Canadian Manufacturing

Calgary’s jobless rate surpasses that of embattled Windsor, Ont.

BMO chief economist Doug Porter says that for years, Windsor had the highest unemployment rate in the country



CALGARY—The tale of two Canadian cities seems to have been turned on its head, with the unemployment rate in Calgary surpassing that of Windsor, Ont.

Statistics Canada job figures for February show an unemployment rate of 8.4 per cent in Calgary, the epicentre of the country’s oil wealth before the latest crude crash.

In Windsor, hit hard by the downturn in the automotive sector in recent years, the jobless rate was at 7.7 per cent last month.

“That is almost unheard of,” said BMO chief economist Doug Porter. “For years, Windsor had the highest unemployment rate in the country.”

Porter said the figures highlight a major “regional and industrial turnabout” over the past 18 months.

But Mike Moffatt, an economist with Western University’s Ivey Business School in London, Ont., cautioned against making too much of the February data, which showed a drop of 1.6 percentage points from January’s 9.3 per cent jobless rate in Windsor.

“It’s very unusual to have such a sudden drop in a single month and when we’ve seen that in the past, more often than not it will correct itself a few months later.”

He also noted the small sample size in the Windsor Labour Force Survey, which makes it prone to statistical blips from time to time.

However, things have been gradually improving in southwestern Ontario over the last 18 months or so, Moffatt said.

For example, Fiat Chrysler Automobiles announced last month that it had hired 1,200 additional workers at its Windsor assembly plant, which has begun producing the new Pacifica minivan.

Meanwhile, in Alberta, licensed insolvency trustee Freida Richer has been getting busier and busier as laid-off workers exhaust severance packages and employment insurance.

“Last year, we started to see that uptick in the number of filings and certainly in the number of phone calls we’ve been getting,” said Richer, with Grant Thornton’s Edmonton office.

“The tone of my discussions with people now certainly, year-to-date, is that there’s a little bit more desperation in the air and frustration because they’re running out of money and they’re ending up having to default on payments.”

Alberta Premier Rachel Notley said the province is going through the roughest patch it has seen in decades.

“Even the ’80s may well not be as troubling as what we’re dealing with now,” she said in Red Deer, Alta.

But ATB Financial chief economist Todd Hirsch said there’s one major difference between the situation three decades ago and now—there’s little risk of a housing collapse because interest rates are low.

Hirsch said many were “dumbstruck” by news Alberta had a 7.9 unemployment rate in February, up from 7.4 in January, but that it’s important to dig further into the numbers.

For instance, the province actually added a small number of full-time jobs between January and February. Hirsch said the higher unemployment rate is likely a function of the labour force as a whole growing, as households that might have once relied on a single outcome see a second adult enter the job market during the downturn.

Over the long term, the data has shown a steady decline in oil and gas jobs, but it’s been more choppy in other sectors, said Hirsch.

“I do think over the next four to six months we’re going to see further deterioration in the job market,” he said. “I think that will stabilize toward the second half of 2016, but I don’t think we’re through with the roughest patch in the job market yet.”

Related Posts from the network