Huge employment gains for Canadian economy

OTTAWA—Canada’s manufacturing sector contributed to an overall 22,000 new jobs created last month, according to Statistics Canada.

Full-time jobs increased by 38,000 in December to make up 81 per cent of the country’s total employment.

Ontario added 23,000 new jobs, pushing its unemployment rate down to 8.1 per cent. There were 25,000 new positions added in Quebec and 2,500 in Newfoundland.

Most of the other provinces experienced little change and B.C. lost 23,000 jobs.

Canada’s unemployment rate held steady at 7.6 per cent and there were job losses in industries such as agriculture, construction and wholesale and retail trade.

But manufacturing, which had seen a decline of 29,000 jobs the previous month, added at least 66,000 new jobs.

Related sectors such as natural resources and transportation and warehousing also created jobs—7,700 and 45,000 respectively.

Canadian Labour Congress chief economist Andrew Jackson called today’s numbers “extremely good news” for Canada’s manufacturing sector and credited some of the employment growth to new government programs.

“Green energy policies being pursued in Ontario and Quebec, where most of the manufacturing growth took place, are having an impact,” Jackson said.

“Ontario’s feed-in-tariff program is creating more renewable energy projects and components are being produced here, in areas that were particularly hard hit by lay-offs during the recession,” he said.

“But the question that remains is whether this manufacturing growth continues, now that the dollar is trading above parity and the US economy is still weak.”

His caution echoed the findings in a recent TD Bank report, which noted that despite December’s job gains, Ontario, Alberta, Nova Scotia and New Brunswick are all still below pre-slump employment levels.

The report added that the Ivey purchasing manager’s general index of large manufacturers fell by 7.5 points in December to 50.0, the lowest level in a year.

The employment gauge also dropped to 47.3, the lowest since last February.

The report said Canadian factories and exports will likely continue to struggle under the weight of a strong dollar.

Paul Ferley, RBC assistant chief economist, was more optimistic about today’s StatsCan data.

“This is consistent with the Bank of Canada’s forecast that the Canadian economy is continuing to expand and it eases some of the downside risks,” he said.

One of the main concerns has been the economic environment in Europe and the US.

But Ferley pointed to today’s report from the US Labour Department, which found 103,000 new jobs were added there last month.

“The numbers weren’t as strong as some individuals were expecting but they still reflect a modest growth,” Ferley said.

“And we saw a very strong gain in manufacturing here which could well reflect the strengthening of the US economy, especially in auto production,” he said.

Canadian Auto Workers‘ President Ken Lewenza agreed the December job gains were “significant.”

“Manufacturing is one of the most important sectors of the Canadian economy and this kind of growth is the largest we’ve seen in excess of 20 years,” he said.

However he added, “if we want a sustainable manufacturing sector, we’re going to have to start negotiating with reciprocal trade, not free trade.”

Lewenza also said that when dealing with emerging economies, Canada must insist that labour standards, environmental and health and safety legislation are “on a level playing field.”