The following is excertped from the 13 May 2010 edition of the "Financial Post".

Canada's climb out of recession may take longer than previously thought, according to a report released Wednesday.

The Canadian Federation of Independent Businesses found Canada's reputation for having emerged from the recent global financial crisis relatively unscathed is not necessarily well-deserved.

Based on employment data broken down by size of enterprise and industry, the report found nearly 500,000 jobs were lost in the private sector between the third quarter of 2008 and the fourth quarter of 2009. With a net increase in public sector employment of 140,000 during the same period, the CFIB report concludes the entire economy lost 360,000 jobs.

Overall private sector employment losses continued while public sector employment rose through all five quarters at a rate of 3.7%, the report found.

“Public sector employment growth may have helped at least dampen the depths of the recession a year ago, but we will have to maintain that cost and that has to come from somewhere,” said Ted Mallett, CFIB's vice-president and chief economist. Since average public sector salaries tend to be significantly higher than in the private sector, then having a public sector that is growing at fairly high rates will only serve to increase future tax bills, Mr. Mallett said.

“Basically if we're paying more taxes instead of investing in productive activity, that is actually going to slow down the recovery, not speed it up.”

The latest figures from Statistics Canada show private sector employment may now be picking up. The April 2010 Labour Force Survey found a record increase of 108,700 jobs in the private sector with no recorded change in public-sector employment levels. The CFIB isn't saying that the trends are wrong, only that they should be taken with a grain of salt....

Though Mr. Mallet did acknowledge that April's job figures were, “a step in the right direction,” he stressed that “we need to make sure there is continued growth ... 100 000 jobs down is still 400 000 to go.”

The report also found smaller private sector businesses supported employment better than larger firms. Large and medium-sized businesses lost 5.6% and 5.9% of their paid employees respectively during the report period, while companies with fewer than 50 employees experienced a more modest 2% decline.

South of the border, the opposite is the case. America's National Federation of Independent Businesses found in its April survey that larger firms were better positioned for recovery, with small businesses showing no intention of boosting head-counts at all over the next three months. According to Toronto-based Capital Economics, small businesses in the United States “remain the thorn in the side of the blossoming economic recovery.”