File photo of an oil sands worker in Fort McMurray, Alta.TODD KOROL/Reuters
More Canadians are collecting employment insurance benefits, especially in Alberta.
The total number of EI recipients has risen for five successive months, and although Alberta is driving much of the gains, all provinces have seen increases in that time. Across Canada, EI numbers hit a one-year high of 521,340 people in April, Statistics Canada said Thursday.
Lower oil prices have dented Alberta's labour market – and weighed on the country's economic growth, prompting several banks to cut their forecasts for Canadian gross domestic product growth this year. Many economists think momentum will pick up in the second half of 2015 as a weaker dollar and stronger U.S. economy buoy exports. But for now, pressures in the labour market linger.
"We've got to see the end of the deterioration before we can start talking about improvement," said Douglas Porter, Bank of Montreal chief economist, who thinks the country's jobless rate will climb higher in the coming months. "It's still early days."
Employment insurance numbers had been subsiding in Canada since 2010 – until late last year, when swooning crude prices triggered layoffs in the natural resources sector.
EI claims – an indicator of how many people could eventually become recipients – indicate some improvement. They fell 1.9 per cent nationally in April, with declines in two provinces most exposed to lower oil prices: Alberta and Saskatchewan.
For now, Alberta led the country's growth for the fourth month in a row as the number of beneficiaries jumped 10.7 per cent in April. In the past half year, Alberta has seen its EI numbers jump by 50 per cent, or 14,600 people.
British Columbia has tallied two months in a row of increases, although new claims in the province fell in April. Saskatchewan has had five consecutive months of growth in EI recipients, although its claims also fell.
Among cities, Windsor, Ont., has seen the biggest annual jump in EI recipients, due in part to a temporary auto plant shutdown. After Windsor, Edmonton and Calgary have had the largest increases, with gains of more than 30 per cent from a year earlier. At the same time, numbers have fallen in many cities in Ontario and Quebec.
Among occupations, the biggest year-over-year increases in EI was from people who had worked in processing, manufacturing and natural resources-related jobs.
The hit from lower oil prices is materializing in several ways in Alberta, from rising bankruptcies to lower home sales and slowing population growth. The province is expected to fall into a recession this year, and this week, an industry group predicted thousands of further job losses in Canada's drilling sector amid slower activity.
Canada's economy contracted in the first quarter of the year, and Toronto-Dominion Bank on Thursday trimmed its forecast for annual real GDP growth to 1.6 per cent this year from its previous forecast of 1.9 per cent.
"The worst is likely behind us," the bank said in its quarterly economic forecast, adding that while the impact of lower oil prices on profits and investment will "persist" in the short term, it sees a weaker Canadian dollar and strengthening U.S. economy boosting exports, which should "pave the way to better growth numbers."
Job creation and wage gains, however, will be "muted," the bank said, as the impact from plummeting oil prices weighs on the jobs market.
"The labour force tends to be impacted with a lag, so we expect it to stay soft through to the end of 2015, before improving," said TD senior economist Randall Bartlett.
Canada's jobless rate is currently at 6.8 per cent. Alberta's has risen to 5.8 per cent, the highest in more than four years, with little job growth since the start of the year.
Tavia Grant