Government doesn’t create jobs, industry creates jobs. Hmmm…

If I had a nickel for every time an economic development made this statement. Governments don’t create jobs, industry creates jobs.

The only problem with that statement is that it is patently untrue. Governments do create jobs – millions of them. For starters, there are just under 1 million people working in public administration in Canada – federal, provincial and local government. Then there are all the people working in publicly funded health care – over 1.5 million. But we are just getting started. Public education in Canada accounts for something like 800,000 jobs. And lets not forget about national defense and police services – all funded directly by government – another 500,000 jobs. But wait, there’s more. How about all of the crown corporations such as Canada Post and the CBC? Several hundred thousand more there.

You see, the reality is that almost one out of every four jobs in Canada is funded directly by the taxpayer. Governments do create jobs – millions of ’em.

That brings me to the point. Despite the fact that governments led the charge in the 1990s promoting the fact that new technologies mean that work could be done anywhere from the largest city to the smallest village, most of the evidence is that the new jobs created in the public sector (all forms) were overwhelmingly placed in the larger urban centres. After deep cuts in the early 1990s, when the federal government began to hire tens of thousands of new workers late in the decade and into the 2000s, you guessed it, most of those jobs were placed in the National Capital region – Ottawa/Hull.

Ironically, all levels of government have been promoting rural regions such as Cape Breton, the Acadian Peninsula and the Gaspe to business – trying to lure them to setup factories and offices in these rural and remote regions of Canada. These areas are good for business, they say, because they offer lower costs, an eager workforce and cheap labour. However, when it comes to their own job creation – they aren’t taking their own advice.

It’s time for governments to stop talking out of both sides of their mouths. Promoting these regions for new business and cutting public service and related jobs at the same time. If Caraquet is a good place for business – it should be a good place for government to do its work as well. To top it off, governments, unlike businesses, have a vested interest in keeping these communities alive and prosperous.

We’re told that the Federal government is looking at the possibility of moving some of its jobs into the more needy regions of Canada. Unlike many of my colleagues in economic development, I applaud this. 50 high paying, good benefits, year round jobs in rural PEI has much more of an impact than would 50 more jobs in Ottawa.

Governments do create jobs. The question is – where will they put them? Will they continue to artificially inflate provincial capitals – many of which are now so dependant on government jobs that they would collapse without them? Or will they help these government towns become more diversified and attract new non-government businesses? This may free up some government work for the communities that really could use a shot in the arm.