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Dissecting Alberta's labour market: not getting better but at least not getting worse

Dissecting Alberta's labour market: not getting better but at least not getting worse

Despite higher oil prices and signs of life in the energy patch, labour markets in oil-producing provinces have yet to show meaningful recovery. In fact, the labour market continues to deteriorate, at least in quality, as more Canadians shift from full-time to part-time work.

Statistics Canada reported that 44,000 jobs were created in October, which sounds like a good number on the surface. However, the picture looks different as you dig a little deeper.

SHIFT FROM FULL-TIME TO PART TIME CONTINUES

67,100 part-time jobs were created last month while 23,100 full time jobs were lost. That trend seems to show no signs of easing. Since October 2015, 124,000 part-time jobs were created nationally compared to only 15,500 full-time positions.

OIL PRODUCING PROVINCES STILL NOT DOING WELL

Alberta gained 9,000 jobs in October, almost all part-time. The province's unemployment rate held steady at 8.5%. Over the past 12 months, the province has lost 47,300 full-time jobs and gained 21,100 part-time positions. 

Saskatchewan isn't doing much better. The province shed 2,400 jobs in October, almost all full-time. Employment is down by 10,600 over the past year, all full-time positions. The province's unemployment now sits at 6.9%.

The worst hit province is Newfoundland and Labrador (NL), where the unemployment rate shot up to 14.9% in October (from 13.6% in September). The province lost another 5,600 jobs last month, mostly full time. NL has lost over 10,000 full-time positions in the past year.

The national unemployment rate was unchanged at 7.0%.

COMPARISON TO OTHER PROVINCES

In contrast, Ontario created 25,400 jobs in October, dropping the provincial unemployment rate from 6.6% to 6.4%. The province gained 32,600 part-time jobs in October but lost 7,200 full-time positions. Over the past 12 months, the province has created 58,400 part-time jobs and 18,700 full-time positions.

BC's unemployment rate rose to 6.2%, from 5.7% in September, due to a rising labour force. The province created 14,900 jobs in October, about evenly split between part-time and full-time. As in Ontario, BC's job growth over the past 12 months has been much more part-time (up 41,300) than full-time (up 14,300).

Quebec was relatively unchanged in October but remains one of the most improved labour markets, gaining 79,400 full-time positions over the past 12 months.

WHERE THE JOBS ARE

Construction, retail and education were the best performing sectors last month. Construction continues to be the strongest sector of the economy (in terms of job creation), where 46,500 jobs were added over the past year. Education is a close second, adding 34,000 positions y/y. 

Professional and technical services continues to struggle, ending the month unchanged but is still up 13,700 jobs from the same time last year. 

Employment in natural resources increased by 10,000 in October, the first notable increase since March 2015. Most of those jobs were focused in Alberta. Natural resource jobs are still down 19,600 (-5.6%) from the same time last year. 

The worst performer? Manufacturing, down 25,400 positions from October 2015.

A TALE OF TWO CITIES

Calgary's unemployment rate jumped from 9.5% in September to 10.2% in October. Edmonton, in contrast, saw its unemployment rate fall from 7.7 to 6.9%. Calgary has been hit especially hard due to its heavy reliance on engineering jobs. Edmonton has been somewhat cushioned by strong government spending.

IS THERE ANY GOOD NEWS?

In their latest Economics Trends report, the Alberta government speculates there is a lag between jobs and oil prices. In the 2008 oil price crash, oil prices bottomed in early 2009 but the labour market didn't bottom until much later in the year. Coupled with improvements in wages seen over the past few months, all signs seem to suggest things aren't getting worse, at least not for now. 

COURTESY GOV'T OF ALBERTA

COURTESY GOVERNMENT OF ALBERTA

However, there is some good news in the energy patch. Companies like Cenovus and Canadian Natural Resources are considering restarting some oil sands in-situ projects early next year. After a very wet summer and fall, drilling activity is sure to pick up through the last quarter of 2016 and into next year.

But the new year brings a new carbon tax, whose impact has yet to be quantified. Towards the end of 2017, several major oil sands mining projects (Fort Hills and Horizon) will be completed and begin wind down. January 2018 brings another hike in the carbon tax and 30% jump in the minimum wage. It remains to be seen if small improvements in oil prices expected over the next few years will be enough to revive Alberta's labour market.

SOURCES:
STATISTICS CANADA • LABOUR MARKET SURVEY, OCTOBER 2016
GOVERNMENT OF ALBERTA • ECONOMIC TRENDS

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