Budget watchdog points to slow flow of stimulus

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OTTAWA - Almost 5,000 pages later and Parliament's budget watchdog still can't tell how effectively the federal stimulus program is creating jobs and underwriting a recovery.
But from what he can gather so far, Parliamentary Budget Officer Kevin Page sees the stimulus money flowing very slowly.
Page has finished analyzing crates of stimulus documents and papers handed to him by Transport Minister John Baird.
And in a report released Friday, Page says the information is too thin to come to final conclusions about how well the program is creating jobs and fostering economic growth.
"The government has yet to provide a performance reporting framework to assess the success of the ISF in achieving these objectives," the report says.
His initial conclusions suggest, however, that the stimulus program is filtering into the economy slowly - despite government promises to rush billions of dollars out the door to get people back to work quickly.
"I think the data indicate that a lot of work has been done in terms of processing applications," Page said in an email, pointing to 3,000 projects worth $2.8 billion in federal money, approved as of the end of September.
"Once you move away from approved applications, the level of activity in terms of program implementation does diminish," Page said.
In the report, Page says that as far as he can tell, as of the end of September, only $512 million of the government's $4-billion Infrastructure Stimulus Fund has been actually handed over.
That's about 12.8 per cent of the total - remarkably close to the 12 per cent estimated by Liberal critics who were quickly dismissed as misinformed by the federal Tories.
"This shows a very minimal accomplishment. It's fair evidence of a failed job creation program," said Liberal MP Gerard Kennedy.
The numbers are even lower when measuring completed work. The stimulus program had spawned work worth about $245.5 million as of the end of September, the report says.
In other words, just four per cent of the federal, provincial and municipal money that has been announced has actually created economic activity, it says - although Page acknowledges his data is spotty.
Page had requested that Baird hand over his database so that the PBO's economists could assess the stimulus spending and give parliamentarians some initial conclusions on how well the program was going.
After much delay, Baird's office gave Page 4,476 pages of printed documents, none of which were made available on a searchable database. Friday's report is the PBO's attempt to make sense of the pages.
The bulk of the projects announced won't be completed until well into next year, the PBO found.
Most of the projects are small, and dedicated to roads, water and waste-water systems, the report notes. Those projects will create jobs, but won't do much for Canada's long-term objectives of improving productivity.
"These projects will certainly help support activity during the current period of economic weakness, which is important and is consistent with stimulus objectives, but will not likely contribute significantly to Canada's long-term economic potential growth rate," Page warned in his email.
The findings, however tentative, are a stark contrast to government claims of success that were found in the last update on stimulus spending. In that report, Ottawa said it had committed $3.6 billion, or 90 per cent, of the Infrastructure Stimulus Fund, as of early December.
The PBO report does not have data for October and November, when the government was highly active making new funding announcements.
But the Liberals say most of those announcements are all talk and no action.
"The government is making fantastical claims, and they can't even support very modest claims adequately," Kennedy said.
The PBO report excludes Quebec because of insufficient documentation.
Baird has argued frequently that the actual amount of government money spent is not the best measure to look at when evaluating stimulus. That's because once contractors are given approval to start a project, they can start hiring and conducting work well before the federal or provincial funding starts to flow.
But Baird has also said his department has not made any attempt to track how many jobs have been created by the funding. Officials in his office did not immediately return calls.
Ottawa has dedicated $16 billion over two years to funding infrastructure stimulus. The flagship program is the $4 billion ISF, which requires provinces and municipalities to match the funding.

Organizations: PBO, Infrastructure Stimulus Fund

Geographic location: OTTAWA, Canada, Quebec

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