Calgary & Area Labour Market Report - Second Quarter 2010 · • Natural gas prices have been...

Alberta Employment and Immigration

Calgary & Area Labour Market Report Second Quarter 2010

Calgary & Area Labour Market Report – Second Quarter 2010


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TABLE OF CONTENTS Introduction .....................................................................................................3

Organization of the Report............................................................................................... 3 Executive Summary........................................................................................4 The Economy.................................................................................................11

Global Economy............................................................................................................. 11 U.S. Economy................................................................................................................ 17 Canadian Economy........................................................................................................ 24

Contributory Influences ................................................................................................................................. 26 Alberta Economy............................................................................................................ 33

Contributory Influences ................................................................................................................................. 36 Calgary Region Economy .............................................................................................. 49

Contributory Influences ................................................................................................................................. 50 Trends in the Labour Market .......................................................................59

Canada .......................................................................................................................... 59 Q2 2010 ......................................................................................................................................................... 59

Alberta ........................................................................................................................... 63 Q2 2010 ......................................................................................................................................................... 63

Calgary Census Metropolitan Area (CMA)..................................................................... 67 Q2 2010 ......................................................................................................................................................... 67

Calgary & Area Employer Survey ...............................................................71 Q2 2010 Survey Results: Medium-Sized Companies (50 – 99 Employees) .................. 71

Job Bank Analysis ........................................................................................94 Calgary (city).................................................................................................................. 94 Communities Surrounding Calgary ................................................................................ 96 Banff/Canmore Area ...................................................................................................... 97

Appendix A ..................................................................................................100 Survey Methodology .................................................................................................... 100



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INTRODUCTION Alberta Employment and Immigration provides career and labour market information products and resources, with both a provincial and local/regional focus, in order that Albertans have the skills, supports and information they need to succeed in the labour market.

This report provides labour market information and analysis for use by Albertans in learning about the labour market and career planning; by employers and industry for use in understanding and addressing labour market issues; and by the Alberta Employment and Immigration Calgary Region for use in strategic planning for programs and services.

ORGANIZATION OF THE REPORT This report contains the following information:

Economic Overview – The Calgary regionʼs economy is influenced by global economic conditions, and by economic drivers in the Canadian economy and elsewhere in Alberta. This section provides information on economic activity in the second quarter of 2010, as well as outlooks (where available) for the global, U.S., Canada, Alberta and Calgary region economies.

Trends in the Labour Market – This section examines labour market information for Canada, Alberta and the Calgary Census Metropolitan Area (CMA). The information provided in this section is based upon Statistics Canadaʼs Labour Force Survey.

Calgary and Area Employer Survey – This section highlights findings from a survey conducted in the second quarter of 2010 of Calgary and area companies with 50 - 99 employees. Results of this survey are compared to the results of a survey conducted in the second quarter of 2009 (companies with 50 - 99 employees).

Job Bank Analysis – This section provides a summary of jobs posted to the Job Bank in the second quarter of 2010.

Disclaimer

Alberta Employment and Immigration has made every effort to ensure that the information contained in this report is reliable, but makes no guarantee of its accuracy or completeness. The user of any information in this report accepts full responsibility and risk of loss resulting from decisions made by the user.



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EXECUTIVE SUMMARY The Economy Global Economy

The global economic recovery is proceeding at a better than expected speed despite the uncertainties associated with the European debt crisis. The International Monetary Fund (IMF) expects world output to grow by four per cent in 2010 and 2011.

• Advanced economies are now expected to grow by 2.3 per cent this year and by 2.4 per cent in 2011, after a decline of more than 3 per cent in 2009.

• The unemployment rate in advanced economies is expected to remain high through 2011 given the sluggish recovery in output. While job creation is expected to turn positive during 2010, the unemployment rate will stay high as the labour force continues to expand. The unemployment rate in advanced economies is expected to stay around 8.5 per cent throughout 2011 and decline slowly after.

• Economic activity in emerging and developing economies is expected to continue to lead the global recovery. After modest growth in 2009, real Gross Domestic Product (GDP) in emerging and developing economies is expected to be over 6.2 per cent in 2010 and 2011.

• With the normalization of global trade and supportive fiscal policies in place, real GDP in the Euro Area is expected to grow by one per cent in 2010. All European economies with the exception of Greece are expected to be out of recession by 2011, with France and Germany leading the recovery. Economic growth in the Euro Area is forecast to reach 1.5 per cent in 2011 and average 1.7 per cent annually from 2011 to 2015.

U.S. Economy

The U.S. economy continues the economic recovery that began in the second half of 2009. Corporate profits have improved and job creation has been positive since the beginning of 2010. Supported by the improvements in personal consumption, private inventory investment and exports, real GDP increased at an annual rate of 2.7 per cent in the first quarter of 2010.

• The recovery ahead is expected to be gradual, as the recent improvements have not yet translated into income gains. Over the medium term, the withdrawal of the stimulus will also subtract from economic growth. As households continue to rebuild wealth, the International Monetary Fund expects real GDP in the United States to increase by 3.1 per cent in 2010.

• The U.S. unemployment rate decreased slightly to 9.7 per cent in May 2010 after reaching 9.9 per cent in April 2010. The number of long-term unemployed (those jobless for 27 weeks or more) stood at 6.8 million in May 2010 and accounted for 46 per cent of the total unemployed persons, about the same as reported in April 2010. In contrast, the number of employed re-entering the labour force fell by 286,000 in May after posting an increase in April.

• Labour demand in the U.S., as measured by the number of online advertised vacancies, was unchanged in May 2010 at 4,149,000, after a 223,000 gain in April 2010. Labour demand has been on an upward trend since October 2009 and surged over 750,000 in the past six months.

• The gap between the number of unemployed persons and the number of online advertised vacancies (the supply/demand ratio) stood at 3.68 in April 2010, down substantially from 4.76 in October 2009. A supply/demand ratio of 3.68 per cent means that there are over three unemployed workers available for every online advertised vacancy. Michigan and Mississippi posted the highest



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supply/demand ratios in April 2010 while North Dakota, Nebraska, South Dakota, and Alaska had some of the lowest rates.

• U.S. new home sales dropped by a dramatic 33 per cent month-over-month to a seasonally adjusted annual rate of 300,000 units in May 2010. According to a recent New York Times article, Mayʼs drop in new home sales was the largest since the government started tracking the data in 1963.

• The U.S. current-account deficit increased to $109.0 billion in the first quarter of 2010 from $100.9 billion in the final quarter of 2009. This was the third consecutive quarterly increase since the deficit of $84.4 billion registered in the second quarter of 2009, which was the smallest deficit since the third quarter of 1999.

Canadian Economy

The Canadian economy is firmly on a path of recovery, with most of the recent indicators being above expectations. Real GDP in Canada grew at an annualized rate of 6.1 per cent in the first quarter of 2010, following a 4.9 per cent gain in the final quarter of 2009. This compares with a 2.7 per cent first quarter 2010 increase recorded in the U.S. economy.

• The Canadian economy is forecast to expand between 3.2 per cent and 3.6 per cent in 2010. As the global economic recovery is expected to be well underway by 2011, policy makers are expected to start tightening economic policies in 2011. Economic growth in 2011 is projected to range between 2.5 per cent and 3.5 per cent.

• The Canadian dollar has appreciated against most major currencies since the first quarter of 2009 and averaged 0.97 cents U.S. in the second quarter of 2010. The value of the Canadian dollar is forecast to average between 99 cents U.S. and 105 cents U.S. by the end of this year, and to average just below parity in 2011.

• Canadaʼs all-items Consumer Price Index (CPI) rose 1.4 per cent in the 12 months to May 2010, after a 1.8 per cent increase in April. Most of the upward pressure on the CPI came from energy prices, which increased 6.2 per cent in May 2010, after a 9.8 per cent rise in the 12 months to April. Recent forecasts for the all-items CPI range from 1.8 per cent to 2.1 per cent in 2010, following a modest increase of 0.3 per cent in 2009. In 2011, the CPI is expected to increase between 1.9 per cent and 2.3 per cent.

• The Bank of Canada increased its key lending rate by one quarter of a percentage point to 0.5 per cent in June 1, 2010. With this hike, Canada became the first member of the G7 group of industrialized nations to raise interest rates since the global economic crisis.

• Canadaʼs population surpassed the 34-million mark as of April 1, 2010, reaching an estimated population of 34,019,000. The first quarter population was 88,100 or 0.26 per cent above the previous quarter population.

Alberta Economy

The recession in Alberta has ended and the Alberta economy is expected to grow solidly over the next two years, benefiting from an anticipated increase in oil prices. Real GDP in Alberta is expected to expand 3.3 per cent in 2010, driven by the energy sector. With positive spillovers from the energy industry to construction and retail trade industries, and a strong labour market, the Alberta economy is expected to grow by 4.1 per cent in 2011.

• Albertans continue to be optimistic about the provincial and national economy, according to the June 2010 RBC Canadian Consumer Outlook Index. Thirty-three per cent of Albertans think that the local



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economy will improve over the next three months. While this is eight per cent below the March 2010 level, it is still the highest in the country, and above the national average of 26 per cent.

• The price of West Texas Intermediate (WTI) crude oil averaged $78 U.S. per barrel in the second quarter of 2010, down 1 per cent from an average of $79 U.S. per barrel in the previous quarter, but up 31 per cent from an average of $60 U.S. per barrel a year ago in the second quarter of 2009.

• Natural gas prices have been declining since the beginning of this year and averaged $3.26 CAD per gigajoule (GJ) in April 2010, down 4 per cent from the previous month.

• As of May 2010, close to 950 major construction projects worth $230.9 billion are either planned, underway, or have been recently completed in Alberta.

• Consumers in Alberta paid on average 1.1 per cent more for the goods and services included in the Consumer Price Index (CPI) in May 2010 compared to the same month of 2009. Forecasts for CPI change in Alberta range from 1.4 per cent to 1.7 per cent in 2010 and from 1.9 per cent to 2.6 per cent in 2011.

• Housing starts in Alberta more than doubled to 5,651 units in the first quarter of 2010, compared to 2,614 starts during the first quarter of 2009. Overall, total housing starts in Alberta are expected to reach 28,100 units in 2010 and 32,400 units in 2011, after two years of over 30 per cent declines.

• The number of Alberta homes sold through the Multiple Listing Services (MLS) totaled 12,362 units during the first quarter of 2010, up almost one-third from the same period in 2009. MLS sales in Alberta are forecast to total 58,100 in 2010, and increase 4.5 per cent to 60,700 sales in 2011.

• Alberta contractors took out $2.9 billion ($1.9 billion in residential and $1.0 billion in non-residential) in building permits in the first quarter of 2010, down 24 per cent from the previous quarter but up by almost 60 per cent from the first quarter of 2009.

• Retail sales in Alberta totaled $14.83 billion in the first quarter of 2010, up 4 per cent from the previous quarter and up 6 per cent from the first quarter of 2009. During the same period, wholesale sales in Alberta totaled $14.58 billion, up 9 per cent from the previous quarter, but down 4 per cent year over year.

• Average weekly earnings of Alberta payroll employees increased 5.7 per cent year over year to $990 in April 2010, which was the highest annual increase among all provinces.

• A total of 2,202 Albertans and Alberta businesses filed for bankruptcy in the first quarter of 2010. Business and consumer bankruptcies in Alberta during the first quarter were up 4.5 per cent from the previous quarter, but down 11 per cent year over year. Both business (-8 per cent) and consumer (-11 per cent) bankruptcies were down compared with the same quarter of last year.

• The number of Albertans receiving regular EI benefits declined 4.7 per cent month over month to 49,900 in April 2010 – the sixth consecutive decline and the largest monthly decline among all provinces.

• Albertaʼs population grew by 0.35 per cent to just over 3,724,800 persons from January 1, 2010 to April 1, 2010, posting the provinceʼs smallest first-quarter gain since 1996. The slowdown was mainly attributable to the lower net gains in interprovincial migration.



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Calgary Region Economy

After being one of the nationʼs best performers from 2000 to 2007, Calgaryʼs economy suffered significantly from the global economic downturn in 2009. A contraction of 3.1 per cent in 2009 was Calgaryʼs largest and first contraction since 1989.

• During the first half of 2010, Calgaryʼs economic recovery appears to be supported by a strong housing market and increasing oil prices. However, despite those gains, Calgaryʼs economy is performing at a tepid pace. Calgary Economic Development is cautious about the short-term outlook for Calgaryʼs economy and projects real GDP growth of between 0.8 per cent and 1.2 per cent in 2010 due to the volatility in the global markets.

• Consumer prices increased 1.1 per cent in the Calgary CMA in the 12 months to May 2010. The main upward pressure came from increases in water, fuel and electricity. The Conference Board of Canada forecasts inflation in the Calgary CMA to average 1.7 per cent in 2010 and increase to 2.5 per cent in 2011.

• Total housing starts in the Calgary Census Metropolitan Area (CMA) increased 80 per cent year-over-year to 862 units in May 2010, which was the ninth consecutive monthly increase. Mayʼs increase was supported by the gains in both single-detached and multi-family starts. Canada Mortgage and Housing Corporation (CMHC) is forecasting total housing starts in the Calgary CMA will increase 39 per cent to 8,800 units in 2010, and a further 17 per cent to 10,300 units in 2011.

• To the end of June 2010, the number of single-family homes sold in Calgary reached 6,851 units, down 4 per cent from 7,160 units sold during the same period in 2009. In contrast, during the first half of the year a total of 3,121 metro condos sold in Calgary, up 5 per cent from 2,974 sales during the same period in 2009.

• The median price of a single-family home in Calgary was $418,900 in June 2010, virtually unchanged from the month earlier, and up 5 per cent from $399,000 in June 2009. The median price of a metro condo in Calgary in June 2010 was $269,900, down 4 per cent from May 2010, but up 2 per cent from $265,500 in June 2009.

• The value of building permits issued in Calgary during the first quarter of 2010 totaled $864 million, down 39 per cent from the previous quarter but up 49 per cent year-over-year. Compared to the first quarter of 2009, the value of residential permits was up 150 per cent, while the value of non-residential permits was down 12 per cent.

• Calgaryʼs overall office vacancy rate declined to 11 per cent in the first quarter of 2010, down from 11.6 per cent in the final quarter of 2009, but still up from 7.6 per cent in the first quarter of 2009. The office vacancy in Calgary is expected to rise at least for the next two years as office space completions will outpace space absorptions.

• As of May 2010, there were approximately 170 major projects worth $22.5 billion that were either proposed, announced or under construction in Calgary. The project sectors with the greatest value in May 2010 were Commercial/Retail (7.2 billion), Infrastructure (5.2 billion), and Institutional (3.7 billion).

Trends in the Labour Market Canada

Employment in Canada averaged 17,119,400 in the second quarter of 2010, an increase of 175,100 from the previous quarter. Year over year, employment in Canada increased by 293,300 or 1.7 per cent in the second quarter of 2010.



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• Canadaʼs unemployment rate averaged 8.0 per cent in the second quarter of 2010, down from 8.2 per cent in the previous quarter and down from 8.4 per cent year over year.

• On a quarter over quarter basis, full-time employment accounted for two-thirds of the employment gains in the second quarter of 2010. Since July 2009, employment growth has been concentrated in full-time work.

• Men accounted for over 80 per cent of the employment gains on a quarterly basis in the second quarter of 2010 and for approximately 60 per cent on a year over year basis.

• Employment for those aged 55+ was up 2.4 per cent on a quarterly basis in the second quarter of 2010, and accounted for just over half of all of the employment gains year over year.

• On an annual basis, employment increased in eleven industries in the second quarter of 2010, with professional, scientific and technical services (+85,500 or 7.2 per cent) and construction (+77,900 or 6.5 per cent) posting the strongest growth.

Alberta

Employment in Alberta increased by a modest 14,500 in the second quarter of 2010, compared to the previous quarter, averaging 1,991,100. Year over year, employment rose by only 4,300 or 0.2 per cent in Alberta in the second quarter of 2010.

• Albertaʼs seasonally adjusted unemployment rate averaged 6.9 per cent in the second quarter of 2010, down from 7.0 per cent the previous quarter, but up from 6.6 per cent year over year.

• The average length of unemployment in Alberta has gone from a low of 6.6 weeks in November 2008 to 18 weeks in April 2010. While this is a dramatic increase, this figure still remains below the national average of 19.3 weeks.

• Full-time employment in Alberta accounted for all of the employment gains in the second quarter of 2010.

• Employment for adults aged 25 – 64 increased by 10,100 year over year in the second quarter of 2010, but was offset by employment losses for youth aged 15 – 24 (-6,200) and adults aged 65 years+ (-900).

• In the second quarter of 2010, employment declined in 10 of 18 industries in Alberta on a year over year basis, with the most significant decreases (in numbers) seen in agriculture, educational services, and public administration.

Calgary CMA

In the second quarter of 2010, employment in the Calgary CMA declined by 6,900 on a quarterly basis, and by 3,400 on an annual basis, to an estimated total of 689,100.

• Calgaryʼs unemployment rate averaged 7.6 per cent in the second quarter of 2010, up from 7.2 per cent the previous quarter and up from 6.7 per cent year over year.

• Calgaryʼs participation rate, which is the percentage of the population 15 years+ that is either employed or actively looking for employment, fell to 75.0 per cent in June 2010, from 75.3 per cent the previous month. Despite the decline in Calgaryʼs participation rate in June 2010, Calgary continued to have the highest rate among metropolitan areas in Canada.

• In the second quarter of 2010, the most significant job gains in the Calgary CMA were in trade (+7,800) and manufacturing (+5,700) on a year over year basis.



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Calgary and Area Employer Survey For each quarter of 2010, a survey will be conducted of Calgary and area companies. The purpose of the survey is to gather information from employers on their recruitment and retention practices and various other employment issues they are facing. In the first quarter of 2010, large-sized companies with 100 or more employees were surveyed and in the second quarter of 2010, medium-sized companies with 50 – 99 employees were surveyed and reported on. Companies with 10 – 49 employees will be surveyed in the third quarter, and companies with 1 – 9 employees will be surveyed in the fourth quarter.

Q2 2010 Survey Results: Medium-sized Companies (50 – 99 employees)

• The 200 companies surveyed employ approximately 13,841 people.

• For companies surveyed in Q2 2010, slightly more companies downsized than expanded in the year prior to their survey, roughly similar to the Q2 2009 results.

• The balance of opinion on future business activity was slightly more positive for companies surveyed in Q2 2010.

• Twenty-two per cent of the companies surveyed in Q2 2010 reported they laid off employees in the three months prior to their survey, down from 38 per cent in Q2 2009.

• Fifty-two per cent of the companies surveyed in Q2 2010 said they had vacant positions that needed to be filled at the time of their survey, compared to 36 per cent of the companies surveyed in Q2 2009.

