May 22, 2013

July 27, 2012

Canada’s labour markets on either coast offer advantages versus the centre

Alex Carrick

Chief Economist, CanaData

Year-over-year total employment in Canada in June was +1.0%, according to Statistics Canada. That’s about half the rate of change one would like to see. Between +2.0% and +2.5% is the comfort zone for the country when the economy is chugging along near full capacity.

However, that would imply a “real” (i.e., inflation-adjusted) gross domestic product (GDP) growth rate of 3.5% to 4.0%. Instead, we’ll be lucky to achieve +2.0% for the year as a whole.

The regional pattern of job growth is showing significant variation. The resource-based provinces of the West are doing much better than the centre.

The provinces of the East – which have also become increasingly reliant on raw materials – lie somewhere between the two extremes.

The jobs growth rate collectively in the four provinces from Manitoba to B.C. was +2.3%. In the Atlantic Region, it was +1.4%.

Both those percentage changes were higher than in Central Canada, comprised of Ontario and Quebec, where year-over-year employment growth in June was +0.4%.

The labour markets in the two largest industrialized provinces in the country were almost identical. Quebec (+0.5%) recorded a slightly higher employment growth rate than Ontario (+0.3%). But as for unemployment rate, they were both at a 7.7% level.

All the lowest unemployment rates in the country were in the western provinces in June.

Alberta, as it has for many months now – thanks to a resurgence of projects in the oil patch – wore the crown for lowest jobless rate, only 4.6%.

Saskatchewan wasn’t far behind, at 4.9%. The two frontrunners were followed by Manitoba (5.2%) and B.C. (6.6%).

On the other side of the country, joblessness in the Atlantic Provinces was considerably higher than the 7.2% national average and 7.7% figure for both Ontario and Quebec.

Newfoundland and Labrador is still clinging to its last-place position, with 13.0% of its workforce not gainfully employed. P.E.I. (11.3%) had a higher out-of-work faction than Nova Scotia (9.6%) and New Brunswick (9.5%).

Newfoundland and Labrador’s high jobless percentage figure is due to continuing quotas in the province’s most traditional industry, the fisheries. In other emerging sectors, such as metals mining and offshore oil extraction, the local economy has been undergoing a positive transformation.

As for individual cities in the country, the accompanying tables set out the most recent results.

Based on the data in Tables 1 and 2, CanaData compiles an overall urban labour-market ranking. It isn’t shown here (there are only so many tables one can include in a half-page article), but it is commented upon in what follows.

The combined ranking takes into account both employment growth (highest to lowest) and unemployment rate (lowest to highest).

The number-one ranked city overall in June was Guelph, Ontario, due to a high rate of jobs growth (+4.8% for a 6th place ranking in Table 1) and a low jobless rate (4.9% for 4th place in Table 2).

Other cities performed better than Guelph according to one of the two main measures, but then came up short in the other. For example, Peterborough had an exceptional month for job creation (+12.9% and 1st place in Table 1), but fell way down in the unemployment-rate ranking (8.2% and 27th spot in Table 2).

After Guelph, five cites in Western Canada appeared in the Top 10 of the combined ranking – Calgary (position No. 2), Edmonton (No. 3), Regina (No. 7), Winnipeg (No. 8) and Saskatoon (No. 10).

The six largest cities in Canada, according to population, are Toronto, Montreal, Vancouver, Ottawa, Calgary and Edmonton.

We’ve already seen where Calgary and Edmonton stood in June. What about the other biggest labour markets in the country?

Ottawa (12th position) and Vancouver (14th spot) were slightly above the middle of the pack in CanaData’s ranking of the 33 census metropolitan areas (CMAs) in the latest month.

Montreal and Toronto were at or near the bottom. Both cities recorded little in the way of year-over-year jobs growth, with Montreal at +0.3% and Toronto even weaker, +0.1%.

At the same time, their unemployment rates remained elevated.

In fact, Toronto’s jobless rate (9.0%) in June was the second highest in the country, exceeded only by Windsor (9.3%), where the severe downsizings in the auto sector that took place several years ago are still being felt.

It is encouraging to note, however, that while not exactly blistering, Windsor’s 2.0% gain in employment in June was twice the national average.

For more articles by Alex Carrick on the Canadian and U.S. economies, please see his market insights. Mr. Carrick also has an economics blog.

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