Canadian Economy Unable To Create Enough Jobs For Population Growth: BMO

The Canadian economy surprised with huge job gains last week. Statistics Canada (Stat Can) data shows tens-of-thousands of jobs were added in April. Despite a near-record gain, BMO warned investors the market isn’t as healthy as it sounds. Canada’s booming population growth meant the job gains failed to meet minimum requirements. As a result, the country’s unemployed population further expanded. Over the past year, the data implies just 1 in 3 new workers found employment at the margin. Not exactly supporting the boom-time narrative. 

Canada Added 90k Jobs Last Month… But 107.5k Workers 

Let’s start with what you heard—Canada’s job market added a near-record volume of jobs last month. Seasonally adjusted, April saw a net increase of 90k jobs, making it one of the biggest months ever. A point that influenced near-term expectations, and policymakers even bragged about. 

However, there was a caveat—Canada’s population growth outpaced new jobs. Stat Can data shows a net gain of 107.5k workers over the same period. The unemployment rate was reported as flat, but actually rose a slight 0.05 points. Record population growth requires record job gains just to break even. Job gains were far from actually meeting the demand for jobs created via immigration. 

Source: BMO. 

The Bank of Canada (BoC) interpretation of this data is up for debate. Are job gains enough to delay cuts, like the US Federal Reserve is currently debating? Or will the central bank note this isn’t enough to meet job demand, and require stimulus? 

“Our view on Canadian employment reports is generally that they are so volatile that the Bank of Canada doesn’t read that much into them, and neither should we,” explains Douglas Porter, chief economist at BMO. 

Canada’s Unemployed Population Is Up 24%, Recession Typical At 25% 

Those looking for insights should focus on the longer trend, suggests Porter. He notes the general rule is the unemployed population growing 25% or more results in a recession. Canada is currently at 24% annual growth, just a point shy. Risk is building, just not in a traditional sense.

How is this possible with such huge job numbers? The bank’s analysis doesn’t mince words, and just cranks out the raw data. Canada may have added 377k jobs over the past year, but it also added 633k workers too. That’s 256k more workers than jobs, meaning less than 35% of net new adults found employment at the margin. 

“The bottom line is that the economy is simply not able to create enough jobs to keep up with population growth, and that was even the case in April,” concludes Porter. 

8 Comments

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  • Reply
    Ian Brown 1 day ago

    Isn’t this precisely what they wanted? Excess labor to drive wages lower.

    • Reply
      Omar 1 day ago

      Canada has to be the only country to say that out loud (immigration minister literally said this), and somehow the Liberal supporters have begun accusing anyone on the left or right that calls this out “racist.” Apparently it’s racist to not exploit cheap labor.

  • Reply
    Ahmed 1 day ago

    Cheap labor and soaring rents. Bring on the international students!

    • Reply
      RW 1 day ago

      Seriously though, when does targeting the population of a separatist movement become Canada’s liability?

      We think Indians are fleeing, but Indians think it’s hilarious that Canada is targeting a demographic they’re hoping leaves.

  • Reply
    David English 1 day ago

    Well, unfilled tech positions are DOWN to only 40,000 or so. So there’s that. It was 75,000 a while back. Overall, only 570,000 unfilled job vacancies now, according to StatsCan.

    By design, 60% of the immigrants we bring in are ones that have the skills necessary for these unfilled positions. That means if we keep this up for another year, we might have the people willing and trained to work and fill all those positions to get our economy working at full capacity.

    Bottom line, if you want a job right now but don’t have one, then you’re holding out for something. The work is there. 570,000 unfilled jobs.

  • Reply
    Gregory 14 hours ago

    This is government racism at its finest. The government itself are bigots against white colonials who created this country. White people to them are evil and must be replaced. When you bring 1 million plus people per year into a country in 20 years you will have entirely changed the demographics of that Nation. The only thing I can call this is blatant racism by our government and those in power.

  • Reply
    David English 10 hours ago

    I read a post from some Doctor in NZ. He had … expressed some dissatisfaction … with living in NZ. He got a cold-call from Canadian Immigration asking him if he wanted to come to Canada. That’s how aggressive Canada is looking for immigrants. That’s what our Immigration Services are doing for you.

    The fundamental Canadian problem is that you or your mother didn’t have enough kids. Now, there are too many old people retiring with not enough young people working to support them. It’s actually a problem in a lot of countries right now… Canada is quite middling in this. Nations are trying to fix this, and Canada is leading the way with “immigration as a solution.” If it works, it will be great. The old people get to retire and the economy will still function. That’s more than can be said for a lot of other nations.

    Long-term, AI and automation will do the work. But, it will be a decade or so before that really kicks in. Meanwhile, we need people that are willing and able to work. It’s not Immigration Canada’s fault that not enough people you think are the right colour are willing to move here. Maybe they think Canadians whine too much or something. I guess we can blame your mother for that too.

    No, that NZ Doctor didn’t move to Canada.

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