Canada’s Job Recovery: Best in Show?

Last Updated on septembre 21, 2016

History is clear: The Harper government’s record on job creation is the weakest of Canada’s past nine prime ministers.  However, is it the best job creation record we could have right now, given how so many nations are struggling with the enduring impact of the 2008 global economic crisis? When it comes to recovery, are we the best in show in the G7? That depends on what you measure.

Among G7 countries, Canada can boast the biggest growth in the labour market (job seekers and workers) and the second biggest growth in the number of jobs since the recovery began in 2009. We fall in the middle of the pack when it comes to growth in the employment rate (that compares growth in the number of jobs to growth in the working-age population).

Canada’s performance also looks better if you start the clock from the depth of the recession, in July 2009, rather than before the recession hit. Even so, conditions have soured over the past year, partly because of economic turbulence in China (which was the biggest horse pulling our cart early in our recovery), partly because the U.S. economy has picked up speed, but importing less from Canada than expected. The global economy, and Canada’s, continues to have its growth outlook downgraded.

The job creation track record, full and part time, shows that since July 2009, the Canadian economy stopped contracting and started growing again. The recovery has been propelled by full-time job growth since early 2011, but the overall pace of job creation (full and part time) is slowing down, and may stumble further if the current mild recession doesn’t slip away soon.

Between 2013 and 2014, the Canadian job market added about 110,000 full- and part-time jobs. 2014 also saw the addition to the labour market of 165,000 economic immigrants and 292,000 workers with temporary work permits.

Since the depths of the recession, over a million full-time jobs were added to the Canadian labour market (an 8.5-per-cent increase between July 2009 and July 2015), and 132,000 part-time ones (a 4-per-cent increase).

While a healthy 255,000 full-time jobs have been added to the mix over the past year, 94,000 part-time jobs disappeared, reversing gains made since late 2013.

Where are the jobs being generated?

Ontario produced the largest share of new jobs since 2009 (44 per cent) and over the past year, it accounted for 55 per cent of Canada’s new full-time jobs, well beyond its share of the job market.

It’s true that for most of the recovery, Alberta has punched above its weight, contributing 23 per cent of all net new full-time jobs. Over the past year, however, it’s only been responsible for 9 per cent of full-time job growth, less than its share of Canada’s full-time jobs (13 per cent) because of plunging oil and gas prices.

Some provinces haven’t seen any growth in full-time jobs since the recovery began (New Brunswick, Nova Scotia and Prince Edward Island). Some have seen a drop in full-time jobs over the past year (P.E.I. and Saskatchewan).

Since 2009, Quebec has accounted for 55 per cent of the growth in part-time employment. Over the past year, Ontario alone accounted for two-thirds of the nation’s losses in part-time jobs. Only Saskatchewan has added more part-time positions to the mix in the past year, but not at a scale that could offset the headcount of lost full-time jobs.

Who’s getting the work in this recovery?

When looking at the proportion of people working by age group, it can be seen that job recovery has been skewed toward Canadians aged 55 and over. Young people have seen almost no increase in their employment rate and the quality of those jobs has deteriorated. This is all the more striking because the young population (aged 15-24) did not grow, while the population of those aged 55 and over has grown by 22 per cent since 2009.

While there was a bigger, more prolonged drop in the employment rate of young workers in the wake of the 1990–1992 recessions, today’s young workers started off from a lower level and have, as yet, not seen any « recovery. » However, thus far, this recovery has been notable in its absence of job growth and steady job opportunities for young people. Over the course of the past year, they lost 31,000 part-time jobs and added almost no new full-time jobs.

Why are today’s young workers so much worse off?

The primary source of employment for young workers has been in temporary forms of work (contract, seasonal, casual). Between 2008 and 2014, about half a million permanent jobs were added to the economy (466,000). In that time, workers aged 15-24 saw the loss of 181,000 permanent jobs.

Are wages stagnating?

There has been much debate as to whether people are better off despite the recession. Much of the debate is a confusion of whether we are talking about wages or earnings.

Average hourly wages, adjusted for inflation, were indeed improving right through the recession until about a year ago. Average wages include hourly pay rates of employees who are managers and executives. Since 2013, average wages have flattened out most likely because the majority of workers have been losing ground.

Median hourly wages (which represent workers’ pay rates in the middle of the wage distribution) has experienced a downward trend in median hourly pay rates has continued in the first part of 2015, adjusting for inflation. This means at least half the Canadian workforce is experiencing a reduction in rates of pay, possibly attributable to the recent reduction of work in high-paying sectors of the economy such as oil and gas and other resource extraction activities.

Globally this recession has proved difficult to shake. Canada’s economy benefitted from being far better endowed with natural resources than other G7 nations, permitting us to ride the coattails of resource-gobbling giants like China for most of the recovery period. Those days are over.

Slow growth is on the menu for as far as the eye can see. If it goes on much longer it will collide with population aging.

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