Economy

Globe editorial: Why don't you feel as good as the economy looks? – The Globe and Mail

Published

3 years ago

December 7, 2021

It was the best of times, said the data. It was the worst of times, said our anxiety-ridden minds.

The data show that Canada has recovered all of the jobs lost during the pandemic. All, and then some. Canada gained 154,000 jobs in November, and the unemployment rate fell for the sixth month in a row, to just 6 per cent. There are now 186,000 more Canadians working than in February of 2020. Statistics Canada’s latest labour-market report, released last Friday, showed more full-time jobs, more part-time jobs and more hours worked. Total hours worked are back to prepandemic levels.

And this isn’t a statistical illusion, with full-time jobs replaced by involuntary and impecunious self-employment. On the contrary, demand from employers is so strong that Canadians have been moving from self-employment to employees at a faster clip than before the pandemic. Since August, the number of employees in Canada has grown by 371,000, including 275,000 in the private sector.

Over the past two years, wages are up by 7.7 per cent. Those in their jobs for less than three months have been the biggest gainers, with an average raise of more than $2 an hour, or 10 per cent.

And what about the she-cession? There isn’t one. Employment among core working-age women, those 25 to 54, rose by 66,000 in November. The percentage of core working-age women who are employed is almost 81 per cent – a full percentage point higher than at the start of the pandemic. That’s the highest level in Canadian history.

There are downsides in all of this – notably labour shortages and the threat of inflation. However, it’s important to recognize that these are, for the most part, side effects of remarkable and somewhat unexpected good news.

After much of the economy was put on ice in early 2020, triggering a contraction sharper and deeper than the Great Recession of 2008-09, the assumption was that climbing out of this crater would take years. Instead, even though the pandemic is still very much around, the pandemic recession isn’t.

After the Second World War, Canada enjoyed a long economic boom, sparked by stimulative policy, the unleashing of idle resources and an explosion of confidence in the future. The past few months have had all of that – minus the exuberant confidence. It may have to do with the fact that, while previous generations got a clear end to their war, we’ve as yet had no equivalent to VE Day. We’re still battling a dangerous and active enemy.

And so, after nearly two years on edge and on guard against an omnipresent virus, our collective psyche remains in a bit of a catastrophizing state. We’re all suffering from pandemic PTSD. Or, given the pandemic isn’t yet post, TSD.

Yet the economic data, however wrong they feel, are right. Despite the pandemic devastating sectors such as travel and tourism, it’s been some time since the overall job market was so favourable to anyone looking for work. Statscan’s latest info shows that demand from employers is pulling record numbers of low-skilled workers – those with a high-school diploma or less – into the labour force.

The United States also has labour shortages, and an even lower official unemployment rate. But unlike Canada, part of the U.S. story is that several million workers have dropped out of the labour force. Last month, Canada had more jobs than in February, 2020; in the U.S., 3.9 million fewer people were working.

A favourite aphorism on Bay and Wall streets is that the stock market “climbs a wall of worry.” Since late March of 2020, worries have been towering – and markets have climbed them. There remain anxieties aplenty, from whether Omicron could re-energize the pandemic and kneecap the economy, to the reverse, namely whether the economy will get so hot that the Bank of Canada will have to slow it by raising interest rates.

Worrying about all that might go wrong is the job of central bankers, governments and editorial writers. But it’s also important to put worries in perspective. The threat of inflation, with too much money chasing too few goods and too many unfilled job openings, is real. It’s also infinitely preferable to its opposite: deflation, a collapse in demand and too many unemployed people chasing too few jobs.

For the economy, December, 2021, is far better than March, 2020. Even if it doesn’t feel that way.

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Economy

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

Published

3 days 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

7 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

1 week 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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