Economy

Canadian economy added 41,000 jobs in April: StatCan

Published

1 year ago

May 5, 2023

OTTAWA –

The labour market is showing no signs of the slowdown the Bank of Canada is hoping for to get inflation down to two per cent, something economists say could force the central bank to get off the sidelines and raise rates again.

Statistics Canada’s latest labour force survey revealed Friday the economy continued to add jobs in April while wage growth outpaced inflation.

Employment rose by 41,000 jobs in April, but with all the gains made in part-time work.

Meanwhile, the unemployment rate held steady at 5.0 per cent for the fifth consecutive month. That’s just above the all-time low of 4.9 per cent reached last summer.

In a client note sent out Friday morning, BMO chief economist Douglas Porter said the latest jobs report once again shows “no evidence that the labour market is softening at all.”

“If this persists through the spring, the Bank of Canada may yet be forced to rethink its rate pause, especially with the housing market showing signs of reviving.”

The Bank of Canada paused its interest rate hiking cycle earlier this year, encouraged by slowing inflation. With its key interest rate sitting at 4.5 per cent, higher borrowing costs should force people and businesses to pull back on spending, and employers to rethink their hiring plans.

But so far, the labour market has remained resilient, despite previous forecasts for the economy predicting a slowdown to start the year.

The central bank has been warning that a tight labour market will make it more difficult to get inflation back to its target of two per cent, as higher wages could put upward pressure on prices.

TD director of economics James Orlando said the details in the jobs report are “mixed.” The economy continued to add jobs, but only part-time work. Moreover, population growth has been propping up employment numbers for months as Canada welcomes more immigrants.

And although the unemployment rate hasn’t budged, Orlando said there are signs that hiring isn’t happening as broadly in the economy.

“In the last three months, we went from almost 90 per cent of sectors hiring to 69 per cent of sectors hiring right now,” he said.

The job gains in April were led by the wholesale and retail trade industry, while the largest losses occurred in business, building and other support services.

The tight labour market is also putting upward pressure on wages. Average hourly wages were up 5.2 per cent on a year-over-year basis, growing faster than inflation.

The annual inflation rate in March was 4.3 per cent and is expected to fall to about three per cent by mid-year.

High wage growth is pushing the Bank of Canada to remain hawkish in its communications on monetary policy, even as it holds its key interest rate steady.

During a speech on Thursday at the Toronto Region Board of Trade, Bank of Canada governor Tiff Macklem addressed the labour market tightness.

“Most wage growth measures remain around the four to five per cent range. Unless productivity growth surprises us with a strong increase, persistent wage growth in that range will make it difficult to achieve the two per cent inflation target,” Macklem said.

Last month, the Bank of Canada’ governing council discussed raising rates again, but opted to remain on hold.

Orlando said if the economy continues to resist the slowdown the Bank of Canada is trying to engineer, interest rates may not be high enough.

“Maybe the Bank of Canada has to reassess what the proper level or the policy rate is to actually bring the economy to the economic slowdown that’s needed to get inflation back (down),” Orlando said.

This report by The Canadian Press was first published May 5, 2023.

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Economy

Minimum wage to hire higher-paid temporary foreign workers set to increase

Published

14 hours ago

October 21, 2024

Anne Joseph

OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.

Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.

The change is scheduled to come into force on Nov. 8.

As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.

The program has also come under fire for allegations of mistreatment of workers.

A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.

In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.

The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.

According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.

The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.

Temporary foreign workers in the agriculture sector are not affected by past rule changes.

This report by The Canadian Press was first published Oct. 21, 2024.

— With files from Nojoud Al Mallees

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Economy

PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

Published

5 days ago

October 17, 2024

Anne Joseph

OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

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Economy

Statistics Canada says levels of food insecurity rose in 2022

Published

5 days ago

October 16, 2024

Anne Joseph

OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

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