Canada lost 17,000 jobs in May, pushing the unemployment rate up to 5.2 per cent, according to a Statistics Canada report released Friday morning. 

The decline is primarily driven by a 77,000 loss in jobs among youth aged 15 to 24. Meanwhile, employment increased by 63,000 among people aged 25 to 54. Men in this age range represented two-thirds of this growth, gaining 43,000 jobs.

Statistics Canada says the overall employment rate was “virtually unchanged,” with only a 0.1 per cent decrease in May. This is the first time since August 2022 that Canada has lost jobs; 326,000 jobs were gained between September 2022 to January 2023.

Average wages rose to $33.25 — a 5.1 per cent year-over-year increase. While the inflation numbers for May have not yet been released, this marks the fourth month in a row when the year-over-year wage increase is on track to outpace inflation, which was 4.4 per cent in April.

Statistics Canada reports that the industries that lost the most jobs in May were business, building and other support services, which lost 31,000 jobs, equivalent to a 4.4 per cent decline overall.

There were also 40,000 fewer self-employed workers, according to the report.

Youth can’t find work

Shaziah Jinnah Morsette, president of the University of Calgary Students’ Union, has been seeing students at her university struggle to find employment first hand. She says one in five students it recently surveyed have been able to find full-time work this summer.

“Often, this isn’t just summer full-time work that they want; it’s summer full-time work that they need,” said Jinnah Morsette, whose union represents over 28,000 undergraduate students. “That cost-of-living crunch, that affordability crunch is being really felt by post-secondary students, and has been for years.”

Jinnah Morsette says, in order to make ends meet, students will often settle for jobs that don’t develop skills relevant to their field of study or the careers they’re pursuing.

Dawn Desjardins, chief economist at Deloitte, says this is not uncommon.

“You do get those first jobs where you’re really learning skills that you don’t necessarily have from your education,” she said. “So yes, I think there’s a mismatch in a lot of ways across the economy in the labour market.”

However, Desjardins believes that the reality is not as “deep and dark” as it first appears, and should not be an immediate cause for concern.

“We see a lot of volatility in these numbers,” she said.

In Alberta, the youth unemployment rate was 11.3 per cent this May — double the overall provincial unemployment rate of 5.7 per cent, according to Statistics Canada.

Statistics Canada reports a particularly acute change in youth employment for returning students, especially young women between the ages of 20 and 24. In this group, although 69.5 per cent were employed in May 2022, only 63.8 per cent are employed as of this May. That is four per cent lower than the pre-pandemic rate recorded in May 2019.

“The landscape has changed,” Jinnah Morsette said. “This isn’t anything like 25 years ago where you could easily find a job over the summer [and] work to pay your year of tuition ahead.”

She said that the need to work increased hours takes students’ time away from extracurriculars, volunteering and their studies — all experiences that assist students when looking for jobs after graduation.

“Students aren’t able to access those things because they’re having to choose to take on those extra hours to continue to cover their bills,” said Jinnah Morsette. “That does take a toll — not only on their grades, but also on their mental health and their well-being.

“That leaves the Alberta economy behind — it leaves our Canadian economy behind.”

Service surge?

Although unemployment rose overall this past month, certain industries experienced job growth — including accommodation and food services, which gained 10,000 jobs in May.

“We are seeing people come to the doors asking for work,” said Denis Pires, general manager of the restaurant Bairrada Churrasqueira in Toronto. “However, they’re not qualified for the positions that we’re looking for.”

But compared to last year when there were fewer customers and more safety concerns from staff because of the pandemic, Pires says the atmosphere has changed. At their restaurant, the challenge now is the need to spend additional time and resources to train the new hires.

“The government stimulus has stopped, which is a big thing,” said Pires. “I think that is promoting people to look for jobs and be more serious.”

David Glantz, the owner of Archive Tattoo in Toronto, is looking to hire one more team member, but he isn’t too concerned.

“We’ve always hired for talent over over names,” he said. “Hiring was never really a tough thing.”

Since the pandemic, however, Glantz says they have moved away from a percentage-based system of earnings to a more flexible model.

“We’ve chosen to adapt to a new direction where everyone pays the chair fee for their space and that way they can sort of manage their own schedules,” he said. “If people work as much as they want to, they have the ability to control their own income, which can work out exceptionally well for them.”

Interest hikes could slow

Economists say that this rise in overall unemployment casts doubt on future interest rate hikes from the Bank of Canada.

“While one weak labour market report doesn’t make a trend, the [Bank of Canada] will be closely watching to see if other cracks start to form,” James Orlando, senior economist for TD Bank, wrote in an email.

Jay Zhao-Murray, an analyst for Monex Canada, said in a note because of the “details and composition of employment changes, we do not think it would materially change the Bank’s latest view on the economy.”

