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Canada’s jobless rate climbs as energy rout slams Alberta

Alberta's unemployment rate rose to 7.4 per cent in January, from 7 per cent in December.

Kevin Van Paassen/The Globe and Mail

Canada's jobless rate edged up to 7.2 per cent in January as Alberta and other resource-rich provinces took another hit from the plunge in oil prices.

Alberta lost 10,000 jobs last month and its unemployment rate surged to 7.4 per cent from 7 per cent in December, surpassing the country's rate for the first time in nearly three decades.

The western province suffered blows to agriculture, manufacturing, construction, culture, accommodation and professional services, according to Statistics Canada. This comes after a dismal year where the province lost the most jobs since the early 1980s recession.

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"While the shock has certainly been the largest for oil-producing regions, the knock-on effects from the drop in capital investment in Canada's oil sands has rippled through to other industries and provinces," Diana Petramala, an economist with Toronto-Dominion Bank, said in a note.

Over all, Canada shed 5,700 jobs in January, pushing the jobless rate up by 0.1 percentage point and missing analyst expectations as energy-related declines offset a spurt in public sector employment.

Other resource-dependent provinces also continued to suffer from weak commodities prices.

New Brunswick's jobless rate rose to 9.3 per cent from 8.9 per cent amid the closing of a potash mine. Saskatchewan's unemployment rate edged up to 5.6 per cent. Newfoundland and Labrador remained at 14.4 per cent.

More commodities-related layoffs are expected with the price of oil trading around $30 (U.S.) a barrel, down more than 70 per cent since mid-2014. Oil giants BP PLC and Exxon Mobil Corp. recently announced a fresh round of employment and spending reductions.

Nearly 22,000 full-time jobs vanished in Alberta last month, while almost 12,000 part-time positions were created. The number of involuntary part-time workers in Alberta is up 60 per cent over the year.

"This certainly indicates that a large number of people are taking on part-time work, but would rather be working full-time and cannot find full-time work," said Andrew Fields, an analyst with Statscan.

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Prime Minister Justin Trudeau said the federal government would fast-track infrastructure spending in the province, although no date was provided. Mr. Trudeau also vowed to make it easier for Albertans to qualify for employment insurance.

The oil slump has triggered mass layoffs in the energy sector and beyond. Average wages in Alberta are declining along with real estate prices. The country's largest private sector mortgage insurer warned that more Albertans were falling behind on their mortgage payments. Genworth MI Canada Inc. said Friday it expects mortgage delinquencies to rise.

Ontario was the only province to see job expansion, with 20,000 new positions created last month, according to Statscan. Most of the increases were in trade, education, and accommodation and food services.

Ontario and British Columbia are two regions expecting economic growth of more than 2 per cent this year.

That has led to job seekers from Alberta to flock to those two provinces. British Columbia's government is holding job fairs in Alberta.

"We are working hard to recruit Alberta workers and then giving them additional skills that they need to come to B.C. and not get social assistance but to get real jobs," B.C. Premier Christy Clark said during a visit to Ottawa this week.

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In the United States, 151,000 jobs were created in January and the jobless rate eased to 4.9 per cent, an eight-year low.

With files from reporter Shawn McCarthy in Ottawa

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About the Author
Economics Reporter

Rachelle Younglai is The Globe and Mail's economics reporter. More


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