• In Q2 2010, the companies reporting vacancies reported a total of close to 450 positions that needed to be filled, which was 50 per cent more than the 300 vacancies reported by companies the previous year. Overall, this equates to a vacancy rate of 3.2 per cent for Q2 2010.

• The top positions needed across all industries were: Food and Beverage Servers, Program Leaders and Instructors in Recreation, Sport and Fitness, Real Estate Agents and Salespersons, Early Childhood Educators and Assistants, Food Counter Attendants and Kitchen Helpers, Cooks, and Supervisors, Oil and Gas Drilling and Service.

• The balance of opinion on future employment was more positive for companies surveyed in Q2 2010, indicating companies are anticipating expanding their workforces over the next three months.

• Twenty-one per cent of the companies surveyed in Q2 2010 reported they employed approximately 215 temporary foreign workers, unchanged from 21 per cent in Q2 2009.

• Seven per cent of the companies surveyed in Q2 2010 anticipated applying for or hiring approximately 65 temporary foreign workers in the 12 months following their survey, virtually unchanged from Q2 2009.

• Overall, the most commonly used recruitment method for companies surveyed in Q2 2010 was word of mouth/employee referrals, followed by walk-ins/unsolicited resumes, the Internet, and company website/internal postings.

• Thirty-one per cent of the companies surveyed in Q2 2010 reported having difficulty recruiting qualified employees in the 12 months prior to their survey, down from Q2 2009 when 41 per cent reported having difficulty.

• On balance, the companies surveyed in Q2 2010 anticipate having less difficulty recruiting qualified employees over the next 12 months.



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• Eighty-four per cent of the companies surveyed in Q2 2010 reported employees had left their company in the 12 months prior to their survey as a result of voluntary turnover, compared to 71 per cent of the companies in Q2 2009.

• The companies surveyed in Q2 2010 reported approximately 930 employees left their companies in the 12 months prior to their survey as a result of voluntary turnover. This equated to a turnover rate of 6.7 per cent.

• On balance, the companies surveyed in Q2 2010 anticipate employee turnover will be lower over the next 12 months.

• Food and beverage servers were mentioned most often by companies surveyed in Q2 2010 as having a high turnover rate.

• Overall, the most commonly used retention strategy for companies surveyed in Q2 2010 was a positive work environment, followed by excellent management/supervision, and a competitive salary. Results were similar for companies surveyed in Q2 2009.

• In Q2 2010, more companies on balance anticipated they would be focusing more on employee retention in the next year.

• Over 90 per cent of the companies surveyed said they offer formal training to employees. Ninety per cent of the companies that offer formal training to employees reported they use internal staff to deliver the training.

Job Bank Analysis • There were 10,121 unique job postings on the Job Bank for Calgary (city) in the second quarter of

2010, advertising for a total of 23,281 positions. Forty-six per cent were sales and service occupations, and 23 per cent were trades, transport and equipment operator occupations.

• For the communities surrounding Calgary, there were 1,823 unique job postings on the Job Bank in the second quarter of 2010, advertising for a total of 4,285 positions. Forty-seven per cent were sales and service occupations, and 23 per cent were trades, transport and equipment operator occupations.

• For the Banff/Canmore area, there were 1,017 unique job postings on the Job Bank in the second quarter of 2010, advertising for a total of 2,610 positions. Sales and service occupations dominated the Job Bank in the second quarter of 2010 accounting for 78 per cent of the total positions.

• Since July 21 2009, job postings for Calgary and surrounding area varied from a low of 1,240 postings the week of January 5, 2010 to a high of 2,499 postings the week of June 29, 2010. Job postings for Banff/Canmore area varied from a low of 71 postings the week of December 1, 2009 to a high of 251 postings the week of April 20, 2010.



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THE ECONOMY The Calgary regionʼs economy is affected by global economic activity, economic conditions in the U.S., and economic drivers in the Canadian economy and elsewhere in Alberta.

GLOBAL ECONOMY The global economic recovery is proceeding at a better than expected speed despite the uncertainties associated with the European debt crisis. While the risks to sustainable economic recovery have eased, economic momentum remains highly dependent on supportive monetary policies. The large decline in global inventories and strong financial markets, which has supported the economic recovery to date, is expected to continue to sustain global growth in 2010 while the effects of fiscal stimulus start to fade.

The International Monetary Fund (IMF) expects world output to grow by four per cent in 2010 and 2011. This level of economic activity for 2010 represents an upward revision of 1 percentage point from the October 2009 World Economic Outlook (WEO), and is basically unchanged from the January 2010 WEO Update.

Figure 1: Average Real GDP Growth

(2010-2011, percent change)

While the world economy is expected to grow further, the recovery will be at varying speeds across and within regions. Timely implementation of large macroeconomic stimulus packages have supported the economic recovery in many advanced countries so far. However, private demand has not followed as originally hoped as of yet and large current account and fiscal imbalances pose a threat to the recovery in some European economies. Thus, the recovery in many advanced economies is expected to be weak compared with the recoveries from the past recessions. Advanced economies are now expected to grow by 2.3 per cent this year and by 2.4 per cent in 2011, after a decline of more than 3 per cent in 2009.

Economic activity in emerging and developing economies is expected to continue to lead the global recovery. Output growth in key emerging Asian economies is already above the pre-crisis levels. The economic



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rebound in most Asian economies was supported by both external and domestic demand, making the recovery in Asia more balanced than anywhere else.

According to the IMF, four factors that have helped Asian economies to recover were as follows: rapid normalization of trade, bottoming out of inventory cycle, resumption of capital inflows into the region and a resilient domestic demand. After modest growth in 2009, real Gross Domestic Product (GDP) in emerging and developing economies is expected to be over 6.2 per cent in 2010 and 2011.

“Economies that are off to a strong start are likely to remain in the lead, as growth in others is held back by lasting damage to financial sectors and household balance sheets. Many emerging economies are again growing rapidly and a number have begun to moderate their accommodative macroeconomic policies in the face of high capital inflows. Given prospects for relatively weak growth in the advanced economies, the challenge for emerging economies is to absorb rising inflows and nurture domestic demand without triggering a new boom-bust cycle.”1

As with growth rates, there were large differences in unemployment in response to the economic recession across and within regions during the global downturn. For example, while the unemployment rate increased by 5.7 percentage points in Ireland and 6.7 percentage points in Spain, output dropped by more than 7 per cent in Ireland and by only half as much (3.6 per cent) in Spain. In contrast, the unemployment rate in Germany declined from 7.7 per cent in June 2009 to 7.1 per cent in April 2010 according to the Eurostat.

“… the problem is even larger than the statistics suggest. Many of the employed are working shortened hours or in temporary jobs with few benefits. Others would like to find work but have given up searching and are thus no longer recorded as unemployed in the statistics. There is no single measure for broader unemployment or underemployment, but available data suggest that it can often be higher by 25 to 50 percent than headline unemployment rates.”2

In an attempt to shed light on unemployment dynamics during the global downturn, IMF staff dedicated a chapter in the World Economic Outlook April Report to the analysis of unemployment dynamics in a sample of advanced countries during recessions and recoveries over the past 30 years.3 According to the IMF, institutions, policies and shocks also have a significant impact on unemployment rates apart from the output fluctuations.

The main findings of this study suggest that employment creation remains slow following economic recessions associated with financial crisis and house price busts. While the large increase in the unemployment rates of Spain and the United States can be explained by large output declines, countries that experienced less unemployment than expected by Okunʼs law4 present a puzzle.5

The unemployment rate in advanced economies is expected to remain high through 2011 given the sluggish recovery in output. While job creation is expected to turn positive during 2010, the unemployment rate will stay high as the labour force continues to expand. The unemployment rate in advanced economies is expected to stay around 8.5 per cent throughout 2011 and decline slowly after.

1 International Monetary Fund, World Economic Outlook, April 2010. 2 lbid, p.23. 3 The sample includes Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland,

Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom, and United States.

4 Okunʼs Law is an empirically observed relationship between unemployment and output, derived by Arthur Okun in 1962. Based on the United States data from the period between World War II and 1960, the law states that for every one percentage point increase in unemployment rate, GDP will decrease by 3 percentage points from its potential,

5 International Monetary Fund, World Economic Outlook, April 2010, p.69.



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Figure 2: Change in GDP and Unemployment Rates in Advanced Economies (2009)

Source: International Monetary Fund, World Economic Outlook Database, April 2010.

A recovery, albeit a gradual and uneven one, is underway in the European economies. With a number of countries, including Greece, Spain, Romania and Latvia, still in recession at the beginning of 2010, the economic recovery in Europe remains slow compared to other regions. The large impact of the financial crisis on Europe relative to other regions revealed the high degree of interconnection between Europe and the United States and the reliance of key European economies to external demand as the source of economic growth. According to the IMF, the following three factors played a significant role in determining the magnitude of economic collapse in 2009 in the European economies: a) a rapid expansion of credit to private sector, b) above-trend output, and c) current account imbalances.6 The last factor also implies that countries with current account surpluses before the global crisis were affected more by the economic downturn compared to countries with current account deficits.

“Across Europe, unprecedented policy actions are shoring up a moderate and uneven recovery. In the very near term, policies must push to establish a firm recovery. However, in some countries, fiscal stimulus has already collided with sustainability concerns. In any case, the tasks ahead include a large medium-term fiscal consolidation. Equally crucial is the quick return to normal financial intermediation that will come through rapid restructuring and recapitalization of vulnerable institutions, clarification of the regulatory environment, and moving away from blanket support to the financial sector. Many countries need to boost competitiveness and rebalance their sources of growth.”7

Several powerful economies, such as Germany and France, supported the recovery in Europe, while concerns about sovereign solvency in Greece constrained the recovery. Greece has built such a large fiscal public deficit due to expansionary fiscal policies over the years that the Greek government was not able to

6 International Monetary Fund, Regional Economic Outlook, Europe Fostering Sustainability, May 2010, p.1. 7 Ibid.



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implement tax cuts or higher spending to stimulate the economy. In fact, the Greek government had to adopt a number of fiscal consolidation policies in order to qualify for a €110 billion stimulus, including €30 billion from the IMF. On the back of fiscal tightening policies and public wage cuts, the Greek economy is expected to contract by a further two per cent in 2010 and 1.1 per cent in 2011.

“The significant progress made by Greece in terms of real convergence over the last decade is now considerably challenged. Bringing the Greek economy back to a sustained convergence path involves the prompt correction of the factors underlying domestic and external imbalances. Developments in the external sector are expected to lead to a partial correction of the external deficit in 2010. Nevertheless, improvement over the medium term is likely to be much more moderate, given the structural weaknesses of the external performance of the economy and past years' accumulated competitiveness losses.”8

With the normalization of global trade and supportive fiscal policies in place, real GDP in the Euro Area is expected to grow by one per cent this year. All European economies with the exception of Greece are expected to be out of recession by 2011. France (+1.8 per cent) and Germany (+1.7 per cent) are expected to lead the recovery. Economic growth in the Euro Area is forecast to reach 1.5 per cent in 2011 and average 1.7 per cent annually from 2011 to 2015.

“Reliant on global growth in the near-term and held back somewhat by weak private demand further out, this recovery is set to mirror previous upturns following financial crises. The high unemployment and large increase in government debt typically associated with the aftermath of such crises are evident at the current juncture, though the rise in unemployment is set to be more contained this time round.”9

Table 1: Advanced Economies Outlook Projections (Percent Change)

2009* 2010 2011 2009* 2010 2011

United States -2.4% 3.1% 2.6% 9.3% 9.4% 8.3%

Canada -2.6% 3.1% 3.2% 8.3% 7.9% 7.5%

Japan -5.2% 1.9% 2.0% 5.1% 5.1% 4.9%

Germany -5.0% 1.2% 1.7% 7.4% 8.6% 9.3%

France -2.2% 1.5% 1.8% 9.4% 10.0% 9.9%

Italy -5.0% 0.8% 1.2% 7.8% 8.7% 8.6%

U.K. -4.8% 1.3% 2.7% 7.5% 8.3% 7.9%

* Actual or most recent estimates.

Real GDP Unemployment Rate**Region


** Percent ot total labour force.

Almost all Asian economies are showing signs of a V-shaped recovery. Building on the strong rebound in exports, Japanʼs economy grew at an annualized rate of close to 5 per cent in the first quarter of 2010. However, the impacts of the recovery have not yet spilled over to domestic demand. So far, private demand has been supported by the fiscal stimulus, but it is expected to remain weak as a result of deflation, weak 8 European Commission, Economic and Financial Affairs, European Economic Forecast – Spring 2010, May 2010,

p.89. 9 lbid, p.7.



15

labour markets and excess capacity. In addition, the yen continues to be strong against the U.S. dollar and the euro, which will likely dampen the contribution of exports to the economic growth. According to the Japan Center for Economic Research, the pace of economic growth will slow somewhat compared to last year as the effects of fiscal stimulus diminish gradually. Supported by external demand and fiscal policies, Japanʼs economy is projected to grow by 2 per cent in 2010 and 2011.

“Japanʼs recovery, like its recession, reflects its export dependence. Industrial production accounts for about a quarter of GDP and is heavily export-oriented; the bulk of corporate profits derive from exports, not domestic sales.”10

A combination of monetary and fiscal policies and strong domestic demand have maintained Chinaʼs economic growth to date. The Chinese economy grew by 8.7 per cent in 2009, exceeding the governmentʼs 8 per cent target. However, now the Chinese economy is facing the risks of inflation, asset price bubbles and excess industrial capacity.

“Two of the biggest issues facing China at the moment involve prices. Specifically, there is concern about consumer prices and home prices. The first is in danger of accelerating and the second is in danger of collapsing. Either event, or more likely the policy response thereof, could derail the economic recovery.”11

Maintaining a fixed exchange rate does not help to deal with these issues. In order to keep the value of renminbi (Chinese yuan) from rising, the Peopleʼs Bank of China is required to sell renminbi, which increases the supply of money and in turn accelerates inflation. The Peopleʼs Bank of China emphasized in a recent announcement that, “it is desirable to proceed further with reform of the RMB exchange rate regime and increase the RMB exchange rate flexibility.”12 The timing and the degree of the reforms on a more flexible exchange rate regime will have a significant influence on Chinaʼs success in reducing the inflationary pressures. Against the backdrop of strong government and consumer spending and business investment, the Chinese economy is expected to expand by close to 10 per cent both in 2010 and 2011.

Reflecting the increased demand for Indian exports, the Indian economy is recovering from what had been a modest economic slowdown compared to other regions in the world. In line with the exports, consumer confidence and domestic investment are also on the rise. Consequently, Indiaʼs economy grew at an annualized rate of 8.6 per cent in the first quarter of 2010. However, due to poor monsoon and higher food prices, inflation is also rising in India. The Reserve Bank of India has raised the repo rate, the rate at which the central bank lends to commercial banks, two times in April from 5 per cent to 5.25 per cent. Given the expected rebound in agricultural activity, the outlook for the Indian economy in the near term is very positive. The Indian economy is expected to grow by 8.75 per cent in 2010 and 8.5 per cent in 2011.

“For now, the biggest risks to India involve political issues. Failure to continue the process of reform is one potential problem. Issues surrounding relations with Pakistan and relations among various ethnic groups within India could have a negative impact on business investment and capital inflows. Yet, on balance, the outlook is quite good.”13

10 Deloitte, Global Economic Outlook 2nd Quarter 2010, April 27, 2010, p.20. 11 Deloitte, Asia Pacific economic outlook: China, Japan, India, Philippines, June 2010, p.2. 12 The Peopleʼs Bank of China, News, Further Reform the RMB Exchange Rate Regime and Enhance the RMB

Exchange Rate Flexibility, June 19, 2010. 13 Deloitte, Global Economic Outlook 2nd Quarter 2010, April 27, 2010, p.30.



16

Table 2: Emerging and Developing Economies Outlook Projections (Percent Change)

2009* 2010 2011 2009* 2010 2011

Russia -7.9% 4.0% 3.3% 11.7% 7.0% 5.7%

China 8.7% 10.0% 9.9% -0.7% 3.1% 2.4%

India 5.7% 8.8% 8.4% 10.9% 13.2% 5.5%

Brazil -0.2% 5.5% 4.1% 4.9% 5.1% 4.6%

Mexico -6.5% 4.2% 4.5% 5.3% 4.6% 3.7%

Real GDP Inflation**


* Actual or most recent estimates.

Region

**Average Consumer Prices

Latin American and Caribbean economies entered a strong economic rebound in the second half of 2009. Some of the factors that have shaped the recovery in the region are as follows: a) supportive fiscal and monetary policies, b) good financial system fundamentals, and c) higher commodity prices and external demand. According to the IMF, the recovery is expected to be especially strong for the commodity-exporting economies, which account for approximately two-thirds of the regionʼs GDP, and less strong in commodity-importing economies, which have large tourism sectors, such as The Bahamas, Barbados and St. Lucia.14

The economic downturn hit Mexico the hardest of the countries in the Latin American and Caribbean region. Although economic activity saw some improvements in the second half of 2009, real GDP fell by 6.5 per cent as a whole in 2009. Both the swine flu pandemic and the high dependence of Mexican exports on US demand had significant impacts on the economic downturn. Given some renewed demand from the USA, the Mexican economy is expected to expand by 4.2 per cent in 2010, which would be the fastest growth pace in almost a decade.15

“Moreover, the real economic disturbance, which in April 2009 was aggravated by the eruption of swine flu epidemics, had a deeper and more lasting effect on Mexico. Its manifestation included a contraction of tourism in Mexican destinations and the worsening of an already declining trend in worker remittances from abroad. However, the most important driving force of the economic slump was the sharp fall in the demand for Mexicoʼs exports, especially manufacturing goods oriented to the United States, which during the last ten years accounted for over 80% of the countryʼs total non-oil exports.”16

Russiaʼs economic expansion before the global economic crisis was heavily dependent on commodity prices (especially oil) and capital inflows. It was the worldʼs largest exporter of natural gas, the second largest exporter of oil and the third largest exporter of steel and primary aluminum in 2009. However, Russiaʼs economic diversification was limited making it much more exposed to the global economic crisis as oil prices fell from $140 USD per barrel to $40 USD per barrel.

With the help of both a strong fiscal and monetary stimulus, the Russian economy appears to be out of the recession. According to the most recent Rosstat estimates, real GDP in Russia increased by 2.9 per cent in

14 International Monetary Fund, World Economic Outlook, April 2010, p.58. 15 The World Bank, Global Economic Prospects Summer 2010: Regional Annex – Latin American and Caribbean, June

10, 2010, p.5. 16 Manuel Sanchez, Mexicoʼs Economic Outlook: Challenges and Opportunities, February 5, 2010, p.2.



17

the first quarter of 2010.17 Consumer spending also started to contribute to the recovery supported by the gains in real disposable income and wages during the first quarter. Despite the long-term challenges ahead for sustainable long-term growth, including a shrinking workforce and a high level of corruption, the Russian economy is expected to grow by 4.0 per cent in 2010 and 3.3 per cent in 2011.

