In December 2017, Canada produced another stellar month of job gains, with signs of tightening that include stronger wage increases and a surge in full-time employment. Highlights of Canada’s December 2017 job report include:
December’s numbers brought the data for 2017 as a whole to a close, which ended up being Canada’s best year for jobs since 2002, with 423,000 new jobs.
“Quebec was probably the most compelling story throughout the year, with job growth running strong and the unemployment rate plunging to a record low [of 4.9 per cent]” ~ Robert Kavcic, Economist at Bank of Montreal
Lowest Unemployment Rate in Over 40 Years
The unemployment rate, at 5.7% in December 2017, reached its lowest mark since comparable data became available in 1976. Statistics Canada says that employment in 2017 rose 2.35 for it fastest growth rate in 15 years. The Canadian economy added 422,5000 jobs in 2017 with the gains driven by 394,200 new full-time positions.
“Canadian job markets have been going from strength to strength.” ~Brian DePratto, Senior Economist at Toronto-Dominion Bank
Canada Unemployment Rate, 10 Year
Source: Tradingeconomics.com | Statistics Canada
There were more people working in the services-producing sector, led by finance, real estate, and insurance. Employment was also up in “other services” including educational services and transportation and warehousing. In the goods-producing sector, there were more people employed in natural resources and construction, while manufacturing was down.
Going Forward Into 2018
A new report issued by the Bank of Canada forecasts that the Canadian economy will lose 60,000 jobs in 2018 as minimum wage levels increase across the country. As of January 1st, 2018, Canada’s most populous province, Ontario, raised its minimum wage to $14 an hour from $11.60 previously. By the end of the year, Alberta, Quebec, and Price Edward Island are also expected to increase their minimum wage levels.
Economists have been debating on the likely impact that the increase in wages will have on the country’s economy, with some arguing that higher wages will cause a boost for the economy and others saying that the costs are too high and will result in employers scaling back on workers.
According to the models used by the Bank of Canada, the worse case scenario is that Canada will lose 136,000 jobs due to the higher minimum wages. “Although empirical evidence is mixed on the magnitude of minimum wage effects, most studies for Canada find that the reduction in employment is statistically significant, especially for younger workers” the Bank of Canada wrote in its report.
“The numbers are spectacular, but I think we would be hard pressed to come close to matching them in 2018.” ~Douglas Porter, Chief Economist with Bank of Montreal