Canada’s job market entered choppy waters last month, and the impact from tariffs have yet to be felt. Statistics Canada (Stat Can) data shows employment fell in March, with job losses concentrated in private sector employment. Unemployment has already been tracking significantly higher than pre-2020. However, fewer jobs and more people experiencing long-term unemployment boosted the rate even higher, reversing minor progress in recent months.
Canadian Employment Slipped Last Month, Entirely Private Sector
Canadian employment pulled back last month. Employment fell by 33k jobs (-0.2%) to 20.96 million in March. The decline was almost entirely due to private sector job losses (-48k; -0.3%), more than the headline loss. That indicates the blow was softened by more public sector expansion.
Job losses were concentrated mainly in Ontario (-28k jobs; -0.3%), and Alberta (-15k; -0.6%). On the flip side of the stat, Saskatchewan (+6.6k jobs; +1.1%) helped soften the blow at the national level.
Canadian Unemployment Rises, Long-Term Rate Surges
Seasonally adjusted unemployment in Canada.
Source: Stat Can.
Unfortunately, it doesn’t appear that the lost employment was just folks retiring. The unemployment rate climbed 0.1 points to 6.7% in March, returning to December’s level. The rate remains roughly a point higher than 2019. It’s worth recalling that one needs to be considered ready, willing, and able to work to be considered unemployed. That means full-time students and those not actively pursuing employment are excluded, even if they need work.
The first thought is that tariffs played a role, but that doesn’t appear to be the case. Only 14.7% of unemployed people exited unemployment last month, a drop of nearly 4 points compared to last year. At the same time, nearly 1 in 4 (23.7%) unemployed have been searching for work for at least 27 weeks, up 5.4 points from last year. That means they fit the definition of long-term unemployed, increasing the likelihood they will need re-training to enter the workforce.
Bluntly put, the unemployment churn is a lot slower than usual for Canada. Fewer people can exit the issue, helping the number snowball. An issue that started last year, but can get worse if the trade war doesn’t resolve amicably soon.
The multi-block line ups to apply for jobs around the city tells me it’s a lot higher than just a point above 2019. How do they even estimate this data?
Just hire them in the government. Problem solved!!
Everyone will be rich. Drop rates to 0% too to pump up house prices!!
#canadastime
Doug Porter of BMO Capital Markets claimed that “private sector jobs accounted for all of the overall [job] losses”, which isn’t strictly true since there were three thousand jobs lost in the public sector. The number of self-employed jobs, generally precarious and poorly remunerated, tend to be up and down like a yo-yo, and in March there were 18 thousand jobs added, while there were 51 thousand employee job losses.
Over the course of the year, there was a 2.1% increase in public sector jobs but only a 1.3% increase in private sector jobs, and this reflects a continuing trend. Is this really a healthy evolution for our labour market? Everyone can’t work in the public sector.
As Better Dwellings has noted before, the LFS treats a foreign student as employed if he has a job but as not participating in the labour force if he loses it, even if he is looking for work. Given that the participation rate dropped from 65.3% to 65.2%, part of this may be due to job losses among foreign students.
For whatever reason, StatCan does not seasonally adjust its very useful alternative unemployment rates. R3, which adjusts the unemployment rate to US concepts, went from 5.8% in February to 6.1% in March. The American unemployment rate unadjusted for seasonal variation was 1.9 percentage points lower than this, the biggest negative discrepancy for the month of March since the year 2000.