“Since the prospects for GDP growth in Russia are linked heavily to oil price developments, which are notoriously difficult to anticipate, near-term forecasts diverge widely. But assuming that the global rebound continues and oil prices do not fall again significantly, Russiaʼs recovery should endure.”18

U.S. ECONOMY The U.S. economy continues the economic recovery that began in the second half of 2009. Corporate profits have improved and job creation has been positive since the beginning of 2010. Supported by the improvements in personal consumption, private inventory investment and exports, real gross domestic product (GDP) increased at an annual rate of 2.7 per cent in the first quarter of 2010.19 Improvements in both the consumer spending and investment sides were partly offset by the contractions in state and local government spending in an effort to balance budgets as well as a reduction in residential fixed investment.

“After a deep economic recession and stimulus-fueled rebound, the return to positive job growth marks the transition towards sustained private-sector expansion.”20

Figure 3: U.S. Real Gross Domestic Product (% change from preceding period)

Source: U.S. Bureau of Economic Analysis, National Income and Products Account Table

17 The World Bank, Russian Economic Report No.22, June 16, 2010, p.3. 18 Deloitte, Global Economic Outlook 2nd Quarter 2010, April 27, 2010, p34. 19 U.S. Bureau of Economic Analysis, Gross Domestic Products: First Quarter 2010 (Third Estimate), June 25, 2010. 20 TD Economics, Quarterly Economic Forecast, June 11, 2010, p.1.



18

The Conference Board Leading Economic Index (LEI) — a composite economic index of 10 major economic indicators for the United States – increased 0.4 percent in May 2010, after staying flat in April 2010. Although the LEIʼs growth rate has slowed since the beginning of 2010, it is now 4.6 per cent above its most recent peak in December 2006. According to the Conference Board, the index points to a slower but continuous economic growth for the rest of this year.

The recovery ahead is expected to be gradual, as the recent improvements have not yet translated into income gains. Over the medium term, the withdrawal of the stimulus will also subtract from economic growth. As households continue to rebuild wealth, the International Monetary Fund (IMF) expects real GDP in the United States to increase by 3.1 per cent in 2010. This represents an upward revision of 0.5 percentage points from the January 2010 World Economic Outlook (WEO) Update and 1.5 percentage points from the October 2009 WEO Update. Beyond the initial recovery, balancing fiscal policy and restoring the U.S. financial system to full health will be essential for a sustainable medium-term growth.

Table 3: U.S. Economic Outlook (% change, period-over-period annualized)

Category Q1* Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2011

Real GDP 3.0 3.6 2.5 2.8 2.7 2.8 2.9 3.0 -2.4 3.2 2.8

Consumer Expenditure 3.5 3.1 2.3 2.7 2.5 2.6 2.4 2.6 -0.6 2.5 2.6

Business Investment 3.1 7.3 6.3 9.2 11.2 12.1 10.4 8.9 -17.8 3.0 9.9

Housing Starts Imil. Units) 0.6 0.7 0.7 0.8 0.8 0.9 1.0 1.1 0.6 0.7 1.0

CPI (Y/Y) 2.4 2.0 1.5 1.0 0.9 1.2 1.4 1.6 -0.3 1.7 1.3

Employment 0.2 2..5 1.1 2.5 2.6 2.7 2.7 2.6 -4.3 -0.2 2.4

Unemployment Rate (%) 9.7 9.7 9.6 9.5 9.3 9.1 9.0 8.9 9.3 9.6 9.1

Personal Savings Rate (%) 3.4 3.8 3.9 3.7 3.0 3.1 3.2 3.3 4.2 3.7 3.1

Real Output per hour (Y/Y) 6.2 4.7 3.0 1.5 1.0 0.9 1.0 1.3 3.7 3.8 1.1

Annual2011

Source: TD Bank Financial Group, Quarterly Economic Forecast, June 11, 2010.

* Actual data.

2010

The success of small and medium-sized businesses (SMBs) will be crucial to a sustainable long-term recovery. According to a special report by TD Bank Financial Group, small and medium-sized businesses make up 99.7 per cent of the firms in the United States and account for over half of total employment. However, SMBs were also those hit hardest by the economic recession due to the tightening of credit conditions. According to the U.S. Bureau of Labour Statistics, SMBs accounted for more than 60 per cent of the total jobs lost (8 million net jobs lost) during the economic downturn.

While the small and medium-sized business sector is showing some positive signs of improving, most of the indicators are still below the pre-crisis level. The net-percentage of businesses reporting more difficulty accessing credit declined to 13 per cent in May 2010, but remains above the level it was two years ago.21

“The small business sector (half of private GDP and 2/3rds of new job created historically) is showing some signs of new life. The May survey delivered some actual positives – more owners gave positive responses than negative ones to many questions than at any time in the past two years. Still, overall, the Index and its components remain in “recession”

21 The National Federation of Independent Business, Small Business Economic Trends, June 2010, p.2.



19

territory. The small business sector is in maintenance mode, not growth, but it has definitely lifted off the bottom with the worst survey readings behind us.”22

The results of the Federal Reserveʼs Senior Loan Officer Survey (SLOS), a survey of approximately 60 large domestic banks and 24 U.S. branches and agencies of foreign banks, echo the recent improvements in the SMB sector. The net percentage23 of domestic respondents reporting tighter credit conditions for small businesses fell to zero (0) per cent in the second quarter of 2010, from a record high of 74.5 per cent in the final quarter of 2008.24 Similarly, the net percentage of domestic respondents reporting higher credit spreads was 9.3 per cent in the second quarter of 2010, down from a high of 92.7 per cent in the fourth quarter of 2008.25 A general credit spread is defined as the comparison between the returns of two bonds with equal maturity, but with different credit ratings. The Senior Loan Officer Survey reports on the net percentage of domestic respondents reporting increasing spreads of loan rates over the Federal Reserve Bankʼs cost of funds. A wider credit spread indicates that consumers think investing in loans is risky and thus are uncertain about the future of the economy.

Figure 4: Net Job Gains/Losses by Firm Size (Thousands)

Source: U.S. Bureau of Labour Statistics, Business Employment Dynamics

The positive outlook for the SMBs and a broader economic recovery was also supported by the non-farm payroll employment data, which increased in every month so far in 2010. The May 2010 employment numbers showed that total non-farm payroll employment increased by 431,000, including the hiring of

22 The National Federation of Independent Business, Small Business Economic Trends, June 2010, p.3. 23 The net percentage is defined as the percentage of banks that reported tightening standards (“tightened

considerably” or “tightened somewhat”) minus the percentage of banks that reported easing standards (“eased considerably” or “eased somewhat”).

24 The Federal Reserve Board, Senior Loan Officer Survey on Bank Lending Practices, April 2010. 25 Ibid.



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411,000 temporary employees for Census 2010.26 Manufacturing (+29,000), temporary help services (+31,000) and mining (+10,000) saw gains in employment, while construction employment declined (-35,000). Health care employment was little changed (+8,000) from the previous month in May 2010, given that it had increased by an average of 20,000 per month over the last 12 months.27 The average work week for all employees on private non-farm payrolls increased, edging up 0.1 hour to 34.2 hours in May 2010.

The U.S. unemployment rate decreased slightly to 9.7 per cent in May after reaching 9.9 per cent in April 2010. The number of long-term unemployed (those jobless for 27 weeks or more) stood at 6.8 million in May and accounted for 46 per cent of the total unemployed persons, about the same as reported in April 2010. In contrast, the number of employed re-entering the labour force fell by 286,000 in May after posting an increase in April.

The high proportion of long-term unemployed persons has been one the persistent characteristics of the current economic downturn. According to the U.S. Bureau of Labour Statistics, four in 10 unemployed persons were jobless for 27 weeks or more by the end of 2009, which was the highest rate since 1948.28 On broader terms, the long-term unemployment rate for all persons increased by 2.1 percentage points over the course of two years, from 0.8 per cent in 2007 to 2.9 per cent in 2009.

“During the current recession, rising unemployment has led to record high levels of long-term joblessness. Moreover, upswings in the measure were pervasive across all age groups. While young workers had the higher nominal increase in their long-term unemployment rate, prime-age and older workers had a somewhat larger increase on a percent basis.”29

As the recession deepened, the share of unemployed people who were successful in their job search declined dramatically. In 2009, only 17 per cent of all the unemployed persons in one month were able to find jobs by the next month, down from 28 per cent of the unemployed in 2007.30 The decline in the rate of a successful job search was visible across all age groups, with the 25 to 54 age cohort being the hardest hit. The share of persons in the 25 to 54 age group who went from being unemployed in one month to being employed by the next month declined from 29 per cent in 2007 to 18 per cent in 2009.

“Similarly, as the likelihood of successful job search declined for each age group during the recession, the probability of remaining unemployed rose sharply. These changes contributed to rising numbers of long-term unemployed. Declines in successful job search and longer periods of unemployment are expected outcomes from such a severe job market downturn. What is less predictable is the extent to which unemployed workers would persevere in their search for employment after failing for so long to find jobs.”31

26 U.S. Bureau of Labour Statistics, Employment Situation Summary May 2010, June 4, 2010. 27 Ibid. 28 U.S. Bureau of Labour Statistics, Long-term unemployment experience of the jobless, June 2010. 29 Ibid. 30 Ibid. 31 Ibid.



21

Figure 5: Labour Force Flows (Percent, annual averages)

Source: U.S. Bureau of Labour Statistics, Long-term unemployment experience of the jobless, June 2010.

Labour demand in the U.S., as measured by the number of online advertised vacancies, was unchanged in May 2010 at 4,149,000, after a 223,000 gain in April 2010.32 Labour demand has been on an upward trend since October 2009 and surged over 750,000 in the past six months. Labour demand has risen in a wide variety of occupations, with demand for workers in sales, education and training, food preparation and service, healthcare support and personal care reaching above pre-recession levels of 2007. In contrast, while the demand for manufacturing and construction occupations are rising, they still remain below the 2007 levels.

The gap between the number of unemployed persons and the number of online advertised vacancies (the supply/demand ratio) stood at 3.68 in April 2010, down substantially from 4.76 in October 2009. A supply/demand ratio of 3.68 per cent means that there are over three unemployed workers available for every online advertised vacancy. Michigan (7.17 per cent) and Mississippi (7.10 per cent) posted the highest supply/demand ratio in April while North Dakota (1.17 per cent), Nebraska (1.41 per cent), South Dakota (1.45 per cent) and Alaska (1.51 per cent) had some of the lowest rates.33

Unexpectedly, the Conference Board Consumer Confidence Survey — a survey of a representative sample of 5,000 U.S. households — declined sharply in June 2010, following three consecutive months of gains.34 Consumersʼ assessment of the current-day conditions was also less favorable in June with those indicating that present-day conditions are “good” decreasing to 8.0 per cent from 9.7 per cent in May 2010. Consumers were more pessimistic on the labour market front as well. Those indicating that jobs are “hard to get” increased from 43.9 per cent in May to 44.8 per cent in June 2010.

32 The Conference Board, Help Wanted Online, June 2, 2010. 33 Ibid. 34 The Conference Board, Consumer Confidence Survey, June 29, 2010.



22

“Consumer confidence, which had posted three consecutive monthly gains and appeared to be gaining some traction, retreated sharply in June. Increasing uncertainty and apprehension about the future state of the economy and labor market, no doubt a result of the recent slowdown in job growth, are the primary reasons for the sharp reversal in confidence. Until the pace of job growth picks up, consumer confidence is not likely to pick up.”35

Privately-owned housing starts fell by 10 per cent month-over-month to 593,000 units in May 2010. The decline in single-family construction (-17.2 per cent) was the main driver of the fall, while multi-family starts were up 33 per cent. However, privately-owned housing starts were 7.8 per cent above the May 2009 level of 550,000 units.

“The marked pullback in new construction reflects the heightened level of uncertainty around future home sales following the expiration of the home buyerʼs tax credit. Builder optimism has since worsened and the desire to maintain tight inventories is expected to continue to limit the pace of new construction in the months ahead.”36

U.S. new home sales dropped by a dramatic 33 per cent month-over-month to a seasonally adjusted annual rate of 300,000 units in May 2010.37 According to a recent New York Times article, Mayʼs drop in new home sales was the largest since the government started tracking the data in 1963.38 The decline in new home sales also outdid analystsʼ expectations of a drop to about 400,000.

The averages sales price of new houses sold in May 2010 was $263,400. There were also 213,000 new houses for sale at the end of May, representing a supply enough for the next 8.5 months at the current rate of sales.

The drop in housing starts and new home sales in May might in fact be a reaction to the completion of the governmentʼs homebuyersʼ tax credit program, which was initially slated to end in November but was extended to the end of April 2010. The question for now is if this drop was just temporary.

“Now, the important issue is whether the May slump is just some temporary give-back after sales were "borrowed" from the future in March and April in order to take advantage of the tax credit. Something similar to this happened in the motor vehicle sector with regard to the "cash-for-clunkers" program. Car and truck sales surged in August 2009 only to plunge in September. However, thereafter, motor vehicle sales picked up again and have been well above their pre-cash-for-clunkers level.”39

35 The Conference Board, Consumer Confidence Survey, June 29, 2010. 36 TD Bank Financial Group, TD Economics, U.S. Housing Starts and Building Permits, June16, 2010. 37 U.S. Census Bureau, New Residential Sales in May 2010, June 23, 2010. 38 The New York Times, U.S. New Home Sales Drop 33% in May, June 23, 2010. 39 Paul L Kasriel, FOMC Statement and U.S. Housing Market Post Tax Credit Fundamentals, June 24, 2010.



23

Figure 6: U.S. Housing Starts and New Home Sales, Seasonally Adjusted Annual Rate

(thousands of housing units)

Source: U.S. Census Bureau, New Residential Construction and New Residential Sales

The U.S. current-account deficit—the combined balances on trade in goods and services, income, and net unilateral current transfers—increased to $109.0 billion in the first quarter of 2010 from $100.9 billion in the final quarter of 2009. This was the third consecutive quarterly increase since the deficit of $84.4 billion registered in the second quarter of 2009, which was the smallest deficit since the third quarter of 1999.40 The deficit on goods increased to $151.3 billion in the first quarter from $140.1 billion in the fourth, while the surplus on services increased from $35.4 billion to $36.0 billion over the same period. 41

40 U.S. Bureau of Economic Analysis, U.S. International Transactions: First Quarter 2010, June 17, 2010. 41 Ibid.



24

CANADIAN ECONOMY The Canadian economy is firmly on a path of recovery, with most of the recent indicators being above expectations. Real GDP in Canada grew at an annualized rate of 6.1 per cent in the first quarter of 2010, following a 4.9 per cent gain in the final quarter of 2009.42 This compares with a 2.7 per cent first quarter 2010 increase recorded in the U.S. economy.

“After navigating through the global recession in better shape than its G7 counterparts, Canadaʼs economy has continued to defy the odds in the early stages of recovery. Real GDP powered ahead at 5-6% annualized rates in the fourth quarter of 2009 and first quarter of 2010 – about four times the rate (1.3%) recorded by the G-7 as a whole.”43

On the strength of manufacturing, the goods-producing sector expanded 2.7 per cent in the first quarter, posting the second consecutive quarterly increase. The gains in the manufacturing sector were widespread, with production of durable manufacturing increasing 5.9 per cent. The construction sector was also strong, posing its third consecutive quarterly gain at 2.5 per cent in the first quarter.

The services-producing sector expanded by 1.1 per cent in the first quarter, led by gains in the wholesale sector, which grew by 3.9 per cent in the same period.44 Production in the retail sector was also strong, posting an increase of 2.6 per cent in the first quarter.

Consumer spending on goods and services also increased 1.1 per cent in the first quarter, following a 1.0 per cent gain in the last quarter of 2009. In contrast, government spending on goods and services increased by a modest 0.5 per cent in the first quarter of 2010, following over 1.5 per cent increases in each of the previous two quarters. The growth in government capital expenditure also slowed to 1.1 per cent in the first quarter of 2010, after averaging 4.0 per cent in the previous five quarters.

With increased activity in the construction sector, investment in residential structures increased 5.4 per cent, marking the fourth consecutive quarterly gain.45 The main contributor to this increase was gains in new housing construction (+11 per cent). Renovation activity was also up by 6.3 per cent, as February 1 was the deadline to qualify for the federal governmentʼs Home Renovation Tax Credit.

Against the backdrop of the recent strength of Canadaʼs economy, forecasting agencies are now more optimistic about economic prospects in 2010. Forecasters surveyed by the Conference Board of Canada now expect the economy to expand by 3.2 per cent this year compared with growth of 2.6 per cent anticipated in the winter survey.46

The effects of the unprecedented monetary and fiscal policies on the Canadian economy are expected to peak in 2010, compensating for the soft recovery in private sector investment and exports. Supported by low borrowing costs and a strong housing market, consumer spending is expected to be one of the main drivers of the economic recovery. The Canadian economy is forecast to expand between 3.2 per cent and 3.6 per cent this year. As the global economic recovery is expected to be well underway by 2011, policy makers are expected to start tightening economic policies in 2011. Economic growth in 2011 is projected to range between 2.5 per cent and 3.5 per cent.

42 Statistics Canada, The Daily, Canadian Economic Accounts, First Quarter and March 2010, May 31, 2010. 43 TD Bank Financial Group, Quarterly Economic Forecast, June 17, 2010, p.1. 44 Statistics Canada, The Daily, Canadian Economic Accounts, First Quarter and March 2010, May 31, 2010. 45 Ibid. 46 The Conference Board of Canada, Survey of Forecasters Spring 2010, p.1.



25

Figure 7: Canada Real Gross Domestic Product Forecast

(% change from preceding period)

The Conference Board of Canadaʼs Business Confidence Index declined marginally from 96.0 in the previous quarter to 95.6 per cent in the first quarter of 2010. This implies that business sentiment in Canada was essentially unchanged in the first quarter of this year. The Index of Business Confidence is a quarterly survey by the Conference Board of Canada regarding the business climate and investment intentions of senior officers of approximately 1,500 Canadian businesses.

“The mood is much the same as in the previous period. Respondents are optimistic about general economic conditions and their firmsʼ financial position, but they remain concerned about weak capacity utilization rates. Confidence will not resume its climb until more firms start operating close to capacity.”47

Sixty-seven per cent of the survey respondents indicated that they expect general economic conditions to improve over the next six months, while only four per cent said they expect conditions to worsen, bringing the balance of opinion to 63 per cent in the first quarter of 2010. According to the Conference Board of Canada, the number of positive responses have outnumbered negative responses to such a wide margin only once in the last decade.48

With demand and income expected to increase over the medium term, businessesʼ attitudes towards investment have also improved substantially. Approximately 60 per cent of the survey respondents indicated they have plans to boost expenditures over the next six months, while only 16 per cent plan to reduce capital investment over the same period. These numbers are such a substantial improvement over the first quarter of 2009 when less than a third of respondents said it was a good time to invest and nearly half said it was a bad time.

