Canada’s economy finished a sizzling summer by adding 90,200 jobs in August, the third consecutive monthly increase that brought the country as close as it has been to recouping historic employment losses last year.
The unemployment rate fell to 7.1 per cent for the month, compared with 7.5 per cent in July, bringing the rate to the lowest level since the onset of the pandemic last year.
Economist had expected that Friday’s report from Statistics Canada would show another gain as restrictions eased in much of the country, giving another reopening bump to the labour market.
Brendon Bernard, an economist with job-posting website Indeed Canada, said the pace of gains is likely to cool with the arrival of fall because there are fewer restrictions to roll back.
Speaking in Hamilton Friday, Liberal Leader Justin Trudeau says there is still a need to help sectors that are further away from a full recovery.
He also says the best way to help the economy heal is to end the pandemic.
NDP Leader Jagmeet Singh says he believes investing in social programs like pharmacare, dental care and mental health support would also lead to more job creation.
The gains in August were concentrated in full-time work and in the hard-hit service sector, led by gains in accommodation and food services as restrictions eased in much of the country.
Employment increased in Ontario, Alberta, Saskatchewan and Nova Scotia in August, with little or no change in all other provinces. British Columbia remained the lone province with employment above pre-pandemic levels.
Statistics Canada said gains in the service sector pushed employment there back to pre-pandemic levels for the first time, although there is still some areas that are lagging. TD senior economist Sri Thanabalasingam wrote in a note that the level of employment in high-touch industries was 10 per cent, or nearly 300,000 jobs off its pre-pandemic mark.
Overall, employment was within 156,000 jobs, or 0.8 per cent, of the level recorded in February 2020 before the onset of the COVID-19 pandemic, which is the closest the country has been to recouping all the jobs lost during the first wave of COVID-19.
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Still, there are a few flies in the ointment, said CIBC senior economist Royce Mendes, who noted the participation rate fell in August, which helped push down the unemployment rate.
Statistics Canada said the unemployment rate would have been 9.1 per cent in August, down from 9.5 per cent in July, had it included in calculations Canadians who wanted to work but didn’t search for a job.
“The economy is still a long way from being fully healed,” Mendes wrote in a note.
Bernard said a key area of weakness remains in the ranks of the long-term unemployed, who have been out of work for at least six months and accounted for 27.4 per cent of all unemployed in August.
While their numbers dropped by 29,000 to 394,000 in August, long-term unemployment was still 215,000 above pre-pandemic levels. Statistics Canada said about one-quarter of long-term unemployed last worked in March or April 2020 when the pandemic started.
“While there was a bit of improvement in this regard in August, there’s still a ways to go to getting the number of Canadians who’ve been out of work for extended periods of time, back to lower, more normal levels,” Bernard said.
Also of note in August was that workers with jobs felt more comfortable searching for new opportunities. Statistics Canada reported the job-changing rate was 0.8 per cent in August, back to pre-pandemic levels after dropping to zero after first-wave lockdowns.
“It’s a sign that after over a year of relatively slow job hopping that we finally started to see workers show some confidence and make some changes that they might have held off on over the past year,” said Bernard, who noted that job postings on Indeed have been well above pre-pandemic levels for several months.
“This is a really important trend, not just for the health of the labour market from the job-seeker side, but also from employers.”
But not all those jobs are being filled. Labour supply hasn’t kept pace with the robust demand for workers in high-touch industries, Thanabalasingam said, resulting in staff shortages.
“Career changes, and ongoing health concerns could be possible reasons for the lack of available workers,” he said.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
