The Other Shoe Drops

Generally in recent months and particularly in November, there were pronounced job losses in the province of Ontario and the manufacturing sector. In December, the Ontario and manufacturing numbers did not change much. But job losses spread to other provinces and the construction sector. In effect, the only remaining bright spots in Canada’s labour market have been extinguished.

Even adjusting for seasonality, construction employment fell by 44,000 in December, accounting for all of the national decline in employment. Total employment dropped by 9,000 in Quebec, 16,000 in Alberta, and 8,000 in British Columbia.

The sharp decline in construction employment reinforces the need for more public infrastructure investment. Also, the federal government should remove its requirement that projects receiving federal funds be organized as public-private partnerships. Private capital is now in extremely short supply and requiring that it be obtained will unduly delay needed infrastructure spending.

Full-time vs. Part-time

The loss of full-time employment was especially severe in December. Strikingly, Quebec lost 49,000 full-time jobs and Alberta lost 20,000 full-time jobs.

The country as a whole lost 71,000 full-time jobs, almost twice as many as last month. But there were 36,000 more part-time jobs, reducing the overall employment decline to 34,000.


The number of Canadians officially recognized as being unemployed rose by 47,000 in December. The total now exceeds 1.2 million for the first time since May 2005.

The national unemployment rate jumped to 6.6%, its highest level since January 2006. In terms of unemployment, three years of improvement have been erased.

These figures again reinforce the need for a better Employment Insurance system. It is increasingly doubtful that the new Employment Insurance financing regime instituted in Budget 2008 will survive the labour market downturn.

UPDATE (Jan. 10): Globe and Mail and Canadian Press coverage


  • We also have to remember that 6.6% unemployment is relatively good compared to past recessions. I would also add that as a compensation person, I am seeing data that shows “good employer” salary growth still being above inflation, but less so than in the past. Which means that in many workplaces, things are getting better at a slower pace.

    While we should truly be sympathetic about those who are currently hurting, many hundreds of thousands of people will lose their jobs before we develop sense of universal pain warranting collective sacrifice.

    Ideally we need to keep our eyes on the big prize, which is a broader (and decades-long) shift in the political mood, as happened with the FDR new deal. For example, if the coalition kicked out Harper and brought in a stimulus budget, that would be a good start. If Krugman can motivate congress and senate to block the Gupta appointment, that would be a good signal. If we can get journalists to use ironic quotation marks when they talk about a tax-cut “stimulus” (as they did with “fiscal imbalance”), then that would be good as well. Let’s look out for P3s failing for liquidity reasons (i.e. regardless of our verbal protests). Maybe some monoline insurance companies could go bust. Lawsuits against bond raters for lying about how much they knew about risks. We have to trigger some kind of snowball effect.

  • We had been waiting for this decline. Now with commodity prices in the doldrums this monthly decline in construction could be the tipping point in creating a wider spread in the economic decline from a seemingly regional, to now a national issue.

    One month does not make a trend, especially with this LFS, however it could be the beginning of the bust in construction that we on this blog had been predicting.

    I will be starting work on the Precarious Work Index in February. If anybody would like to join the project as an advisor or would like to help out, email me at the address on my website. I have a small core group ready to go.

    It is time to design a legitimate measure that can reach deeper into the dynamics of employment change. There is plenty of potential with this data source to complete a precarious work index.

    I will be posting at my website for updates on the project.


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