47 The Conference Board of Canada, Index of Business Confidence Spring 2010, April 2010, p.1. 48 Ibid.



26

One thing that is pulling back business confidence is the persistently poor capacity utilization rates. Less than a quarter of the survey respondents said their firm is operating at, close to, or above capacity, while 37 per cent said their firm was operating below capacity. Respondents also indicated that the excess capacity adversely affects the level of their firmsʼ capital spending.

“These numbers are especially worrisome because they represent a deterioration from the previous quarter. So while business leaders are encouraged by the nascent recovery, they also indicate that a great deal of slack remains in the Canadian economy.”49

Business sentiment among small and mid-sized businesses in Canada posted a reading of 67.3 per cent in May 2010, according to the latest Business Barometer Survey from the Canadian Federation of Independent Business (CFIB).50 The index for May was about a point above the April level and in line with its average since the late summer of 2009. Measured on a scale between 0 and 100, an index level above 50 means owners expecting their businessesʼ performance to be stronger in the next year outnumbers those expecting weaker performance. Past results suggest index levels normally range between 65 and 75 when the economy is growing.

“This level of optimism signals that the economy is growing at a subdued, but sustainable annualized rate of about 3 per cent.”51

Businesses in Alberta were among the most optimistic for the coming year, registering an index score of 71.4 just behind Saskatchewan (+74 per cent), Newfoundland and Labrador (72.8 per cent), British Columbia (+72.3 per cent) and New Brunswick (+71.9 per cent).52

CONTRIBUTORY INFLUENCES A number of factors influence the Canadian economy.

Canadian Dollar

The Canadian dollar has appreciated against most major currencies since the first quarter of 2009 and averaged 0.97 cents U.S. in the second quarter of 2010.53 But looking only at the endpoints can be a bit misleading in this quarter as May 2010 was a roller coaster ride for the Canadian dollar.

The Canadian dollar depreciated against the U.S. dollar in the first week of May as investors went back to the U.S. dollar due to worries about Greeceʼs fiscal meltdown. However, the Canadian dollar recouped most of its losses at the end of the month after the announcement of a bailout package for Greece.

According to the Conference Board of Canada, the recent strength of the Canadian dollar can be tied to the following three factors:54

Earlier interest rate hikes in Canada than in the United States. Canadaʼs relatively solid economic recovery will translate into more rapid interest rate hikes than in the United States

A more moderate inflation outlook for Canada than the outlook in the United States.

49 The Conference Board of Canada, Index of Business Confidence Spring 2010, April 2010, p.2. 50 Canadian Federation of Independent Business, Business Parameter: National small business confidence signaling

sustainable growth, June 2010. 51 lbid. 52 lbid. 53 Bank of Canada, Financial Markets Department, Monthly Average of Exchange Rates,

http://www.bankofcanada.ca/cgi-bin/famecgi_fdps 54 Conference Board of Canada, Economic Forecast, Canadian Outlook Spring 2010, p.39.



27

Continuous strengthening in oil prices. As the global economy continues to emerge from recession, demand for oil will continue to rise, providing additional impetus for the loonie.

Figure 8: Historical Exchange Rate (CAD/US, monthly averages)

Source: The Bank of Canada, Rates and Statistics, Exchange Rates

While the recent developments in Europe have caused downgrades to the Canadian dollar forecast, fundamental factors in Canada still remain favorable and the loonie is expected to regain ground once the European debt crisis subsides.

“Since EUR/USD trading comprises a huge fraction of daily global FX flows, it would be highly unlikely to see the extent of EUR/USD depreciation that weʼre expecting over the next several quarters without USD remaining well supported against most major currencies. In the next few months especially, when we expect to see the EUR continue to depreciate at a pretty swift pace, we think it is likely that weʼll see fresh 2010 highs in USD/CAD, likely north of 1.10 level, as issues in the euro zone lead to continued flight to safety toward the USD.”55

The value of the Canadian dollar is forecast to average between 99 cents U.S. and 105 cents U.S. by the end of this year, and to average just below parity in 2011.

“Our forecast calls for the Canadian dollar to move close to U.S. dollar parity by the fall before depreciating modestly through 2011 as the Federal Reserve (Fed) raises interest rates. Despite this modest depreciation, the loonie is expected to remain historically high

55 TD Securities, Global Markets, June 15, 2010, p.11.



28

by the end of next year at 93 cents U.S. This is consistent with our view of natural commodity prices continuing to be supported from demand from emerging economies.”56

Table 4: Exchange Rate Forecast – End of Quarter (USD/CAD)

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

BMO Capital Markets* June 2010 1.041 1.030 1.028 1.002 0.998 0.993 0.993 0.993

CIBC World Markets June 2010 1.020 1.030 1.010 0.990 1.040 1.000 0.990 0.980

Conference Board of Canada April 2010 1.040 1.018 1.006 1.000 0.996 0.992 0.989 0.987

RBC Financial Group June 2010 1.020 1.030 1.010 1.030 1.050 1.060 1.070 1.080

Scotiabank June 2010 1.020 1.020 1.010 1.000 0.990 0.980 0.970 0.970

TD Bank Financial Group June 2010 1.015 1.075 1.124 1.053 1.031 1.020 1.010 1.000

* Average for the quarter

Forecast Agency Date Released

2010 2011

Inflation

The Consumer Price Index (CPI) provides a broad measure of the cost of living in Canada. The Bank of Canada monitors changes in the CPI in deciding when to tighten monetary conditions to keep inflation within the range of the inflation-control target it has set (2.0 per cent per year).

The all-items CPI rose 1.4 per cent in the 12 months to May 2010, after a 1.8 per cent increase in April.57 Most of the upward pressure on the all-items CPI came from energy prices, which increased 6.2 per cent in May, after a 9.8 per cent rise in the 12 months to April. The Consumer Price Index excluding energy rose 1.0 per cent in May, following a 1.1 per cent increase in the previous month.

Overall, six of the eight major components of the all-items CPI posted price increases in the 12 months to May, with the exception of recreation, clothing and footwear, and education and reading. The decline in the recreation, education and reading was the first decline since November 2008.

Transportation prices rose 4.1 per cent, while shelter costs rose 1.3 per cent in the 12 months to May 2010.

Food prices increased 0.8 per cent in May 2010, after a 1.0 per cent increase in April. However, the increase in May was the smallest since March 2008.

While consumer prices went up in all provinces, the pace of growth was slower compared to the increases recorded in April 2010. The largest year-over-year increases were recorded in Ontario (+1.9 per cent), New Brunswick (+1.8 per cent), Nova Scotia (+1.7 per cent) and Newfoundland and Labrador (+1.7 per cent).

Consumers in Alberta paid 1.1 per cent more for the goods and services included in the all-items CPI basket in the 12 months to May 2010, following a 1.0 per cent increase in April.

56 RBC Economics, Economic and Financial Market Outlook, June 2010, p.4. 57 Statistics Canada, The Daily, Latest release from the Consumer Price Index, June 22, 2010.



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Figure 9: CPI All-items and Core (Canada)

% change from the same month of the previous year

Source: Statistics Canada, Consumer Price Index May 2010

To assess the trend of inflation, the Bank of Canada monitors the “core CPI” measure, which excludes eight of the CPIʼs most volatile components (fruit, vegetables, gasoline, fuel oil, natural gas, mortgage interest, intercity transportation and tobacco products).58

Core inflation advanced 1.8 per cent in the 12 months to May 2010, following a 1.9 per cent increase in the previous month. Most of the Mayʼs increase was attributable to a rise in prices for the purchase of passenger vehicles, passenger vehicle insurance premiums and homeownerʼs replacement costs.59

While the all-items CPI has evolved as expected, core inflation has been higher than expected in recent months. Core inflation has been hovering around 2.0 per cent since the beginning of this year, which according to the Bank of Canada, reflects “a combination of transitory and more fundamental factors, such as the higher level of economic activity and the stickiness of wage increases relative to productivity.”60 According to RBC Economics, inflation expectations also play a significant role in shaping the core inflation movements.

“Our research suggests that, unlike in the United States where output gap continues to have a significant role in explaining price increases, it is inflation expectations that are more influential in Canada. In fact, in the period following the Bankʼs adoption of inflation-targeting policy in 1991, expectations became the dominant variable in explaining movements in the core inflation rate anchored by this target. These expectations help to

58 Bank of Canada, The Bank in Brief, The Consumer Price Index, January 2000. 59 Statistics Canada, The Daily, Latest release from the Consumer Price Index, June 22, 2010. 60 Bank of Canada, Monetary Policy Report, April 22, 2010, p.11.



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explain why the inflation rate remains exceptionally close to the 2 per cent target even with the economy running with an estimated 2.25 percentage points output gap.”61

As the Canadian economic recovery strengthens, inflation expectations are beginning to normalize. Only 11 per cent of the respondents to the Conference Board of Canadaʼs Business Confidence survey indicated that they expect prices to increase at an annual rate of less than 1 per cent. Core inflation is also expected to ease through 2010 as the effects of the fiscal stimulus start to fade.

Overall, the recent forecasts for the all-items CPI range from 1.8 per cent to 2.1 per cent in 2010, following a modest increase of 0.3 per cent in 2009. In 2011, the all-items CPI is expected to increase between 1.9 per cent and 2.3 per cent.

Table 5: Consumer Price Index (all-items, year-over-year per cent change)

Q1 Q2 Q3 Q4 2009 2010 2011

CIBC World Markets June 2010 1.60 1.50 2.20 1.80 0.30 1.80 2.10

TD Bank Financial Group June 2010 1.60 1.90 2.40 2.40 0.30 2.10 2.10

BMO Capital Markets June 2010 1.60 1.60 2.50 2.10 0.30 2.00 1.90

RBC Financial Group June 2010 1.60 1.60 2.30 2.00 0.30 1.90 2.20

Scotiabank June 2010 1.70 1.50 2.00 2.40 0.30 1.90 2.30


Annual2010

Recent consensus on the core inflation is that it will increase by 1.8 per cent in 2010 and hold just below the 2 per cent target in 2011.

“We forecast core inflation to remain a tad below 2% over the next 12 months. With the overnight rate currently sitting at an ultra-low 0.50%, the Bank of Canada (BoC) remains quite far from being able to apply disinflationary pressures if need be. With a significant output gap yet to be closed and few indicators showing important prices pressures in the pipeline, we do not expect that to be needed anytime soon. What's more, in its communiqué and recent speeches, the BoC has given itself plenty of room to pause the hiking cycle - just recently initiated - if the recovery wobbles. But barring any financial market flareups, we think the BoC would prefer to continue re- normalizing its policy rate, bringing it to 1.50% by year-end.”62

Interest Rates

The Bank of Canada adjusts monetary policy by raising and lowering the target for the overnight rate, the interest rate at which major financial institutions borrow and lend one-day funds among themselves.

“Monetary policy is concerned with how much money circulates in the economy and the purchasing power of that money. Since 1935, the Bank of Canada has been responsible for regulating credit and currency markets to enhance Canadaʼs economic well-being. The Bank exerts its regulatory influence on Canadian financial markets through the use of monetary policy tools— that is, by adjusting the monetary base and interest rates and, indirectly, the exchange rate.”63

61 RBC Economics, Economic and Financial Market Outlook, June 2010, p.5. 62 TD Economics, Canadian Consumer Price Index, June 22, 2010. 63 Conference Board of Canada, Long Term Economic Forecast, Canadian Outlook 2010, April 2010, p.23.



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After removing its commitment to keep the interest rate at the lower effective bound until the end of the second quarter of 2010 in its April interest rate announcement, the Bank of Canada increased its key lending rate by one quarter of a percentage point to 0.5 per cent in June 1, 2010. With this hike, Canada became the first member of the G764 group of industrialized nations to raise interest rates since the global economic crisis.

Given the strong GDP performance during the first quarter of 2010 and higher than forecasted core inflation, the gradual increase in the overnight rate was widely expected. Against the strength of domestic demand and the uneven global recovery, the Bank of Canada believes that “this decision still leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target.”65

However, the Bank of Canada was cautious about the developments in the global economy and its downside risks. Given the recent global volatility the Bank states that “any further reduction of monetary stimulus would have to be weighed carefully against domestic and global economic developments.”66

“The decision does mean that a rebalancing of monetary policy has commenced and interest rates will be lifted as economic slack is absorbed to restrain price growth. While the Bank took the “elevator down” when cleaving rates, ongoing uncertainties and an easing pace of growth point to a very careful pace of tightening. The Bank may not hike at each meeting and might “pause” on increases if near-term financial conditions warrant. The emphasis on global conditions in todayʼs communiqué is no accident and, after the rocky last couple of years, policy-makers are keenly aware that Canada is not an island.”67

The consensus is that the 25 basis point increase in the overnight target rate represents the beginning of a monetary tightening and marks what is likely to be a long cycle of interest rate hikes. Many forecasting agencies are projecting the interest rate hikes to continue for the rest of the year and into 2011.

“Barring unforeseen shocks in global financial markets, based on our outlook for economic growth and inflation, we anticipate a sequence of 25 basis point increases at subsequent announcements, with the overnight rate at a still-stimulative 1.50% by yearʼs end.”68

“Even though Canadaʼs economy has yet to show signs of buckling under the strain in financial markets, the Bank cautioned that the timing of the unwinding policy stimulus will be contingent on both domestic and international factors. That being said, the lessening need for extremely low interest rates suggests that rates will continue to rise during the course of the second half of the year and in 2011.”69

64 Other members of the G7 are the U.S., U.K., France, Germany, Italy and Japan. 65 Bank of Canada, Press Release, Bank of Canada increases overnight rate target to ½ per cent and re-establishes

normal functioning of the overnight market, June 1, 2010. 66 lbid. 67 TD Economics, Bank of Canada Interest Rate Decision, June 1, 2010. 68 Ibid. 69 RBC Economics, Economic and Financial Market Outlook, June 2010, p.4.



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Table 6: Bank of Canada Overnight Rate – End of Quarter Projections (%)

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

BMO Capital Markets* June 2010 0.25 0.33 0.75 1.08 1.58 2.42 2.75 3.08

CIBC World Markets June 2010 0.25 0.50 1.00 1.25 1.25 1.50 1.75 2.25

RBC Financial Group June 2010 0.25 0.50 1.00 1.50 2.00 2.50 3.00 3.00

Scotiabank June 2010 0.25 0.25 0.50 1.25 1.75 2.25 2.75 2.75

TD Bank Financial Group June 2010 0.25 0.50 1.00 1.50 2.00 2.25 2.50 3.00

* Average for the quarter

2011


2010

International Trade

Exports of goods and services expanded by 2.9 per cent in the first quarter of 2010, posting the third consecutive quarterly gain after five previous quarters of decline. The growth in exports was mainly led by the growth in industrial goods and materials (+9.4 per cent) and automotive products (+4.1 per cent). Exports of travel services also increased by 4.1 per cent following six consecutive quarters of decline. The increase this quarter is mainly attributed to the Vancouver 2010 Olympic and Paralympic Games held in February and March.

Meanwhile, imports of goods and services were up 3.4 per cent in the first quarter of 2010, posting a similar increase to that recorded in the fourth quarter of 2009. The main contributors to this increase were the growth in imports of industrial goods and materials, automotive products, and machinery and equipment.

On a seasonally adjusted basis, the current account deficit — the combined balances on trade in goods, services, investment income and current transfers — with the rest of the world narrowed to $7.8 billion in the first quarter of 2010, down from a $9.8 billion deficit in the fourth quarter of 2009. A current account deficit means that Canada spent more than it earned on the items that comprise the current account balance.

Both exports and imports are expected to recover and post positive growth in the next two years. Supported by healthy domestic demand and a strong Canadian dollar, imports are expected to rise by 11 per cent in 2010 and 6 per cent in 2011. In contrast, the strong Canadian dollar and weak demand for goods from the U.S. will continue to challenge Canadian exporters. While a modest recovery of 7.2 per cent in 2010 is expected, according to the Conference Board of Canada “it will only be enough to bring export volumes back to their pre-recession share of GDP.”70

Fuelled by the concerns over Greeceʼs debt crisis, the slowdown in Europe is not expected to create significant damage to Canadaʼs trade. This is particularly because trade with the Euro zoneʼs 16 member nations account for only a small portion of Canadaʼs total trade volumes. According to a special report published by CIBC World Markets, exports to the Euro zoneʼs 16 member nations account for only four per cent of Canadaʼs total exports.71 However, slower demand from Europe can have some indirect impacts.

“That said, a slow moving Europe could have larger indirect effects on Canada. For instance, economies with bigger exposures to Europe, such as Asia will be somewhat slower as a result, cutting into volumes and prices for Canadaʼs exports. But direct effects

70 The Conference Board of Canada, Economic Forecast, Canadian Outlook Spring 2010, p.8. 71 CIBC World Markets, Economic Insights, May 28, 2010.



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wonʼt be as dramatic, with minimal export sensitivity to Europe being countered by the productivity benefits associated with increased imports of cheaper hi-tech goods.”72

Population

As of April 1, 2010, Canadaʼs population surpassed the 34-million mark, reaching an estimated population of 34,019,000.73 The first quarter population was 88,100 or 0.26 per cent above the previous quarter population. The population growth in the first quarter of 2010 was (with the exception of 2009) the largest first quarter increase since 1992.

International migration accounted for over two-thirds (71.0 per cent) of the first quarter increase, while the remaining 29 per cent was attributable to natural increase. The pace of growth for both natural increase and net migration was slower compared to the same period of last year.

Net international migration was down despite an increase in the number of immigrants in the first quarter of 2010. What was responsible for the decline in net international migration was the decline in the net number of non-permanent residents. The increase in the net number of non-permanent residents was 12,700 in the first quarter of 2010, compared with 23,100 in the first quarter of 2009.

“The decrease in the net number of non-permanent residents affected certain provinces in particular. For example, in the first quarter, the net number of non-permanent residents dropped from 4,400 in 2009 to less than 100 in Alberta in 2010, and it fell by half in Quebec, to 2,100 in 2010.”74

All provinces and territories recorded a population increase in the first quarter of 2010, with the exception of Nova Scotia. For the third consecutive quarter British Columbia (+0.37 per cent) led all provinces in population growth rate, while the western provinces all had growth rates higher than the national average. Nova Scotiaʼs population declined by 300 or 0.03 per cent in the first quarter of 2010, mainly as a result of negative natural increase in the province.

ALBERTA ECONOMY The recession in Alberta has ended and the Alberta economy is expected to grow solidly over the next two years, benefiting from an anticipated increase in oil prices. Key sectors that were hit hardest during the recession, such as construction and investment, are picking up speed in the recovery. While the natural gas side of the energy industry in Alberta remains weak, this is expected to be out weighed by continuous investment in the oil industry. Increased activity in the oil industry will also have positive spillover effects for the construction, manufacturing and retail industries.

