A tale of 2 labour markets

There’s Alberta — and then there’s the rest of Canada
By Liz Bernier
|Canadian HR Reporter|Last Updated: 04/07/2014

It’s a statistic that provides a pretty good snapshot of Canada’s labour market as of late: In the past year, Alberta has been responsible for 87 per cent of all new job creation in the country.

The province created 82,300 of the 94,700 total jobs created since early 2013, and its employment rate rose by 3.8 per cent, according to Statistics Canada.

“We’re seeing far and away much stronger job growth in Alberta than really anywhere else in the country,” said Robert Kavcic, senior economist at BMO Capital Markets in Toronto.

“Over the past year, outside Alberta there’s been no net job creation in Canada, when you sum all the other provinces together. So it’s pretty striking right now, the gap in performance.”

And that gap seems to be getting more dramatic over time.

“It was pretty dramatic back in 2005, 2006, 2007... It basically stalled or turned around during the recession and early in the recovery, but now you’re seeing that gap open up again,” he said. “The difference is becoming more striking as time goes on.”

‘The West and the rest’

A year ago, Saskatchewan likely would have been lumped in with Alberta as a key driver of job growth, according to Nick Bishop, senior principal at Hay Group in Calgary.

“What’s changed this year, because of the falloff in the price of potash, is Saskatchewan is still
doing very well — but it’s not on fire like it was for the last five years. So now we really are down to Alberta and the rest,” he said.

Within Alberta, there’s been significant growth in key sectors such as construction and energy, said Vincent Ferrao, analyst, labour statistics division, at Statistics Canada in Ottawa.

“Construction has grown fairly strong by about 25,000 over the 12-month period. Also the natural resources — that would be mostly oil and gas — that has increased by 21,000 or 13 per cent over 12 months,” he said.

Alberta’s strong oil and gas sector is creating opportunities beyond its borders as well.

“There is actually export of the labour from Alberta, and it’s in the form of expertise,” said Bishop.

“So it’s not all people coming into Alberta — there’s actually expertise going the other way. And there’s quite a lot of exporting of expertise from Alberta into other parts of the world.”

Provincial variations

Step away from Alberta and the job numbers tell a very different story. British Columbia faced a decline in employment of about 10,000 in February and saw very little change over the past year, said Ferrao.

B.C. has been struggling to achieve net employment gains for some time, according to Angella MacEwen, senior economist at the Canadian Labour Congress in Ottawa.

“It’s quite surprising (how) the number of jobs in B.C. just haven’t come back… there doesn’t seem to be anything that’s driving growth there,” she said.

Ontario has been struggling with a tough manufacturing sector, seeing only marginal growth in employment over the last year.

“Where there are real troubles with manufacturing, then services are having trouble picking up the slack. In southwestern Ontario, there are a lot of plant closures and when you have really hard-hit communities, it goes beyond just where the plant closes. It can be broadly felt in depressed areas,” said MacEwen.

Quebec saw a significant decline in February, losing 26,000 jobs. But previously the province had seen a slight upward trend.

“One month of jobs data — it’s always hard to draw any conclusions from that,” said Kavcic.

“But the bigger picture is that the (Quebec) economy has been consistently under-performing for a couple of years now, and the labour market is reflecting that. So the jobless rate is (above) the national average, job growth is running quite a bit softer.”

The massive government shipbuilding contract in Nova Scotia and oil activity in Newfoundland and Labrador have provided some hope for the Maritime provinces, but there are still a lot of workers moving from Atlantic Canada to Alberta, said Bishop.

Saskatchewan perhaps stands out from the rest in terms of its economic strength over the past few years, said Kavcic.

“It’s still strong historically — the jobless rate is actually a touch lower than in Alberta. Job growth, though, has slowed a little bit… Momentum has slowed a little bit, part of it because there is some uncertainty in the potash sector, which had been a strong support for economic growth. Some uncertainty over pricing in the potash sector has cooled activity there.”

Labour mobility

These dramatic differences among labour markets leads to a lot of workers moving between provinces. But what sort of impact does that have on demographics?

“When you separate out the oil- producing provinces and you look at the rest of Canada… two things pop out,” said MacEwen. “(One is) the age of people who are working. So if you look at the job growth in Alberta and Saskatchewan, a lot of that job growth has been people between 25 and 44, and then if you look at the rest of Canada, it’s people between the age of 44 and 64.”

That can create additional challenges for the provinces that are losing a good chunk of the young workforce.

“What happens is communities lose their tax base, so there are fewer people that own properties to pay municipal taxes. The provinces are losing people who are at kind of that core age who pay taxes and who volunteer to coach hockey teams and all of those kinds of things, so the community loses out a lot,” said MacEwen.

If the flows are significant, they typically leave behind an older population, said Kavcic.

“In areas like public finance, for example, you have fewer prime-age workers supporting the health-care burden of a relatively older population now. So it has a pretty significant effect from that perspective.”

It can also be frustrating from a recruitment perspective since employers may have a hard time finding the best talent as people leave to pursue higher-paying jobs in other provinces, said MacEwen.

“It can be difficult and frustrating for them because they do see talented people leaving for higher-paying jobs,” she said. “But it can also be an opportunity for them to invest in the community and to find the talent that is staying and that wants to stay, and to develop that.”

Of course, workers need to go where the work is and labour mobility will always be a reality, said Bishop. But employers need to think strategically about how the workforce is changing over the long term.

“Everybody’s quite good at planning for the short term but there are strategic changes in (how), and where, people are working in Canada,” he said.

“Alberta can’t absorb all of the labour,” said MacEwen. “So it’s great that Alberta and Saskatchewan are making jobs, but they’re not absorbing all of the slack labour for the rest of Canada. So we still need to think creatively about what is going to be the engine of growth for Ontario going forward, or for Atlantic Canada going forward, and should we be investing in certain types of infrastructure to make that happen?”

Employment stats from coast to coast

Here’s how each province clocked in for the month of February 2014, according to the most recent Labour Market Survey from Statistics Canada.

Province

Unemployment rate

Participation rate

British Columbia

6.4%

63.5%

Alberta

4.3%

73.1%

Saskatchewan

3.9%

69.4%

Manitoba

5.3%

67.9%

Ontario

7.5%

66%

Quebec

7.8%

65.1%

N.L.

11.8%

61.4%

New Brunswick

9.8%

63.1%

Nova Scotia

8.9%

63.3%

Prince Edward Island

11.5%

69.6%

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