Canada’s labour market no longer needs the same pace of hiring to keep unemployment stable, but the picture varies considerably across the country, according to a new report from TD Economics.
The report explains that slower population growth and a weaker expansion of the labour force have reduced the country’s overall break-even job growth rate—the number of new jobs needed to prevent the unemployment rate from rising. As a result, employment across Canada can now remain relatively flat without necessarily leading to higher unemployment.
However, TD Economics notes that national figures mask important regional differences.
In Ontario, Quebec and British Columbia, labour force growth has slowed to the point where employers could reduce payrolls modestly without significantly increasing unemployment, as fewer workers are entering the job market.
The situation is different in Alberta and parts of Atlantic Canada, where populations and labour forces continue to grow. In those regions, employers still need to create a steady number of new jobs to absorb additional workers and keep unemployment from rising.
According to the report, these provincial differences are becoming increasingly important as Canada’s economy moves through a period of slower growth and adjusts to a sharp slowdown in population expansion.
TD Economics says the key to labour market conditions in the months ahead will be a focus beyond national employment numbers. Hiring needs are likely to continue to vary across provinces according to local demographic and economic trends.