“It must be said that the recession delivered a particularly tough blow to the provinceʼs economy, which contracted for the first time since 1986. In fact, the downturn last year has been deeper than we previously thought. The release, in April, of Statistics Canadaʼs preliminary estimate of provincial real GDP by industry for 2009 prompted us to cut our growth estimate for last year to -4.5% from -3.7% in the March Provincial Outlook. The slump in residential construction, oil and gas services, machinery manufacturing and retail trade had particularly damaging effects. Fortunately, there is mounting evidence that hard-luck sectors are no longer subtracting from growth.”75

72 CIBC World Markets, Economic Insights, May 28, 2010. 73 Statistics Canada, Quarterly Demographic Estimates January to March 2010, Publication No: 91-002-X. 74 Ibid. 75 RBC Economic, Provincial Outlook, June 2010, p.3.



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Figure 10: Alberta Industry Outlook (% change, 2002 dollars)

Source: The Conference Board of Canada, Provincial Outlook Spring 2010

Approximately 50,000 jobs were lost in Alberta between November 2008 and March 2009. However, according to the Western Center for Economic Research, taking seasonal adjustments into consideration, only 25,600 of the jobs lost over the last year and a half were due to the recession. One of the reasons why the Alberta labour market was able to fare better compared to other provinces was the ability of Alberta employees to shift from full-time employment to part-time employment. Full-time employment in Alberta dropped 3.2 per cent in 2009, while part-time employment increased 9 per cent over the same period. The jump in part-time employment was the largest increase in more than a decade.

“While the recession led to layoffs, the decline in employment in Alberta last year was not nearly as severe as the decline in overall real GDP. Prior to the recession, the provinceʼs labour markets were very tight, and this likely led many companies to hold on to their skilled workers even when things were slow. Despite the slowdown, Albertaʼs participation rate averaged 74.3 per cent last year, the highest rate in the country. And even with the high participation rate, the provincial unemployment rate still ended the year at 6.6 per cent—1.7 percentage points lower than the national average.”76

While the recovery in the labour market generally tends to lag behind the general economic recovery, the Alberta labour market is expected to regain most of its strength over the next two years. Job gains are projected to reach 22,500 in 2010, which almost erases the jobs lost during the recession. The construction and services industries are expected to create the bulk of those job gains. Consequently, the unemployment rate in Alberta will begin to adjust, declining from 6.3 per cent in 2011 to 4.1 per cent in 2014.

One of the fundamental concepts in assessing an economyʼs long-term performance is the potential output. Potential output is defined as the highest level of real GDP an economy can produce when all factors of

76 The Conference Board of Canada, Provincial Outlook Spring 2010, p.38.



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production are fully employed without pushing up inflation. Estimates of potential output depend on potential employment, capital and total factor productivity (TFP).77

“Labourʼs contribution to potential output has been strong in recent years, averaging 1.2 percentage points over 2001–10. However, labour is expected to become an increasingly insignificant contributor to potential output growth.”78

Capitalʼs contribution to potential output is measured as all available public and private capital at the moment, excluding residential assets and net of depreciation. According to the Conference Board of Canada, the net capital stock in Alberta is expected to increase each year over the next 20 years. Thus, the contribution of capital to labour is expected to average approximately 1.6 percentage points annually from 2009 to 2030.79

Total factor productivity is then defined as the efficiency with which capital and labour are used to produce output. Changes in labour skills, the mix between capital and labour and technological advances can affect TFP over time. TFP is expected to contribute on average 0.2 percentage points to potential output annually from 2009 to 2030.80

“The 2008–09 recession opened up a large negative output gap in Alberta. After a robust recovery in the short run, economic growth is expected to hold close to growth in potential output over the forecast period. For that reason, the gap between overall real GDP and potential GDP will dissipate only slowly, persisting well into the next decade. Because the economy is not expected to outperform its potential, inflationary pressures will be held in check.”

All in all, real GDP in Alberta is expected to expand 3.3 per cent this year, driven by the energy sector. With positive spillovers from the energy industry to construction and retail trade industries, and a strong labour market, the Alberta economy is expected to grow by 4.1 per cent in 2011.

“Overall, the economy is projected to expand at an average annual compound rate of 3.1 per cent over 2009–15. Weaker demographic conditions will then slow the economy to average annual growth of 2.3 per cent from 2016 to 2030 roughly in line with underlying potential output growth.”81

77 Potential employment estimates the contribution of labour to potential output when the economy is operating at

capacity and is determined by the natural rate of unemployment and participation rate. The natural rate of unemployment is defined as the minimum level of unemployment that will always exits since there are always people in transition between jobs or who are voluntarily out of work. Due to an aging population in Alberta, the natural rate of unemployment is expected trend downwards over the next 20 years. In contrast, the same aging population will cause the participation rate to also trend downwards since an aged workforce is less likely to participate in the labour force due to health problems or early retirement. However, the Conference Board of Canada expects the negative effects of a lower participation rate to outweigh the benefits from a lower natural rate of unemployment, bringing labourʼs contribution to potential output to 0.4 percentage points by the late 2020.

78 The Conference Board of Canada, Long Term Economic Forecast, Provincial Outlook 2010, p.73. 79 Ibid. 80 Ibid. 81 Ibid, p.70.



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Figure 11: Alberta Real GDP (average annual compound growth, per cent change)

Source: The Conference Board of Canada, Provincial Outlook Spring 2010

Albertans continue to be optimistic about the provincial and national economy, according to the June 2010 RBC Canadian Consumer Outlook Index.82 Thirty-three per cent of Albertans think that the local economy will improve over the next three months.83 While this is eight per cent below the March 2010 level, it is still the highest in the country, and above the national average of 26 per cent. Almost three-quarters of Albertans (71 per cent) indicate that the national economy is good, while 62 per cent think that the Canadian economy will improve over the next three months.

Twenty-two per cent of Alberta residents believe that their personal financial situation is better now than it was three months ago, slightly better than the national average of 20 per cent. However, almost half of Albertans (46 per cent) think that their personal situation will improve over the next year, again above the national average of 42 per cent.84

CONTRIBUTORY INFLUENCES A number of factors influence the Alberta economy.

Energy Industry

The price of West Texas Intermediate (WTI) crude oil averaged $78 U.S. per barrel in the second quarter of 2010, down 1 per cent from an average of $79 U.S. per barrel in the previous quarter, but up 31 per cent from an average of $60 U.S. per barrel a year ago in the second quarter of 2009.

82 The RBC Canadian Consumer Outlook Index, benchmarked as of November 2009, is conducted online via Ipsos

Reidʼs national I-Say Consumer Panel to 3,229 Canadians (499 British Columbia, 450 Alberta, 453 Saskatchewan/Manitoba, 827 Ontario, 544 Quebec, 455 Atlantic Canada).

83 RBC, Special Reports, Economic confidence growing: RBC Canadian Consumer Outlook Index, July 2, 2010. 84 Ibid.



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Figure 12: Average Price of West Texas Intermediate Crude Oil (US$/Barrel)

The energy industry has been one of the key drivers of the Alberta economy and is expected to be so over the long-term as well. Alberta has four main oil sands deposits, Athabasca, Cold Lake, Peace River and Wabasca, with a combined bitumen output of 1.7 trillion barrels.85 Currently, total production from operating projects is estimated at 1.8 millions barrel per day (bpd), with additional capacity under construction estimated at 364,200 bpd.86 As oil prices rise, energy investment in Alberta is expected to dominate economic growth by not only boosting the energy industry but also by creating significant positive spillovers for the construction and retail industries.

“Investment in the oil and gas industry forms the basis for future growth in Alberta. The recent run-up in crude prices has resulted in a bright near-term outlook, particularly for the non-conventional side of the industry. The West Texas Intermediate (WTI) price of crude is forecast to average US$81.74 this year, up nearly a third over 2009 levels. Higher prices, combined with lower costs that resulted from last yearʼs recession, have created the conditions for expansion, and more than 520,000 barrels per day (b/d) of non-conventional capacity is currently under construction. These projects will cost billions of dollars between now and 2015, generating significant output in the provinceʼs construction sector.”87

The Energy Information Administration (EIA) forecasts that WTI spot prices will average around $79 U.S. per barrel over the second half of 2010 and rise to $84 U.S. per barrel by the end of next year. The forecasts both for this year and next year were $3 lower than the EIAʼs July Outlook, due to uncertainty over the global economic recovery, debt crisis in Europe and tightening of credit by China.

“EIA has lowered its projections for world oil prices slightly for 2010. Uncertainty about economic growth in China and in the Euro zone has continued to weigh on oil markets, and

85 The Conference Board of Canada, Long Term Economic Forecast, Provincial Outlook 2010, p.70. 86 Strategy West, Existing and Proposed Canadian Commercial Oil Sands Projects, May 2010, p.1. 87 The Conference Board of Canada, Provincial Outlook Spring 2010, p.37.



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declines in equity markets have led to fears that the economic recovery may not progress as fast as had been hoped. To date, the Organization of the Petroleum Exporting Countries (OPEC) has publicly made no suggestions that it would adjust its supply targets despite some downward adjustments in oil prices.”88

Natural gas prices89 have been declining since the beginning of this year and averaged $3.26 CAD per gigajoule (GJ) in April 2010, down 4 per cent from the previous month. During the first quarter of 2010, natural gas prices averaged $4.54 CAD per GJ, up 17 per cent from an average of $3.89 CAD per GJ in the fourth quarter of 2009, but down 6 per cent from an average of $4.81 CAD per GJ in the first quarter of 2009.

According to the Conference Board of Canada, conventional activities in Alberta account for almost half of all oil and gas related investment, and thus natural gas prices play an important role for the near-term economic outlook for Alberta.90

AJM Petroleum Consultants expect the Alberta natural gas reference price to average $4.35 CAD per MCF this year and $5.45 CAD per MCF in 2011.91 The Alberta natural gas reference price is expected to increase each year and reach $7.60 CAD per MCF in 2017.

Figure 13: Average Price of Natural Gas (C$/GJ)

Source: Alberta Energy, Alberta Gas Reference Price History

88 Energy Information Administration, Short-Term Energy and Summer Fuels Outlook, June 8, 2010.. 89 Alberta Energy. The Alberta Natural Gas Reference Price (ARP) is a monthly weighted average field price of all

Alberta gas sales, as determined by the Alberta Department of Energy through a survey of actual sales transactions. The price is used for royalty purposes.

90 The Conference Board of Canada, Provincial Outlook Spring 2010, p.38. 91 AJM Petroleum Consultants, Gas Forecast, June 30, 2010.



39

There were on average 56 active drilling rigs in May 2010 in Alberta, down 10 per cent from an average 62 active drilling rigs in April, but up 76 per cent from an average of 32 active drilling rigs in the same month of the previous year. For the first five months of 2010, the number of active drilling rigs averaged 193 in Alberta, up 42 per cent from the same period of last year. Rig utilization (the share of active drilling rigs in total rigs) for the first five months of 2010 was 35 per cent, up from a utilization rate of 22 per cent during the same period last year.

According to the Canadian Association of Oilwell Drilling Contractors (CAODC), there were an average of 431 active drilling rigs in Western Canada in the first quarter of 2010.92 CAODC estimates that the number of active rigs will fall to 120 in the second quarter of 2010, but will increase in the second half of the year and average 400 both in the third and fourth quarter of 2010. Rig utilization is expected to be 42 per cent in 2010, almost double the utilization rate of 24 per cent in 2009.

Major Construction Projects

As of May 2010, close to 950 major construction projects worth $230.9 billion are either planned, underway, or have been recently completed in Alberta. Approximately 52 projects worth $143 billion are oilsands related, 26 projects worth $6.7 billion are pipeline related, 9 projects worth $1.6 billion are oil and gas related, four projects worth $4.9 billion are mining related, 13 projects worth $1.9 billion are biofuels related, and one project worth $35 million is petrochemicals related.93

Manufacturing Shipments

Following eight months of increases, manufacturing sales in Alberta decreased 2.7 per cent month-over-month to $4.98 billion in April 2010.94 Most of Aprilʼs decrease was attributable to a decline in the petroleum and coal products industry (-10.9 per cent).

Nationally, manufacturing sales were up 0.2 per cent in April 2010 and totaled $44.5 billion. Manufacturing shipments have been on an upward trend since May 2009.

Inflation

Consumers in Alberta paid on average 1.1 per cent more for the goods and services included in the Consumer Price Index (CPI) in May 2010 compared to the same month of 2009.95

While higher prices in transportation (+3.9 per cent) and health and personal care (+6.0 per cent) put upward pressure on Albertaʼs all-items price index, lower costs in shelter (-0.1 per cent) and electricity (-2.5 per cent) offset the higher prices in these areas. Albertaʼs all-items price index excluding food and energy increased 0.9 per cent year over year in May 2010.

Nationally, all provinces registered year over year price increases in May 2010.

92 The Canadian Association of Oilwell Drilling Contractors, 2010 Forecast, May 28, 2010. 93 Alberta Finance and Enterprise, Inventory of Alberta Major Projects Summary, May 2010. 94 Statistics Canada, The Daily, Monthly Survey of Manufacturing, June 15, 2010. 95 Statistics Canada, The Consumer Price Index May 2010, Publication No. 62-001-X.



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Figure 14: CPI All-items Index: Canada and provinces May 2010

(Per cent change)

Source: Statistics Canada

The most recent forecasts for consumer price index change in Alberta range from 1.4 per cent to 1.7 per cent for this year and from 1.9 per cent to 2.6 per cent in 2011. The Conference Board of Canada projects inflation in Alberta to average 2.1 per cent annually from 2011 to 2030.

According to the RBC Economics inflation forecast, Alberta will have the second lowest inflation rate at 1.6 per cent in 2010, just behind Manitoba (+1.4 per cent). Alberta is expected to post consumer price increases below the national average in both 2010 and 2011.



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Figure 15: CPI All-Items Index Forecast for 2009, 2010 and 2011 (Canada and provinces)

Year over year percentage change

Source: RBC Economics, Provincial Outlook, June 2010.

Housing Market

Housing starts in Alberta more than doubled to 5,651 units in the first quarter of 2010, compared to 2,614 starts during the first quarter of 2009.96 Both single-detached starts and multi-family starts contributed to the higher building activity during the first quarter. Single-detached starts in Alberta totaled 3,976 units during the first quarter of this year, up from 1,816 starts in the same period last year. Multi-family starts also more than doubled to 1,675 units in the first quarter of this year.

During the first quarter of 2010, total housing starts increased 190 per cent in the Calgary CMA, 167 per cent in the Edmonton CMA, and 46 per cent in Lethbridge.97 In contrast, housing starts were down 41 per cent in Grande Prairie and 38 per cent in Medicine Hat over the same period.

Single-detached starts in Alberta are expected to increase significantly this year, following two years of decline. With lower inventories and higher demand, single-detached starts are expected to almost double to 20,500 units this year and increase by a further 12 per cent to 23,000 units in 2011. While multi-family starts are also expected to post some gains this year, activity will remain historically slow. Following a sharp decline in 2009, multi-family starts in Alberta are expected to increase by 28 per cent to 7,600 units in 2010 and a further 24 per cent to 9,400 units in 2011. Overall, total housing starts in Alberta are expected to reach 28,100 units in 2010 and 32,400 units in 2011, after two years of over 30 per cent declines.98

96 Canada Mortgage and Housing Information, Housing Now – Prairie Region, Second Quarter 2010, p.2. 97 Ibid. 98 Canada Mortgage and Housing Information, Housing Market Outlook – Prairie Region Highlights, Second Quarter

2010, p.2.



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“After two years of decline, single-detached starts in Alberta will experience significant growth in 2010 as builders respond to rising demand and lower inventories. The inventory of complete and unoccupied units peaked in early 2009. Since then, inventory has declined for 12 consecutive months to approximately 1,100 units, a level representative of inventories prior to its build-up. Relatively low mortgage rates in 2010 and move-up buying will also help construction activity. Starts will move higher in 2011 with the expanding economy.”99

The number of Alberta homes sold through the Multiple Listing Services (MLS) totaled 12,362 units during the first quarter of 2010, up almost one-third from the same period in 2009.100 Alberta posted the largest year-over-year increase among prairie provinces in the first quarter. During the first three months of 2010, MLS average resale prices in Alberta rose almost 8 per cent to $351,634 compared to the same period in 2009.

“MLS sales activity improved during the second half of 2009 and this trend has persisted in the first three months of 2010. A combination of a brighter economic outlook and anticipated higher financing costs associated with purchasing a home has continued to attract buyers to the market.”101

The pace of MLS sales in Alberta is expected to moderate in the second half of the year as a result of increased interest rates and rising financing costs. MLS sales in Alberta are forecast to total 58,100 this year, a level that is similar to the annual volumes in 2009. Following a modest growth in 2010, MLS sales in Alberta are expected to increase 4.5 per cent to 60,700 sales in 2011. Similarly, MLS average sale price growth is forecast to moderate over the second half the year and post single-digit growth in 2011. The average MLS price in Alberta is expected to increase 4 per cent to $354,100 in 2010 and a further 3 per cent to $365,700 in 2011.102

“The upswing in prices is providing a better environment for sellers and this will encourage more listings and provide consumers with more choice. Rising listings will moderate price growth and by year-end, the average price is projected to be higher by almost four per cent.”103

New housing prices in Alberta increased 1.6 per cent in the 12 months to May 2010, compared with a 3 per cent increase nationally. Edmonton was one of the 3 out of 21 metropolitan areas that recorded price declines in May (-0.1 per cent). In contrast, new housing prices in Calgary posted an increase above the national average (+3.1 per cent).

Building Permits

Alberta contractors took out $2.9 billion ($1.9 billion in residential and $1.0 billion in non-residential) in building permits in the first quarter of 2010, down 24 per cent from the previous quarter but up by almost 60 per cent from the first quarter of 2009. Compared to a year earlier, the value of residential building permits more than doubled in the first quarter of 2010 while the value of non-residential building permits declined by 5 per cent.

99 Canada Mortgage and Housing Information, Housing Market Outlook – Prairie Region Highlights, Second Quarter

2010, p.2. 100 Canada Mortgage and Housing Information, Housing Now – Prairie Region, Second Quarter 2010, p.3. 101 Ibid. 102 Canada Mortgage and Housing Information, Housing Market Outlook – Prairie Region Highlights, Second Quarter

2010, p.6. 103 lbid, p.2.



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In May 2010, however, Alberta along with Ontario and Nova Scotia registered the largest month-over-month declines in the value of building permits. According to Statistics Canada, the main driver of the decline in all three provinces was the lower investment in the non-residential sector.104 Nationally, the value of building permits was down 10 per cent month-over-month in May 2010, compared with a 29 per cent decline in Alberta.

