Three distinct markets for Canadian Labour

On September 5, Statistics Canada released its most recent labour force survey indicating that the unemployment rate in Canada remained unchanged at 7.0%. There are many economic indicators suggesting that the Canadian economy is not functioning at full speed. For example, the unemployment rate of the 2006-2008 period stood closer to 6%.

Interestingly, the notion of slack in the Canadian economy is not necessarily a national concept. There appears to be three distinct markets across Canada. And that suggests different strategies for businesses depending on their location.  

In central Canada, the unemployment rate is 7.4% in Ontario and 7.7% in Quebec, slightly above the overall rate of 7.0%. The labour market remains extremely tight in the Prairie Provinces, with unemployment ranging between 4.2% in Saskatchewan and 5.5% in Manitoba. The lowest rate of unemployment is in the Swift Current region of Saskatchewan, with an unemployment rate of 2.7%.

Conversely the labour market is relatively weak in Atlantic Canada, with unemployment ranging between 8.7% in New Brunswick and 13.5% in Newfoundland and Labrador.  

One trend that is consistent across all provinces is that growing demand for labour across all sectors is increasing pressures for agricultural producers to improve labour efficiency. Statistics Canada’s Labour Survey reveals that paid workers in agriculture have fluctuated very little over the years. Farm consolidation however has resulted in lower agriculture self-employment. Total farm labour is down, a testimony of the sector’s ability to innovate and increase productivity. Agriculture employment remains especially important in Saskatchewan where it represents 8.3% of total employment.

The labour market like any other market is influenced by demand and supply conditions. A tight supply of available and qualified workers in one region will place upward pressure on wages in that region. Over time this will lead to a migration of workers from one region to another.

There are three distinct labour markets in Canada. This may result in challenges in finding qualified labour in some regions. Businesses that are looking to grow should emphasize recruiting and retention efforts, particularly in the Prairies.  

Craig Klemmer – Senior Agricultural Economist