Published: Sat, February 10, 2018
Research | By Clarence Powell

Canada suffers biggest job loss in nine years

Canada suffers biggest job loss in nine years

A media release from the province Friday showed employment is up 1,100 from the previous month, with 6,200 full-time jobs created month-over-month in Saskatchewan.

Del Duca, who took over the portfolio in a recent cabinet shuffle as Premier Kathleen Wynne positioned her government for the June 7 election, said the fact that Ontario's unemployment rate remained steady at 5.5 per cent is a sign economic growth is "strong and sustained".

Ontario, which increased its minimum wage in January, was the biggest loser in January, shedding 50,900 jobs in the month.

The number of jobs in Canada fell by 88,000 last month to give the labour market its steepest one-month drop in nine years.

"If you take a six-month average, you're still sitting pretty close to 20,000, which is what people generally view as being consistent with a Canadian economy that's either at trend or slightly above trend from the rear-view perspective", David Tulk, Toronto-based institutional portfolio manager at Fidelity Investments, said by phone. Most of the other provinces also shouldered part-time losses, with Quebec shedding 31,000 positions.

In a labour force of 39,200, this region saw 37,700 people employed in January - while 1,500 were unemployed.

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"The Canadian economy experienced a very large setback in January ... but it also needs to be kept in perspective - we had outstandingly strong job growth over the course of past year", Craig Alexander, chief economist for the Conference Board of Canada, said in an interview.

The decrease of 88,000 jobs fell well short of economists' forecasts for a gain of 10,000 and made for the biggest decline since January 2009 when the economy was dealing with the global financial crisis. It is not unusual to see a city's unemployment rate rise during stronger economic times as more people join the labour because the chances of finding work are better.

Wage growth also received a boost in January, a month that saw Ontario lift its minimum wage. Halifax had an unemployment rate of 6.8 per cent in January, down from seven per cent in December. Pay started to increase late summer and accelerated to as high as 2.8 per cent in November.

Yet, in most cases, the data suggest the greater proportion of employees with hourly wages at or below C$14 in December, the greater the declines in January.

The biggest question from Friday's disappointing Canadian employment report is how much can be traced to Ontario's sharp minimum wage increase last month.

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