Edmonton (-36 per cent) and Calgary (-40 per cent) also posted the largest monthly declines among 34 census metropolitan areas in May 2010.

Figure 16: Value of Building Permits (Alberta), seasonally adjusted

Source: Statistics Canada, CANSIM Table No: 260006

Non-Residential Building Construction

Investment in non-residential building construction (including industrial, commercial and institutional investment) in Alberta declined 2.2 per cent in the second quarter of 2010, compared to the previous quarter, to $2.21 billion. This was the lowest level of spending (in terms of current dollars spent) since the first quarter of 2007. Year over year, investment was down 12.2 per cent, with industrial investment (-22 per cent) and commercial investment (-28 per cent) contributing to the overall decline in the second quarter of 2010. Investment in institutional construction rose 31 per cent on a year over year basis in the second quarter of 2010.105

“…the softer non-residential construction should not cause too much worry. Rather than indicative of an economic slide, it simply reflects the fact that projects are being completed, and that for now, the province has more than sufficient office and commercial space

104 Statistics Canada, The Daily, Building Permits May 2010, July 6, 2010. 105 Statistics Canada, The Daily, Investment in non-residential building construction, Second quarter 2010, July 16, 2010.



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available. The current pull-back is part of the normal ebb and flow of non- residential construction activity.”106

Retail and Wholesale Trade

Retail sales in Alberta totaled $14.83 billion in the first quarter of 2010, up 4 per cent from the previous quarter and up 6 per cent from the first quarter of 2009. During the same period, wholesale sales in Alberta totaled $14.58 billion, up 9 per cent from the previous quarter, but down 4 per cent year over year.

Year to date to the end of April 2010, retail sales in Alberta reached $17.78 billion, down 4 per cent compared to the same period of last year.107 The largest year-over-year declines were registered in electronic and home furnishing stores (-21.3 per cent) and sporting goods, hobby, book and music stores (-20.6 per cent). The only industry groups with annual gains were motor vehicle and parts dealers (+5.5 per cent), building material and garden equipment and supplies dealers (+5.0 per cent) and gasoline stations (+1.9 per cent).

Retail sales in Canada increased 7 per cent year over year in the first four months of 2010 to $144.98 billion. While all provinces recorded year over year gains in the first four months, Alberta posted the lowest increase at 5.9 per cent.

During the first four months of 2010, wholesale sales in Alberta totaled $19.5 billion, down 2 per cent from the same period of 2009.108 Over the same period, wholesale sales in Canada were up 9.3 per cent. Alberta and Manitoba were the only two provinces that registered annual declines during the first four months of 2010 compared with the same period in 2009.

Figure 17: Alberta Retail and Wholesales Sales ($ billions), seasonally adjusted


106 ATB Financial, Weekly Economic Bulletin, July 16, 2010, p.1. 107 Statistics Canada, Retail Trade April 2010, Publication No: 63-005-X. 108 Statistics Canada, Wholesale Trade April 2010, Publication No. 63-008-X.



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Average Weekly Earnings

Average weekly earnings of Alberta payroll employees increased 5.7 per cent year over year to $990 in April 2010, which was the highest annual increase among all provinces.109 Nationally, average weekly earnings of non-farm payroll employees increased 3.3 per cent year over year to $845.25 – the largest annual increase since April 2008.

All provinces registered year over year increases in average weekly earnings in April 2010. Albertans enjoyed the highest average weekly earnings in the country, followed by employees in Ontario ($871) and Saskatchewan ($835). While Prince Edward Island registered a healthy annual increase in average weekly earnings of 4.9 per cent in April 2010, the provinceʼs average wages remained the lowest in Canada, averaging $722 per week.110

Six of Canadaʼs seven largest industrial sectors registered gains in average weekly earnings. Educational services (+8.6 per cent), retail trade (+5.2 per cent), manufacturing (+4.2 per cent), and accommodation and food services (+4.2 per cent) all registered above average gains in average weekly earning in the 12 months to April 2010.111

Figure 18: Average weekly earnings of payroll employees April 2010

(Canada and provinces, seasonally adjusted)


109 Statistics Canada, Employment, Earnings and Hours April 2010, Publication No.72-002-X. 110 Ibid. 111 Ibid.



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Bankruptcies and Employment Insurance

A total of 2,202 Albertans and Alberta businesses filed for bankruptcy in the first quarter of 2010. Business and consumer bankruptcies in Alberta during the first quarter were up 4.5 per cent from the previous quarter, but down 11 per cent year over year.112 Both business (-7.9 per cent) and consumer (-10.9 per cent) bankruptcies were down compared with the same quarter of last year.

Nationally, total business and consumer bankruptcies declined 16 per cent year over year to 24,491 in the first quarter of this year. Declines in both business and consumer bankruptcies contributed to the overall decrease. Quebec (-8.9 per cent) registered the largest decline in total bankruptcies compared to the previous year, while Prince Edward Island (+19.3 per cent) had the largest increase.

Figure 19: Personal and Business Bankruptcies in Alberta

Source: Office of the Superintendent of Bankruptcy Canada

The number of Albertans receiving regular Employment Insurance (EI) benefits averaged 55,763 in the first quarter of 2010, down almost 25 per cent from an average of 70,947 beneficiaries in the previous quarter, and up 61 per cent from an average of 34,623 beneficiaries in the first quarter of 2009.113

The number of Albertans receiving regular EI benefits declined 4.7 per cent month over month to 49,900 in April 2010 – the sixth consecutive decline and the largest monthly decline among all provinces.

According to Statistics Canada, the number of EI beneficiaries in Alberta fell 20.6 per cent since the peak of June 2009, the second fastest rate of decline in the country after Ontario (-26.5 per cent).114

112 Office of the Superintendent of Bankruptcy Canada, Insolvency Statistics in Canada – Fourth Quarter of 2009. 113 Alberta Finance and Enterprise, Monthly Economic Review, June 2010, p.18. 114 Statistics Canada, The Daily, Employment Insurance April 2010, June 18, 2010.



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In April 2010, 35 per cent of the EI beneficiaries in Alberta were from Calgary and 32 per cent were from Edmonton. Compared to 2009, the number of EI beneficiaries declined both in Edmonton (-4.1 per cent) and Calgary (-2.1 per cent).115 Over the same period, 9 out of the 12 large centres in Alberta registered declines in the number of EI beneficiaries.

“This was a marked change from previous months when virtually all large centres in the province posted year-over-year increases. The most pronounced percentage decline occurred in Lloydminster. In Calgary, the number of beneficiaries edged down by 370 to 17,600 and in Edmonton, it decreased by 680 to 15,800. These are the first year-over-year declines for both Calgary and Edmonton since the beginning of the economic downturn in the fall of 2008.”116

Figure 20: Decline in Employment Insurance Beneficiaries: Canada and Provinces

(per cent decline since June 2009)

Source: Statistics Canada, CANSIM Table 276-0001

Population

Albertaʼs population grew by 0.35 per cent to just over 3,724,800 persons from January 1, 2010 to April 1, 2010, posting the provinceʼs smallest first-quarter gain since 1996.117 The slowdown was mainly attributable to the lower net gains in interprovincial migration. While, Albertaʼs average first-quarter gains in net interprovincial migration averaged 5,600 between 1995 and 2009, growth was only slightly more than 300 in the first quarter of 2010. The first quarter gain was among the smallest for a first quarter since 1995.

In contrast, Alberta has the highest rate of natural increase in Canada during the first quarter of 2010. The rate of natural increase during the first quarter in Alberta was 7.2 per thousand compared with a national

115 Statistics Canada, The Daily, Employment Insurance April 2010, June 18, 2010. 116 Ibid. 117 Statistics Canada, Quarterly Demographic Estimates January to April 2010, Publication No.91-002-X.



48

average of 3.0 per thousand. This was also Albertaʼs highest first quarter rate of natural increase since 1996.

However, due to an increasing share of baby boomers, natural increase in Alberta is projected to decline steadily from 2015 trough 2030 according to the Conference Board of Canada. The share of the population aged 65 and over in Alberta was 10.6 per cent in 2009, and is projected to reach 19 per cent in 2030.118 An aging population will reduce the birth rate, and increase the mortality rate, resulting in a lower rate of natural growth.

“Population growth is influenced by births, deaths, and net migration. The fertility rate for the province (defined as the average number of live births per woman) is projected to remain constant at 1.78 over the forecast period (2010-2030), well below the replacement rate of 2.1 per cent needed to maintain long-term population stability by natural means.”119

While, the rate of natural increase is expected to decline over the medium term, it is going to be more than offset by the gains in net migration. Supported by the continuous investment in Albertaʼs oil sands, net interprovincial migration is expected to average 9,700 annually from 2015 through 2030. Over the same period net international migration is also expected to increase each year through 2030 and reach 21,700 in 2030.120

“Ongoing expansion in the energy sector will attract a steady flow of labour (and capital) from other provinces. This positive inflow of migrants will offset a weak natural rate of population increase over the forecast period (2010-2030). The recent downturn dampened some of the enthusiasm for relocation to Alberta, but the inflow remains elevated. On average, the province is expected to gain 16,300 more people than it loses each year over 2009 to 2015.”121

Overall, Albertaʼs population is expected to reach 4.9 million by 2030, representing an average annual compound growth rate of 1.4 per cent from 2011 to 2030. This compares with an anticipated average annual compound growth rate of 2.3 per cent between 2001 and 2010, and 1.7 per cent over 1991 to 2000.

118 The Conference Board of Canada, Long Term Economic Forecast, Provincial Outlook 2010, p.70. 119 Ibid, p.71. 120 Ibid, p.72. 121 Ibid.



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Figure 21: Alberta Population Outlook (Per cent change from the previous year)

Source: Conference Board of Canada, Long Term Economic Forecast Provincial Outlook 2010

CALGARY REGION ECONOMY After being one of the nationʼs best performers from 2000 to 2007, Calgaryʼs economy suffered significantly from the global economic downturn in 2009. A contraction of 3.1 per cent in 2009 was Calgaryʼs largest and first contraction since 1989.122 This was mainly due to declines in the goods-producing sector – mainly the manufacturing sector (which declined by 10.8 per cent) and in the wholesale and retail trade sector, which declined by 10.2 per cent as a result of weak consumer spending.

During the first half of 2010, Calgaryʼs economic recovery appears to be supported by a strong housing market and increasing oil prices. However, despite those gains, Calgaryʼs economy is performing at a tepid pace. According to Calgary Economic Development, “Calgaryʼs economy really has not been performing equivalent to the recovery being seen in Canada overall” due to uncertainties around the global economic recovery.123

Calgary Economic Development identifies the following factors as the drivers of the economic volatility: a) economic worries in the European Union, particularly Greeceʼs debt crisis, b) uncertainty in the U.S. economy, c) slowing of the Chinese economy due to softening domestic demand and inflation; and d) potential increased regulation and scrutiny in the global financial sector.124

122 The Conference Board of Canada, Metropolitan Outlook – Spring 2010, p.4. 123 Calgary Economic Development, State of the Economy Calgary Semi-Annual Economic Review, June 2010, p.3. 124 Ibid.



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Figure 22: Real Gross Domestic Product Forecast: Calgary (% change, 2002 dollars)

Source: Conference Board of Canada, Metropolitan Outlook 1 Spring 2010

The Conference Board of Canada expects Calgaryʼs economy to expand by 2.8 per cent this year and 4.3 per cent in 2011, supported by a rebound in construction and services-producing industries.125 However, Calgary Economic Development is more cautious about the short-term outlook for Calgaryʼs economy and projects real GDP growth of between 0.8 per cent and 1.2 per cent in 2010 due to the volatility in the global markets.126

“In summary, Calgary has weathered, and continues to weather, the recession in a manner that should bring about the necessary changes that were creating an unsustainable set of market dynamics during the overheated years of 2005, 2006 and 2007. In many ways, companies are pushing the “reset” button and getting their business in order. They are taking their time to assess the true recovery. They are being careful and measured. And that is not necessarily a bad thing. But for many, it isnʼt the right “feel” - the economy still feels slow, they are struggling with unemployment, or are uncomfortable in an environment of restrained spending. It isnʼt the best of times, it isnʼt the worst of times. They are new times. Overall, Calgary is performing at a tepid pace, one that will likely be the new norm for a few years to come as the global economy finds its footing again.”127

CONTRIBUTORY INFLUENCES A number of factors influence the Calgary economy.

125 Conference Board of Canada, Metropolitan Outlook 1 Spring 2010, p.4. 126 Calgary Economic Development, State of the Economy Calgary Semi-Annual Economic Review, June 2010, p.9. 127 Ibid.



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Inflation

Consumer prices increased 1.1 per cent in the Calgary CMA in the 12 months to May 2010. The main upward pressure came from increases in water, fuel and electricity (+3.4 per cent). Over the same period, the cost of shelter in the Calgary CMA increased 0.3 per cent.128

Nationally, Toronto had the highest year-over-year inflation rate in May 2010 at 2.1 per cent, while all other major Canadian cities had an annual inflation rate of less than 2.0 per cent. Calgaryʼs inflation rate was among the lowest in Canada behind Victoria (+0.2 per cent), Winnipeg (+0.5 per cent) and Montreal (+0.9 per cent).129

The Conference Board of Canada expects inflation in the Calgary CMA to average 1.7 per cent in 2010 and increase to 2.5 per cent in 2011. In contrast, Calgary Economic Development forecasts inflation in the Calgary CMA to range between 0.8 per cent and 1.1 per cent in 2010, which is lower than the Conference Board of Canadaʼs forecast.

Figure 23: Consumer Price Index Forecast: Calgary (% change)

Source: Conference Board of Canada, Metropolitan Outlook 1 Spring 2010

Housing Market

Total housing starts in the Calgary Census Metropolitan Area (CMA) increased 80 per cent year-over-year to 862 units in May 2010, which was the ninth consecutive monthly increase. Mayʼs increase was supported by the gains in both single-detached and multi-family starts.130 A total of 634 single-detached units broke

128 Statistics Canada, The Consumer Price Index May 2010, Publication Np.62-001-X. 129 Ibid. 130 Multi-family housing starts include semi-detached, row and apartment units.



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ground in May 2010, representing a 66 per cent increase from a year earlier. The gains in multi-family starts were more profound with multi-family starts increasing 133 per cent year over year to 228 units in May 2010.

In comparison, total housing starts reached 989 units in the Edmonton CMA in May 2010, compared with 346 units started in May 2009. To the end of May 2010, housing starts in the Edmonton CMA totaled 4,428 units, significantly up from 1,462 units started during the same period of 2009. As in the case of the Calgary CMA, both single-detached and multi-family starts recorded gains in May 2010 in the Edmonton CMA.

Table 7: Housing Starts - January to May 2010

2009 2010 2009 2010 2009 2010

Alberta (10,000+) 2,976 6,856 1,250 3,351 4,226 10,207 141.5%

Calgary CMA 1,175 2,804 372 1,128 1,547 3,932 154.2%

Calgary City 869 2,187 250 938 1,119 3,125 179.3%

Edmonton CMA 849 2,554 613 1,874 1,462 4,428 202.9%

Edmonton City 435 1,470 361 1,514 796 2,984 274.9%

% Change

2009–2010

Source: Canada Mortgage and Housing Corporation

Single Multiple Total

Area

After five months of production, single-detached starts in the Calgary CMA reached 2,804 units, compared with 1,175 units during the same period of last year. However, the pace of single-detached starts is expected to moderate over the second half of the year due to higher mortgage rates and increasing inventory levels. Despite the slowdown in the growth rate, single-detached starts in the Calgary CMA are expected to reach 6,500 units this year, up 36 per cent from the 2009 level.131 Benefiting from stronger economic conditions, single-detached starts are forecast to increase a further 11 per cent to 7,200 units in 2011.

“Housing market conditions for single-detached builders have been much more favourable at the beginning of 2010 compared to the previous year. Builders have been facing stronger demand conditions and lower inventory levels, which have contributed to higher starts.”132

During the first five months of 2010, multi-family starts in the Calgary CMA have reached 1,128 units, compared with 372 units started in the same period of 2009. Activity in the multi-family starts is forecast to reach 2,300 units this year, representing an increase of 49 per cent from 2009. Multi-family starts in the Calgary CMA are expected to increase 35 per cent to 3,100 units in 2011.133

Canada Mortgage and Housing Corporation (CMHC) is forecasting total housing starts in the Calgary CMA will increase 39 per cent to 8,800 units in 2010, and a further 17 per cent to 10,300 units in 2011. However, this level of activity will remain below the average of 12,641 units registered from 2000 to 2009.

According to the Conference Board of Canada, total housing starts in the Calgary CMA will reach 8,500 units in 2010 and 9,938 units in 2011. Starts are forecast to hover just over 10,500 units from 2012 to 2013.

131 Canada Mortgage and Housing Corporation, Housing Market Outlook Calgary CMA, Spring 2010, p.2. 132 Ibid. 133 Ibid, p.3.



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Figure 24: Housing Starts Forecast: Calgary CMA

While housing starts are generally up in Calgary, home sales continued to decline on a year-over-year basis in June 2010 according to the latest figures released by the Calgary Real Estate Board. The number of single-family metro134 homes sold in June in Calgary declined 42 per cent to 1,061 units compared with 1,837 sales in June 2009. The number of single-family metro homes sold was also 16 per cent lower than 1,262 sales in May 2010. The number of metro condo units sold in Calgary in June 2010 was 445, down 14 per cent from the previous month and down 40 per cent year-over-year.135

To the end of June 2010, the number of single-family homes sold in Calgary reached 6,851 units, down 4 per cent from 7,160 units sold during the same period in 2009. In contrast, during the first half of the year a total of 3,121 metro condos sold in Calgary, up 5 per cent from 2,974 sales during the same period in 2009.136

The median price of a single-family home and a metro condo unit in Calgary in June was up compared to the same month of 2009. The median price of a single-family home in Calgary was $418,900, virtually unchanged from a month earlier, and up 5 per cent from $399,000 in June 2009. The median price of a metro condo in Calgary in June 2010 was $269,900, down 4 per cent from May 2010, but up 2 per cent from $265,500 in June 2009.

CMHC is forecasting MLS sales in the Calgary CMA to reach 25,000 units this year and rise another 4 per cent to 26,000 units in 2011 supported by higher employment and income. The average MLS resale price in Calgary is forecast to increase year-over-year in 2010 after two consecutive years of declines. It is expected to reach $403,000 in 2010 and $418,000 in 2011.

With the healthy boost in Calgaryʼs housing market during March, CMHC is forecasting MLS sales in the Calgary CMA to increase 11 per cent to 27,600 sales in 2010. The number of MLS sales in the Calgary CMA 134 Calgary Real Estate Board — all Calgary metro MLS statistics include properties listed and sold only within Calgary

City limits. 135 Calgary Real Estate Board, Housing Statistics Calgary Metro Statistics, June 2010, p.1. 136 Ibid.



