of his plan are off by 780,698 jobs or
95.76%

14. Tim Hudak’s Recession

15. Ontario’s Economy
• Ontario’s nominal GDP is estimated to be
$685.5 billion in 2015-2016
• Government program spending of $120 billion
is 17.5% of GDP, or more than $1 out of every
$6

16. Hudak’s Cuts
• In Hudak’s balanced budget plan, he plans to
reduce spending by $6.457B in 2015/16
• But he’s also accounted for $2.15B in savings,
because of a public sector wage freeze
• The problem is that the 2014 budget does not
build in any additional funding for wage
increases
• As a result of this error, Hudak’s 2015/16 cuts
will actually be $8.697B

17. Quantifiable Impact on GDP
• As a share of provincial GDP, the $8.697B cut is
1.27%
• That is spending that will be taken directly out of
the economy
• There’s also an indirect, spin-off impact
• The Federal government estimates the multiplier
for government austerity to be 1.5
• So the total impact of Hudak’s cuts will be 1.9%
• Projected real GDP growth in 2015/16 is 2.5%
• That leaves you with just 0.6% real growth

18. Unquantifiable Impact on GDP – 1
• Real GDP growth would be further threatened by the
disproportionate jobs impact that public sector
spending cuts have
– Jim Stanford: “In fact, since government programs are
relatively more labour-intensive than other sectors, the
decline in employment could be more than proportional.”1
• There’s a further impact on GDP that will be felt as
some of the PC cuts work through the economy,
including:
– cuts to business support programs
– reduced consumer spending as public sector employees
await decisions to be made on lay-offs
1 http://www.progressive-economics.ca/2014/05/06/how-not-to-create-a-million-jobs/)

19. Unquantifiable Impact on GDP – 2
• As GDP growth falls, the revenue coming in to
government falls as well
– This requires further cuts to keep the balanced
budget plan on track
• These impacts are difficult to quantify, but will
reduce GDP growth further