WATCH | How low unemployment can drive inflation: 

Why too many high-paying jobs make inflation go up | About That

2 months ago

Duration 5:51

Some 22,000 new jobs were added to the economy last month. The Bank of Canada believes this number is too strong. Andrew Chang talks with Stephanie Hughes from the Financial Post to understand how the numbers are throwing a curveball into the economy.

But one month of a weakening jobs market may not be enough.

“The Labour Force Survey is notoriously volatile,” Royce Mendes, managing director and head of macro strategy at Desjardins, wrote in an email. “It would need to be corroborated with a host of additional information to change our view that the Bank of Canada will hike again in July.”

“When things will kind of slow down a bit, we’ll be judging through a whole set of measures, trying to figure out whether things happen,” said Bank of Canada Deputy Governor Paul Beaudry in a speech to the Victoria Chamber of Commerce on Thursday. “But we won’t only look at one measure.”

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MONTREAL –

Air Canada says it made a mistake in rejecting some compensation claims from the thousands of travellers affected by delayed flights due to computer malfunctions.

In messages to some customers, the airline initially said the information technology fumble was out of its hands, relieving it of obligations to pay them compensation.

“In this instance, the compensation you are requesting does not apply because the disruption was caused by an event outside of our control. This flight is delayed due to an unforeseen technology issue, impacting one of our suppliers, which is impacting our operations,” the airline said Thursday in an email to passenger Douglas Judson.

Judson said he arrived more than three hours late after his June 1 flight from Winnipeg to Toronto was delayed due to the IT defect.

“I find the dishonesty and disrespect of it the most galling,” he said in a phone interview. “Some really interesting logic puzzles at Air Canada as to when something is actually their fault.”

While denying his compensation request, Air Canada offered him a 15 per cent fare discount on any upcoming flight as a “goodwill gesture.”

When contacted by The Canadian Press on Friday, the Montreal-based airline said the response stemmed from an error.

“Air Canada is offering compensation in line with APPR (Air Passenger Protection Regulations) compensation levels for flights which were affected by the IT outage. Some passengers had received erroneous responses from us, and we are in the process of re-contacting them with the correct responses,” spokeswoman Angela Mah stated.

The country’s largest carrier has struggled with intermittent computer problems over the past few weeks.

On May 25 it delayed more than half its flights due to a “technical issue” with the system that the airline uses to communicate with aircraft and monitor their performance. On June 1 it delayed or cancelled more than 500 flights — over three-quarters of its trips that day, according to tracking service FlightAware — due to “IT issues.”

That same day, Transport Minister Omar Alghabra stressed the carrier’s compensation responsibilities to its guests.

“Air Canada has obligations to passengers who are impacted because it is caused by things that the airline has control over,” he told reporters June 1, hours after the IT issues resurfaced.

Alghabra spokeswoman Nadine Ramadan said in an email Friday the minister’s office had been in touch with the company, which assured them it will compensate the affected passengers.

Gabor Lukacs, president of the Air Passenger Rights advocacy group, said the airline’s response “rings hollow.”

“We are hearing about too many of these ‘errors’ to believe that it was a genuine error,” he said in an email.

Lukacs suggested Air Canada’s response — including the discounted fare offer — marked “an attempt to make passengers go away and not pursue their rights.”

It was not clear whether the thousands of passengers whose flights were delayed or cancelled the day after the June 1 computer problem — Judson’s included — due to what the airline deemed “rollover effects” would receive compensation.

“They said in their official communications to passengers that it was maintenance. I do not believe it was maintenance. I think it was a direct consequence of their IP issues,” Judson said, noting that his return flight to Winnipeg landed more than three hours behind schedule.

Air Canada’s Mah said the airline would “investigate to determine the root cause of the cancellation and handle accordingly.”

At least 144 of its flights, or 27 per cent of the airline’s scheduled load, had been delayed as of late afternoon on June 2, along with 33 cancellations, according FlightAware.

In April, Alghabra laid out measures to toughen penalties and tighten loopholes around traveller compensation as part of a proposed overhaul of Canada’s passenger rights charter.

If passed as part of the budget bill, the reforms will put the onus on airlines to show a flight disruption is caused by safety concerns or reasons outside their control, with specific examples to be drawn up by the Canadian Transportation Agency as a list of exceptions around compensation.

“It will no longer be the passenger who will have to prove that he or she is entitled to compensation. It will now be the airline that will need to prove that it does not have to pay for it,” Alghabra said on April 24.

Currently, a passenger is entitled to between $125 and $1,000 in compensation for a three-hour-plus delay or a cancellation made within 14 days of the scheduled departure — unless the disruption stems from events outside the airline’s control, such as weather or a safety issue including mechanical problems. The amount varies depending on the size of the carrier and length of the delay.

This report by The Canadian Press was first published June 8, 2023.

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Canada is seeing its worst-ever start to wildfire season, with blazes ravaging much of the country and creating hazardous smoky conditions across the continent and beyond.