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will be slightly above 2010 levels at 28,500 sales in 2011.137 Average MLS resale prices in Calgary are forecast to increase 5.5 per cent to $407,000 in 2010, and a further 3.9 per cent to $423,000 in 2011.

For the Edmonton CMA, MLS sales are forecast to show no significant change from 2009 levels in 2010, totaling 19,250 sales this year. As the economic recovery takes hold, MLS sales in the Edmonton CMA are expected to reach 20,000 units, which would be the best performance since 2007.138 Average MLS resale prices in Edmonton are forecast to reach $333,000 (+3.9 per cent over 2009) in 2010 and $346,000 (+3.6 per cent over 2010) in 2011.139

The rental market in the Calgary CMA is expected to improve in 2010 over the last year when the average vacancy rate hit 5.3 per cent. With improving economic conditions and higher home ownership costs, demand for homeownership is forecast to decline in 2010, bringing the vacancy rate to 4.9 per cent in October 2010 and 3.9 per cent in October 2011.140 However, the decline in vacancy rates is not forecast to push the average rent up. The average rent for a two-bedroom apartment in the Calgary CMA is forecast to be slightly below the 2009 level at $1,090 per month in October 2010.

Building Permits

The value of building permits issued in Calgary during the first quarter of 2010 totaled $864 million, down 39 per cent from the previous quarter but up 49 per cent year-over-year. Compared to the first quarter of 2009, the value of residential permits was up 150 per cent, while the value of non-residential permits was down 12 per cent.

In May 2010, the total value of building permits issued declined in 18 out of 34 metropolitan areas in Canada. The largest declines were in Edmonton, Calgary and Windsor. In contrast, Montreal and Vancouver had the largest gains, primarily due to increases in multi-family and industrial permits.141

Calgary builders took out $201.6 million ($147.2 million in residential, $54.4 million in non-residential) in permits in May 2010, down 39 per cent from April 2010. This overall decline was mainly a result of declines in the single-family and commercial permits. The value of residential permits declined 34 per cent from the previous month to $147 million in May 2010, while the value of non-residential permits was down 50 per cent over the same period.

137 Canada Mortgage and Housing Corporation, Housing Market Outlook Calgary CMA, Spring 2010, p.8. 138 Canada Mortgage and Housing Corporation, Housing Market Outlook Edmonton CMA, Spring 2010, p.8. 139 Ibid. 140 Canada Mortgage and Housing Corporation, Housing Market Outlook Calgary CMA, Spring 2010, p.6. 141 Statistics Canada, Building Permits May 2010, Publication No. 64-001-X.



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Figure 25: Value of Building Permits - Calgary CMA

Source: Statistics Canada, CANSIM Table 260003

Non-Residential Building Construction

Investment in non-residential building construction in the Calgary CMA declined 1.9 per cent in the second quarter of 2010 to $950 million, compared to the previous quarter. Year over year, investment declined 13 per cent.

During the second quarter of 2010, investment in non-residential building construction was down in 17 of 34 metropolitan areas in Canada, compared to the previous quarter, with Vancouver and Edmonton posting the largest declines.

Office Market

Calgaryʼs office vacancy has been steadily increasing while asking rents have been steadily decreasing over the past 18 months. This created an opportunity for tenants to move up in a higher quality or better location building using the same budget set almost two years ago. As a result vacancy rates between the classes of buildings diverged dramatically, with class A having the lowest vacancy rate and class C having the highest.

However, vacancy rates have declined in all areas of Calgary during the first quarter of 2010, supported by the improved economic conditions. Calgaryʼs overall office vacancy rate declined to 11 per cent in the first quarter of 2010, down from 11.6 per cent in the final quarter of 2009, but still up from 7.6 per cent in the first quarter of 2009.142 The office vacancy in Calgary is expected to rise at least for the next two years as office space completions will outpace space absorptions.

“Impending completions of more new inventory will drive up vacancy rates twice as fast as the market can absorb the space, but the key point here is that even though vacancy is rising, occupancy is increasing as well. Unoccupied new construction and vacant backfill

142 Avison Young, Calgary Office Market Report – First Quarter 2010, p.1.



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space will continue to push vacancy rates up, but economic growth and corporate expansion will continue to absorb more space. Peak city-wide office vacancy is projected to be around 15% in spring 2012. The vacancy numbers from this downturn are not expected to be as severe as those seen in the downturns of the early 1980s and 1990s when vacancy rates over 20% were recorded.”143

There are currently 10 office buildings under construction in Calgary, with approximately 5 million square feet space, of which 37 per cent is still available for lease. Thirty-nine per cent of the 975,000 square feet completed so far in 2010 is also still available for lease.

The Downtown Calgary office vacancy declined from 10.2 per cent in the fourth quarter of 2009 to 9.7 per cent in the first quarter of 2010, posting the first decline since the third quarter of 2006.144 The overall vacancy rate represents 4.5 per cent head lease space and 5.2 per cent sublease space. Currently in Downtown Calgary, the average asking net rental rate sits at $35 per square foot (psf) for class AA space, $25 psf for class A space, $15 psf for class B space and $12 psf for class C space. For new construction, the current average asking net rental rate is $33 psf. Vacancy rates in Downtown Calgary are expected to close this year around 13 per cent and peak at around 17 per cent in spring 2012.145

“The Downtown market has entered the calm before the storm, experiencing the first decline in vacancy since third quarter 2006. This will be a short-lived situation though, as once those buildings still under construction are completed, available space will rise once again, pushing the vacancy rate up as well. The Downtown Calgary office leasing market is facing tough times over the next couple of years.”146

The vacancy rate for Beltline Calgary is 12.4 per cent for the first quarter of 2010, down from 13.3 per cent in the previous quarter, but up from 8.3 per cent year-over-year. Looking at specific classes of buildings, class A has the lowest vacancy at 9.0 per cent, while class C has the highest at 17.3 per cent. With only one building under construction and no new buildings entering the market in 2010, the vacancy rate is assumed to be at its peak in 2010.147

The Suburban North was the only area in Calgary with a decreasing vacancy rate in 2009. The Suburban Northʼs vacancy rate for the first quarter of 2010 declined to 11.5 per cent from 13.6 per cent in the fourth quarter of 2009, and down from 14.3 per cent year-over-year.

143 Avison Young, Calgary Office Market Report – First Quarter 2010, p.1. 144 Ibid, p.2. 145 Ibid, p.3. 146 Ibid, p.2. 147 Ibid, p.4.



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Table 8: Calgary Office Market Q1 2009 and Q1 2010

Q1 2009 Q1 2010 Q1 2009 Q1 2010

5.6% 9.7%

New Construction $37.00 $33.00

AA Class $45.00 $35.00

A Class $37.00 $25.00

B Class $25.00 $15.00

C Class $20.00 $12.00

8.3% 12.4%


A Class $26.00 $22.00

B Class $21.00 $14.00

C Class $17.00 $10.00

10.1% 15.0%


A Class $24.00 $18.00

B Class $19.00 $15.00

C Class $13.00 $10.00

14.3% 11.5%


A Class $21.00 $16.00

B Class $16.00 $12.00

C Class $12.00 $10.00

Suburban North

Source: Avison Young, Calgary Office Market Summary Report First Quarter 2009 and 2010.

Average Asking Net Rental Rates (psf)

Vacancy RateCategory

Downtown

Beltline

Suburban South

Major Projects

As of May 2010, there were approximately 170 major projects worth $22.5 billion that were either proposed, announced or under construction in Calgary. The project sectors with the greatest value in May 2010 were Commercial/Retail (7.2 billion), Infrastructure (5.2 billion), and Institutional (3.7 billion).

The number of major Calgary projects increased one per cent from 168 in February 2010 to 170 in May 2010. The total value of these projects also increased by 3.0 per cent over the same period.

Table 9: Calgary Major Projects

(Proposed, Announced or Under Construction)

Project Sector Total Projects Cost ($mill)

Commercial/Retail 31 7,217.2

Commercial/Retail/Residential 2 1,500.0

Infrastructure 58 5,271.6

Institutional 26 3,761.7

Manufacturing 1 6.0

Power 3 1,648.0

Residential 26 1,004.5

Tourism/Recreation 23 2,160.0

Total 170 22,569.0

Source: Calgary Economic Development May 2010 Calgary Major Projects



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Population

Calgaryʼs population was estimated at 1,065,455 in April 2009, up 2.2 per cent from a year earlier. This pace of growth was essentially unchanged from the growth rate experienced between 1999 and 2009. Both natural increase and net migration stayed level compared to a year earlier.

According to a recent report published by Alberta Finance and Enterprise, the Calgary regionʼs148 population is forecast to increase to 2.53 million by 2050 and account for 41 per cent of Albertaʼs population.149 The Calgary region (Census Division 6) along with Wood Buffalo region (Census Division 16) and Red Deer region (Census Division 8) is expected to have above provincial average growth rates in 2010 under the medium scenario.

148 The Calgary region, Census Division 6, extends to Olds in the north and High River in the south. 149 Government of Alberta, Finance and Enterprise, Alberta Population Projections by Census Division, 2010-2050, June

7, 2010.



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TRENDS IN THE LABOUR MARKET This section examines labour market information for Canada, Alberta, and the Calgary Region. The information provided in this section is based upon Statistics Canadaʼs Labour Force Survey.

CANADA

Q2 2010 Employment in Canada averaged 17,119,400 in the second quarter of 2010, an increase of 175,100 from the previous quarter. Employment increased in all three months of the quarter, with April 2010 recording the largest gain (+109,000). According to Statistics Canada, this was the largest monthly employment gain in percentage terms since August 2002.150 Employment increased by 25,000 in May 2010, and by 93,000 in June 2010.

“Employment has been on an upward trend since July 2009, increasing by 403,000 (+2.4%). These gains offset nearly all the employment losses observed during the labour market downturn which began in the fall of 2008.”151

Employment gains in June 2010 also surprised economists. The consensus for June was for a net gain of 20,000 jobs, however, the increase of 93,000 in employment was almost five times the consensus forecast.152

“Canadaʼs recovery has outpaced prior ones, with employment nearly bouncing back to pre-recessionary highs after just five quarters. This pace is almost twice as fast as that seen after the 1982 recession (nine quarters), and well ahead of the sluggish recovery in the early to mid-1990s (14 quarters).”153

Year over year, employment in Canada increased by 293,300 or 1.7 per cent in the second quarter of 2010.

Table 10: Labour Force Survey Statistics - Canada

Canada Apr-10 May-10 Jun-10 Q2 2010 Q1 2010

Quarterly

Change Q2 2009

Annual

Change

Population 27,618,400 27,651,800 27,696,600 27,655,600 27,554,400 101,200 27,253,300 402,300

Labour Force 18,570,300 18,603,000 18,665,000 18,612,800 18,466,400 146,400 18,371,000 241,800

Employed 17,071,900 17,096,600 17,189,800 17,119,400 16,944,300 175,100 16,826,100 293,300

Unemployed 1,498,300 1,506,400 1,475,200 1,493,300 1,522,100 -28,800 1,544,900 -51,600

Participation Rate 67.2% 67.3% 67.4% 67.3% 67.0% 0.3% 67.4% -0.1%

Employment Rate 61.8% 61.8% 62.1% 61.9% 61.5% 0.4% 61.7% 0.2%

Unemployment Rate 8.1% 8.1% 7.9% 8.0% 8.2% -0.2% 8.4% -0.4%

Source: Statistics Canada, Labour Force Survey, seasonally adjusted

150 Statistics Canada, Labour Force Survey April 2010, May 7, 2010. 151 Statistics Canada, Labour Force Survey June 2010, July 9, 2010. 152 TD Bank Financial Group, Provincial Employment Monitor, July 9, 2010. 153 Scotiabank Group, Weekly Trends, July 9, 2010, p.5.



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Figure 26: Employment in Canada

Canadaʼs unemployment rate averaged 8.0 per cent in the second quarter of 2010, down from 8.2 per cent in the previous quarter and down from 8.4 per cent year over year. The unemployment rate in June 2010 fell to 7.9 per cent, the first time it has been below 8.0 per cent since January 2009.154

Figure 27: Unemployment Rate in Canada

154 Statistics Canada, Labour Force Survey June 2010, July 9, 2010.



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Employment by Type of Work, Gender and Age

On a quarter over quarter basis, full-time employment accounted for two-thirds of the employment gains in the second quarter of 2010. Since July 2009, employment growth has been concentrated in full-time work.155 Year over year, full-time employment increased by 251,500 or 1.9 per cent in the second quarter of 2010, and part-time employment increased by 42,000 or 1.3 per cent.

“The majority of jobs created in June were private sector and full-time jobs, extending a trend that weʼve seen since the start of the recovery. Since the labour market turnaround started in August last year, Canada has created, on average, 37,000 jobs/month, mostly full-time and private sector jobs, which is a clear positive for the sustainability of household incomes and spending. In fact, weʼve seen an acceleration of private sector and full-time hiring as weʼve moved further into the recovery, which clearly reflects improving business confidence.”156

Men accounted for over 80 per cent of the employment gains on a quarterly basis in the second quarter of 2010 (+143,300), and for approximately 60 per cent on a year over year basis (+178,800).

“In April, two-thirds of the employment growth was among men aged 25 and over (+72,000), the strongest monthly increase for this group since comparable data became available in 1976.”157

Employment for youth aged 15 – 24 managed a 1.1 per cent quarterly gain in the second quarter of 2010, as a result of substantial increases in April and June 2010. On a year over year basis however, employment was down 0.2 per cent for youth in the second quarter of 2010.

“Employment also rose among youths aged 15 to 24 in June, up 21,000. This pushed their unemployment rate down 0.5 percentage points to 14.6%. Since July 2009, youth employment has grown by 60,000, but still remains 148,000 below the October 2008 peak.”158

Statistics Canada also collects labour market information on youth from May to August each year. The Labour Force Survey provides additional information on employment conditions for youth aged 15 – 24 with intentions of returning to school in the fall. Year over year comparisons can only be made since the data is not seasonally adjusted. In June 2010, there were 63,000 more placements for students aged 20 – 24 and 11,000 more placements for students aged 17 – 19, when compared to June 2009. The unemployment rate declined 3.7 percentage points to 10.3 per cent for students aged 20 – 24, and fell 2.1 percentage points to 16.0 per cent for students aged 17 – 19.159

Employment for those aged 55+ was up 2.4 per cent on a quarterly basis in the second quarter of 2010, and accounted for just over half of all of the employment gains year over year. Employment growth was the fastest for this age group on a year over year basis in the second quarter of 2010 (+5.6 per cent).

155 Statistics Canada, The Daily, Labour Force Survey April 2010, May 7, 2010. 156 CIBC World Markets, Economic Flash!, July 9, 2010, p.1. 157 Statistics Canada, The Daily, Labour Force Survey April 2010, May 7, 2010. 158 Statistics Canada, The Daily, Labour Force Survey June 2010, July 9, 2010. 159 Ibid.



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Table 11: Employment in Canada by Type of Work, Gender and Age

Canada Apr-10 May-10 Jun-10 Q2 2010 Q1 2010

Quarterly

Change Q2 2009

Annual

Change

Employment 17,071,900 17,096,600 17,189,800 17,119,400 16,944,300 175,100 16,826,100 293,300

Full-time 13,768,400 13,835,700 13,884,600 13,829,600 13,714,000 115,600 13,578,100 251,500

Part-time 3,303,500 3,261,000 3,305,200 3,289,900 3,230,300 59,600 3,247,900 42,000

Men 8,902,400 8,917,900 8,996,600 8,939,000 8,795,700 143,300 8,760,200 178,800

Women 8,169,500 8,178,700 8,193,300 8,180,500 8,148,700 31,800 8,065,800 114,700

15 - 24 years 2,438,100 2,436,800 2,457,500 2,444,100 2,417,800 26,300 2,449,500 -5,400

25 - 54 years 11,759,000 11,765,000 11,806,400 11,776,800 11,695,100 81,700 11,630,300 146,500

55 years + 2,874,900 2,894,900 2,925,900 2,898,600 2,831,400 67,200 2,746,300 152,300


Employment by Industry

Employment increased in eleven industries quarter over quarter, with the largest gains (in numbers) occurring in professional, scientific and technical services (+43,900), trade (+40,500), construction (+33,300) and business, building and other support services (+32,200).

“…employment in construction edged up 11,000 (In June 2010). This industry has had the fastest growth rate of all major industry groups since July 2009 (+8.3% or +94,000).”160

Employment declined in five industries in the second quarter of 2010, with employment in accommodation and food services down by 18,100 and down by 15,400 in manufacturing.

“The goods sector, which saw a boost in hiring at the start of the recovery, has slowed down the rate of hiring despite the ramp-up in output. That may be due to attempts to improve productivity in light of the strength of the Canadian dollar. The manufacturing sector is the case in point, with an average of 2,000 jobs lost per month in the last five months despite the surge in output.”161

On an annual basis, employment increased in eleven industries as well in the second quarter of 2010, with professional, scientific and technical services (+85,500 or 7.2 per cent) and construction (+77,900 or 6.5 per cent) posting the strongest growth. Employment was down more than 5.0 per cent in the other services and agriculture industries, with employment in agriculture declining by 7.7 per cent year over year in the second quarter of 2010.

160 Statistics Canada, The Daily, Labour Force Survey June 2010, July 9, 2010. 161 CIBC World Markets, Economic Flash!, July 9, 2010, p.2.



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Table 12: Employment in Canada by Industry

Canada Q2 2010 Q1 2010

Quarterly

Change Q2 2009

Annual

Change

All Industries 17,119,400 16,944,300 175,100 16,826,100 293,300

Agriculture 300,900 305,000 -4,100 326,100 -25,200

Natural resources 331,000 322,900 8,100 315,500 15,500

Utilities 149,700 145,700 4,000 148,200 1,500

Construction 1,218,900 1,185,600 33,300 1,141,000 77,900

Manufacturing 1,744,100 1,759,500 -15,400 1,791,400 -47,300

Trade 2,700,100 2,659,600 40,500 2,623,800 76,300

Transportation & warehousing 793,200 792,200 1,000 828,400 -35,200

Finance, insurance, real estate & leasing 1,117,200 1,110,200 7,000 1,076,100 41,100

Professional, scientific & technical services 1,276,700 1,232,800 43,900 1,191,200 85,500

Business, building & other support services 686,200 654,000 32,200 684,100 2,100

Educational services 1,230,700 1,231,500 -800 1,187,900 42,800

Health care & social assistance 2,030,000 2,002,200 27,800 1,947,200 82,800

Information, culture & recreation 770,700 771,700 -1,000 778,400 -7,700

Accommodation & food services 1,067,700 1,085,800 -18,100 1,062,700 5,000

Other services 757,500 755,400 2,100 800,800 -43,300

Public administration 944,700 930,100 14,600 923,200 21,500


ALBERTA

Q2 2010 Employment in Alberta increased by a modest 14,500 in the second quarter of 2010, compared to the previous quarter, averaging 1,991,100.

