General Trends

The job market in Canada remains remarkably strong in comparison to the hemorrhaging occurring south of its border. Unemployment stands at 5.8 percent, the lowest rate in 33 years. The economy is creating jobs at its fastest pace in six years. To date, little has slowed down the country’s job growth, even after two consecutive years of 350,000+ annual job growth; 65,900 new jobs were added in the first part of this year. This job growth has been driven by hiring in construction, public administration and professional/scientific/technical services. Growth in these areas has offset losses in manufacturing and natural resources; however in natural resources, negative job growth is most likely the result of severe worker shortages.

The vast majority of this job growth is centered in Ontario. In Ontario, large gains in construction and professional/scientific/technical services have offset losses in manufacturing jobs. Eastern provinces generally outperform Western provinces in creating new jobs. Employment levels increased 0.7 percent in Prince Edward Island, New Brunswick and Saskatchewan. Alberta increased by 0.3 percent and Quebec by 0.1 percent. In Newfoundland, Labrador and Nova Scotia, employment has dipped. Across the various provinces, recent growth has been driven by retailers, banks, governments and other service providers. Clearly, Canadian employment statistics paint a picture of a service sector that is gaining strength – growing sufficiently large to offset job losses in Canada’s export-dependent manufacturing industries.

The above results reported by Statistics Canada were unexpected by Canadian economists. According to one Canadian newspaper article, "the numbers so startled economists that some questioned Statistics Canada’s ability to count." Says Deputy Chief Economist Douglas Porter, "this has been one of the big riddles for the past few years: that employment has stayed solid while growth hasn’t been so great. It can’t go on forever. At some point you have to have the rest of the economy churning out the revenues to support those payrolls." He also added "this report is truly a surprise especially given the source of strength is Ontario and construction. In a nutshell, the persistent strength in overall employment simply drums home the point, yet again, that the domestic side of Canada’s economy remains incredibly healthy, even in the face of the mounting trauma in export-related sectors." Unlike the US, where jobs have plunged in step with the economy, job creation in Canada has actually picked up its pace as the economy slowed to a tepid 0.8 percent advance. According to Porter, one reason Canada’s job market has outperformed that of the US is that governments across Canada have been bloated and in a hiring mood. He also points to robust consumption in the consumer sector with Canadians buying everything from cars to houses. Plus, corporate profits in some industries, particularly the oil and minerals sectors, have risen substantially with the steep rise in global commodity prices.

Economists hope that the strong domestic Canadian economy will cushion the country against losses in its very important US export market. Stefan Marion, an economist at the Bank of Canada, concludes that the country does seem well-positioned to absorb US weakness. The Canadian consumer has a different mindset than the US consumer. The latest consumer confidence index from the Conference Board of Canada finds "continued optimism from Canadian consumers in stark contrast to results from south of the border. The only regional decline occurred in Ontario, where the export-oriented manufacturing sector continues to adjust to the slowdown in the United States." Similarly, the corporate manufacturing sector is more optimistic than in the US. A survey from the Canadian Federation of Independent Business finds that the major market complaint is actually a shortage of workers. "Business owners’ concern over the shortage of qualified labor hit a record high in 2007, with 309,000 jobs remaining vacant for at least four months. Even with current economic uncertainties, Canadian demographics suggest that the shortage of qualified labor is not going to go away anytime soon." There is less business confidence among small businesses than larger ones, judging by a 20 percent decline quarter over quarter in the latest Small Business Confidence Index. Only 17 percent of small business owners surveyed indicated hiring plans, down 45 percent from the previous quarter.

This is just a sample of what you will find in the whole guide