After reaching New York earlier this week, on Thursday it blanketed Washington, DC, in an unhealthy haze, prompting many residents to stay indoors.

Here is what we know about the wildfires, their trajectory and climate change.

What started the Canadian wildfires?

Atlantic Canada received low snowfall this winter, followed by an exceptionally dry spring.

Nova Scotia’s capital Halifax received just 120mm of rain between March and May, roughly a third of the average, according to The Weather Network meteorologist Michael Carter.

A scorching late May heatwave pushed temperatures in Halifax to 33C (91.4 F) on Thursday, about 10 degrees Celsius above normal for this time of year.

The wildfires are believed to have been caused either by lightning, as in the case of Quebec, or accidentally by human activity.

Ellen Whitman, a research scientist with the Canadian Forest Service, said there is also speculation that trees felled during Hurricane Fiona, which hit Atlantic Canada in September 2022, or killed by an infestation of forest pests may be providing more fuel than usual for wildfires, but that theory requires further investigation.

While the focus has been on the smoke in eastern North America, fires continue to rage in western Canada.

This view from yesterday in British Columbia. pic.twitter.com/3jUXxYPpwu

— CIRA (@CIRA_CSU) June 8, 2023

Are the wildfires under control?

Not yet.

As of early Friday, there were 427 active wildfires, according to the Canadian Interagency Forest Fire Center; of those, 232 were out of control.

In the West Coast province of British Columbia, authorities reported 81 active wildfires – 28 out of control – while in the province of Alberta, authorities reported 72 active wildfires.

Quebec, on the country’s eastern side, has 128 active fires.

The fires have spread across about 4.3 million hectares (10.6 million acres), roughly 15 times the annual average of the past decade.

Where are the Canadian wildfires?

The forest fires started in late April in British Columbia and Alberta, displacing more than 30,000 people at their peak, and shutting down oil and gas production.

They have now opened new fronts, spreading to the eastern provinces of Nova Scotia, Quebec and Ontario.

Currently, Canada is receiving international help to battle the wildfires. Help has come from the United States, South Africa, Australia and New Zealand. In Europe, France, Portugal and Spain were also sending more than 280 firefighters to Canada.

How are the fires affecting air quality?

On Thursday, authorities in Washington, DC, issued a “Code Purple” air quality alert, warning of “very unhealthy air conditions for the entire public, not just those with respiratory illnesses”.

New York again had the worst air quality on Thursday morning, with an unhealthy Air Quality Index reading of 185, according to a website operated by IQAir.

Readings over 100 are classified as “unhealthy”, and those exceeding 300 are “hazardous”.

On Wednesday, authorities in Canada said Ottawa’s air quality was among the worst.

Experts have noted that acrid clouds of smoke and ash could continue to affect daily life for people in the US and Canada for the next several days.

Why is the smoke reaching so far away?

Strong winds high in the atmosphere can transport smoke long distances, and it is common for large, violent fires to create unhealthy conditions hundreds of kilometres away from where forests are burning.

In Canada, air is circulating counterclockwise around a low-pressure system near Nova Scotia. That sends air south over the fires in Quebec. There the air picks up smoke, and then turns east over New York state, carrying smoke to the eastern seaboard.

The smoke has now also been detected thousands of kilometres away in Norway, the Scandinavian country’s Climate and Environmental Research Institute NILU said on Friday.

“Very weak” concentrations of smoke particles have been detected since Monday, in particular at the Birkenes Observatory in southern Norway, researcher Nikolaos Evangeliou told AFP news agency.

What is the outlook?

Warm, dry conditions are forecast to persist for months across Canada though occasional rains and cooler temperatures are expected to bring short-term relief.

The Weather Network’s longer-term forecast expects Nova Scotia temperatures to be slightly warmer than normal for the rest of the summer.

What role is climate change playing?

Whitman of the Canadian Forest Service, said it is difficult to determine the effect of climate change on a single fire season. Atlantic Canada has been much hotter than usual and scientists expect temperatures in the region to continue to rise in the coming years.

For coastal regions, climate change is expected to bring more rain, which should reduce the risk of wildfires, but a warmer atmosphere is more efficient at pulling moisture out of soils, a factor that increases fire risk.

Widespread spring fires across the whole of Canada are also unusual, and research shows fire seasons across North America are getting longer.

A warming planet will produce hotter and longer heatwaves, making for bigger, smokier fires, according to Joel Thornton, professor and chair of the Department of Atmospheric Sciences at the University of Washington.

I have never seen a vertical wall of smoke like this one near Fox Creek, Alberta on Sunday.

And the strangest thing about this moment was I couldn’t smell any smoke. #ABfire #ABfires pic.twitter.com/I6vmJvUay4

— Kyle Brittain (@KyleBrittainWX) May 17, 2023

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