“Alberta continues to lag well behind the rest of the country (especially central Canada) in job creation. Nationally, employment has essentially returned to its peak before the recession, reached in October 2008. However, Albertaʼs total employment has shown only modest growth and remains well below the pre-recession peak.”162

Year over year, employment rose by only 4,300 or 0.2 per cent in Alberta in the second quarter of 2010.

162 ATB Financial, Weekly Economic Bulletin, July 9, 2010, p.1.



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Table 13: Labour Force Statistics - Alberta

Alberta Apr-10 May-10 Jun-10 Q2 2010 Q1 2010

Quarterly

Change Q2 2009

Annual

Change

Population 2,912,600 2,917,800 2,924,100 2,918,200 2,903,900 14,300 2,855,600 62,600

Labour Force 2,137,800 2,135,700 2,143,000 2,138,800 2,124,800 14,000 2,127,700 11,100

Employed 1,979,400 1,994,100 1,999,800 1,991,100 1,976,600 14,500 1,986,800 4,300

Unemployed 158,500 141,600 143,200 147,800 148,200 -400 141,000 6,800

Participation Rate 73.4% 73.2% 73.3% 73.3% 73.2% 0.1% 74.5% -1.2%

Employment Rate 68.0% 68.3% 68.4% 68.2% 68.1% 0.2% 69.6% -1.3%

Unemployment Rate 7.4% 6.6% 6.7% 6.9% 7.0% -0.1% 6.6% 0.3%


Albertaʼs seasonally adjusted unemployment rate averaged 6.9 per cent in the second quarter of 2010, down from 7.0 per cent the previous quarter, but up from 6.6 per cent year over year. The unemployment rate dropped significantly from 7.4 per cent in April 2010 to 6.6 per cent in May, as a result of employment increasing and the total labour force remaining virtually unchanged.

“Job searchers in Alberta have had a tough go of it during the past two years, and with the provincial unemployment rate remaining stubbornly high at 7.4% (In April 2010), recovery in the labour market has been slow. But even more troubling is that the average length of unemployment continues to increase, despite the economic recovery gaining traction in the province.”163

The average length of unemployment in Alberta has gone from a low of 6.6 weeks in November 2008 to 18 weeks in April 2010. While this is a dramatic increase, this figure still remains below the national average of 19.3 weeks.

“The length of unemployment is a very important statistic in evaluating the health of the labour market. When people become unemployed for longer periods, they can suffer ʻskills atrophy,ʼ which makes finding a job even harder – unemployment often begets unemployment. The ultimate solution frequently lies in obtaining new training or switching careers, which means bringing the duration of unemployment down following a recession can take a lot longer than it did for it to increase.”164

In June 2010, unemployment rates declined in only three of the 10 provinces (Quebec, Ontario and Manitoba). Alberta had the third lowest unemployment rate in June 2010 at 6.7 per cent, following Manitoba (5.3 per cent) and Saskatchewan (5.5 per cent).

163 ATB Financial, Weekly Economic Bulletin, June 4, 2010, p.1. 164 Ibid.



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Figure 28: Unemployment Rates Q2 2010 (Canada and Provinces)


Employment by Type of Work, Gender and Age

Full-time employment in Alberta accounted for all of the employment gains in the second quarter of 2010. Full-time employment was up 0.7 per cent year over year, while part-time employment was down 2.6 per cent. All of the employment gains in the second quarter of 2010 were also among men, with employment for men increasing 0.6 per cent year over year, and employment for women declining 0.3 per cent.

Employment for adults aged 25 – 64 increased by 10,100 year over year in the second quarter of 2010, but was offset by employment losses for youth aged 15 – 24 (-6,200) and adults aged 65 years+ (-900). In June 2010, the unemployment rate in Alberta for those aged 15 – 24 was 11.7 per cent, compared to 5.7 per cent for those aged 25 and over.

Table 14: Employment in Alberta by Type of Work, Gender, and Age (unadjusted)


Annual

Change

Employment 1,958,100 2,005,900 2,036,800 2,000,300 1,997,200 3,100

Full-time 1,596,700 1,672,700 1,683,400 1,650,900 1,638,700 12,200

Part-time 361,400 333,200 353,400 349,300 358,500 -9,200

Men 1,063,800 1,090,000 1,118,900 1,090,900 1,084,800 6,100

Women 894,200 915,900 917,900 909,300 912,400 -3,100

15 - 24 years 299,000 312,600 334,500 315,400 321,600 -6,200

25 - 64 years 1,607,900 1,638,800 1,646,900 1,631,200 1,621,100 10,100

65 years + 51,100 54,500 55,300 53,600 54,500 -900

Source: Statistics Canada, Labour Force Survey, unadjusted



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In the second quarter of 2010, employment declined in 10 of 18 industries in Alberta on a year over year basis, with the most significant decreases (in numbers) seen in agriculture (-7,600), educational services (-7,500), and public administration (-7,100). The remaining industries (with the exception of information, culture and recreation where employment was flat) experienced employment growth, with the most significant increases (in numbers) seen in health care and social assistance (+20,800) and construction (+13,200).

Table 15: Employment in Alberta by Industry (unadjusted)


Annual

Change

All Industries 1,958,100 2,005,900 2,036,800 2,000,300 1,997,200 3,100

Agriculture 43,600 55,300 49,800 49,600 57,200 -7,600

Forestry and logging with support activities 2,400 4,300 4,300 3,700 3,500 200

Mining and oil and gas extraction 132,200 130,000 138,400 133,500 136,700 -3,200

Utilities 16,200 18,000 17,500 17,200 20,700 -3,500

Construction 188,300 200,200 205,800 198,100 184,900 13,200

Manufacturing 125,800 128,100 130,300 128,100 122,000 6,100

Wholesale trade 67,400 68,100 67,000 67,500 71,500 -4,000

Retail trade 226,500 228,000 242,000 232,200 229,000 3,200

Transportation & warehousing 98,000 104,900 108,400 103,800 107,400 -3,600

Finance, insurance, real estate and leasing 106,100 111,400 106,900 108,100 113,100 -5,000

Professional, scientific & technical services 149,700 150,700 155,100 151,800 149,100 2,700

Business, building & other support services 69,000 68,500 79,600 72,400 68,400 4,000

Educational services 129,100 134,900 124,200 129,400 136,900 -7,500

Health care and social assistance 213,300 217,500 218,200 216,300 195,500 20,800

Information, culture & recreation 83,200 78,300 78,700 80,100 80,100 0

Accommodation & food services 125,900 126,000 123,300 125,100 127,800 -2,700

Other services 97,800 93,800 97,000 96,200 99,400 -3,200

Public administration 83,400 87,600 90,300 87,100 94,200 -7,100

Source: Alberta Employment and Immigration, Labour Force Statistics, Alberta

Employment by Occupation

With the exception of health occupations (+12,400), trades, transport and equipment operator occupations (+11,800), sales and service occupations (+7,500), and business, finance and administrative occupations (+5,400), the remaining occupation categories in Alberta experienced employment losses on an annual basis in the second quarter of 2010.

The most significant declines (in numbers) occurred in natural and applied sciences occupations (-17,000) and social science, education, government and religion occupations (-10,900).



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Table 16: Employment in Alberta by Occupation (unadjusted)


Annual

Change

All Occupations 1,958,100 2,005,900 2,036,800 2,000,300 1,997,200 3,100

Management 157,200 153,200 157,500 156,000 157,500 -1,500

Business, finance and administrative 350,700 366,400 358,600 358,600 353,200 5,400

Natural & applied sciences & related 145,900 140,900 154,600 147,100 164,100 -17,000

Health 122,800 125,500 124,700 124,300 111,900 12,400

Social science, education, government & religion 147,800 162,700 157,600 156,000 166,900 -10,900

Art, culture, recreation & sport 46,500 41,900 42,600 43,700 46,900 -3,200

Sales & service 475,000 472,900 484,700 477,500 470,000 7,500

Trades, transport & equipment operators & related 353,600 367,100 372,700 364,500 352,700 11,800

Unique to primary industry 96,800 116,800 119,600 111,100 112,500 -1,400

Unique to processing, manufacturing & utilities 61,900 58,500 64,200 61,500 61,600 -100

Source: Alberta Employment and Immigration, Labour Force Statistics, Alberta

CALGARY CENSUS METROPOLITAN AREA (CMA)

Q2 2010 In the second quarter of 2010, employment in the Calgary CMA declined by 6,900 on a quarterly basis, and by 3,400 on an annual basis, to an estimated total of 689,100.

Table 17: Labour Force Statistics - Calgary CMA

Calgary CMA Apr-10 May-10 Jun-10 Q2 2010 Q1 2010

Quarterly

Change Q2 2009

Annual

Change

Population 988,700 990,400 992,400 992,400 985,400 7,000 966,300 26,100

Labour Force 746,500 745,800 744,600 744,600 749,700 -5,100 742,100 2,500

Employed 689,800 688,800 689,100 689,100 696,000 -6,900 692,500 -3,400

Unemployed 56,600 57,100 55,500 55,500 53,700 1,800 49,600 5,900

Participation Rate 75.5% 75.3% 75.0% 75.3% 76.1% -0.8% 76.8% -1.5%

Employment Rate 69.8% 69.5% 69.4% 69.6% 70.6% -1.0% 71.7% -2.1%

Unemployment Rate 7.6% 7.7% 7.5% 7.6% 7.2% 0.4% 6.7% 0.9%

Source: Statistics Canada, Labour Force Survey, seasonally adjusted (3 month moving average)

Calgaryʼs unemployment rate averaged 7.6 per cent in the second quarter of 2010, up from 7.2 per cent the previous quarter and up from 6.7 per cent year over year. Calgaryʼs participation rate for the second quarter of 2010 declined to 75.3 per cent, from 76.1 per cent the previous quarter, and the employment rate fell below the 70 per cent mark to 69.6 per cent, from 70.6 per cent in Q1 2010.

“Calgaryʼs labour market is losing the attraction to interprovincial migrants given a shrinking advantage in unemployment rates between the region and the rest of the nation. More local people were discouraged in finding a job in the current market, which was represented by declining labour market participation rates and employment rates. However, the market



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is expected to tighten soon, supported by stabilizing crude oil prices (US$70-80 per bbl in 2010) and better perspectives in oil sands investments because of the BP spill.”165

Among the 15 metropolitan areas shown in the following chart, seven had an unemployment rate below 7.0 per cent in June 2010. The remaining eight metropolitan areas, including Calgary (7.5 per cent) and Edmonton (7.1 per cent) had an unemployment rate above 7.0 per cent in June 2010.

Windsor had the highest unemployment rate in the country in June 2010 at 12.6 per cent. Canadaʼs two largest cities were next in line, with Torontoʼs unemployment rate sitting at 9.4 per cent and Montrealʼs unemployment rate at 8.5 per cent.

“The high value of the loonie has weighed disproportionally hard on Ontario and Quebecʼs economy and is one reason unemployment has remained stubbornly high in those provinces.”166

Regina registered the lowest unemployment rate in June 2010 at 4.3 per cent.

“As for the west, employment in Saskatchewan and Manitoba was hit less hard by the recession and Alberta has been slower to recover than them. Looking ahead, the strengthening Alberta economy should start to bring the unemployment rates in Calgary and Edmonton gradually lower.”167

Figure 29: Unemployment Rates of Canadian Cities (CMAs)—June 2010

165 City of Calgary, June 2010 Labour Market Review, July 9, 2010, p.1. 166 ATB Financial, Daily Economic Comment, Calgary, Edmonton, Middle of the Pack, May 27, 2010, p.1. 167 Ibid.



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Calgaryʼs participation rate168, which is the percentage of the population 15 years+ that is either employed or actively looking for employment, fell to 75.0 per cent in June 2010, from 75.3 per cent the previous month. Edmontonʼs participation rate rose to 72.6 per cent in June 2010, from 72.3 per cent in May 2010. Calgaryʼs participation rate reached an all-time high in November 2008 at 78.2 per cent, while Edmontonʼs participation rate reached its peak in June 2009 at 73.7 per cent.

Figure 30: Labour Force Participation Rates - Calgary CMA and Edmonton CMA

Despite the decline in Calgaryʼs participation rate in June 2010, Calgary continued to have the highest rate among metropolitan areas in Canada. Among the 15 metropolitan areas shown in the following chart, Windsor had the lowest participation rate in June 2010 at 64.6 per cent, well below the national average of 67.4 per cent.

“A high labour force participation rate is generally considered a positive as it expands the tax base and decreases the dependency ratio. However, considering the labour market was so strong that some adolescents were dropping out of school, some moderation in Albertaʼs participation rate is probably not all that bad.”169

168 Total labour force expressed as a percentage of the population aged 15 years and over. 169 ATB Financial, Daily Economic Comment, More Albertans Leave the Labour Force, July 26, 2010.



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Figure 31: Participation Rates of Canadian Cities (CMAs) - June 2010


In the second quarter of 2010, the most significant job gains in the Calgary CMA were in trade (+7,800) and manufacturing (+5,700) on a year over year basis. Employment in the accommodation and food services industry declined 6,800 year over year in the second quarter of 2010, while employment in the professional scientific and technical services industry fell by 5,600.

Table 18: Employment in the Calgary CMA by Industry (unadjusted)

Calgary CMA Apr-10 May-10 Jun-10 Q2 2010 Q2 2009

Annual

Change

All Industries 680,700 683,500 692,900 685,700 691,000 -5,300

Natural Resources 49,200 47,300 46,200 47,600 43,900 3,700

Utilities 4,400 4,200 4,500 4,400 8,800 -4,400

Construction 63,300 63,500 63,100 63,300 61,400 1,900

Manufacturing 49,500 48,700 48,500 48,900 43,200 5,700

Trade 99,600 102,600 107,500 103,200 95,400 7,800

Transportation & warehousing 36,800 37,700 36,500 37,000 41,800 -4,800

Finance, insurance, real estate and leasing 45,200 46,100 46,600 46,000 46,700 -700

Professional, scientific & technical services 70,800 73,600 78,800 74,400 80,000 -5,600

Business, building & other support services 23,000 24,200 25,200 24,100 28,900 -4,800

Educational services 40,800 41,700 42,400 41,600 43,900 -2,300

Health care and social assistance 65,800 66,900 68,200 67,000 62,200 4,800

Information, culture & recreation 35,600 35,100 37,500 36,100 35,100 1,000

Accommodation & food services 37,600 36,000 33,400 35,700 42,500 -6,800

Other services 33,600 30,800 29,800 31,400 30,200 1,200

Public administration 25,000 24,000 22,900 24,000 25,800 -1,800

Source: Statistics Canada, Labour Force Survey, unadjusted (3 month moving average)



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CALGARY & AREA EMPLOYER SURVEY For each quarter of 2010, a survey will be conducted of Calgary and area companies. The purpose of the survey is to gather information from employers on their recruitment and retention practices and various other employment issues they are facing. In the first quarter of 2010, large-sized companies with 100 or more employees were surveyed and in the second quarter of 2010, medium-sized companies with 50 – 99 employees were surveyed and reported on. Companies with 10 – 49 employees will be surveyed in the third quarter, and companies with 1 – 9 employees will be surveyed in the fourth quarter.

Q2 2010 SURVEY RESULTS: MEDIUM-SIZED COMPANIES (50 – 99 EMPLOYEES) In the second quarter of 2010, a survey was conducted of 200 Calgary and area medium-sized companies. It should be noted that results are presented as received, with no statistical analysis. For additional information on survey methodology, see Appendix A.

Profile of Companies

The 200 companies surveyed employ approximately 13,841 people. Of this total, 79 per cent are full-time employees, 10 per cent are part-time employees, six per cent are contract workers, and four per cent are seasonal workers.

Table 19: Number of Employees and Companies Surveyed in Q2 2010

IndustryTotal

Employees

Number of

Companies

Mining & Oil & Gas 1,467 19Construction 1,301 19Manufacturing 1,389 21Wholesale & Retail Trade 1,572 22Transportation & Warehousing 1,235 19Professional, Scientific & Technical Services 1,659 25Health Care & Social Assistance 1,171 15Accommodation & Food Services/Arts & Entertainment 1,609 24Finance, Insurance, Real Estate & Leasing 1,143 16Other 1,295 20

Total 13,841 200

Note: “Other” represents companies from the remainder of the industry categories: Agriculture, Utilities, Information and Culture, Management of Companies, Administrative and Support Services, Other Services, and Public Administration.



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Business Activity

For companies surveyed in Q2 2010, slightly more companies downsized than expanded in the year prior to their survey, roughly similar to the Q2 2009 results.

Companies were asked questions about their past and future business activity. Specifically, they were asked if their company expanded or downsized in the 12 months prior to their survey, and if they anticipated a business expansion or downsize in the 12 months following their survey.

Twenty-two per cent of the companies surveyed in Q2 2010 expanded in the 12 months prior to their survey and 31 per cent downsized, resulting in a balance of opinion170 of -9 per cent. In Q2 2009, 19 per cent of the companies expanded in the 12 months prior to their survey and 31 per cent downsized, resulting in a balance of opinion of -12 per cent.

For Q2 2010, more companies downsized than expanded in the mining and oil and gas, manufacturing, wholesale and retail trade, transportation and warehousing, and professional, scientific and technical services industries. On balance, 25 per cent of the ʻotherʼ companies surveyed in Q2 2010 expanded in the 12 months prior to their survey. This was a significant improvement over Q2 2009, when the balance of opinion for companies in the ʻotherʼ category was -14 per cent. In addition, more companies expanded than downsized in the health care and social assistance, accommodation and food services, and finance, insurance, real estate and leasing industries. For the construction industry, the balance of opinion was neutral in Q2 2010, as 16 per cent of the companies expanded in the year prior to their survey, and 16 per cent downsized. Past Business ActivityPercentage of companies that expanded or downsized in the 12 months prior to their survey

Expanded Downsized Balance Expanded Downsized BalanceOverall Results 19% 31% -12% 22% 31% -9%

Results by IndustryMining & Oil & Gas 38% 43% -5% 26% 53% -27%Construction 21% 42% -21% 16% 16% 0%Manufacturing 19% 38% -19% 14% 52% -38%Wholesale & Retail Trade 9% 23% -14% 23% 45% -22%Transportation & Warehousing 5% 48% -43% 21% 53% -32%Professional, Scientific & Technical Services 25% 45% -20% 24% 48% -24%Health Care & Social Assistance 47% 5% 42% 40% 20% 20%Accommodation & Food Services/Arts & Entertainment 5% 10% -5% 4% 0% 4%Finance, Insurance, Real Estate & Leasing 28% 39% -11% 31% 19% 12%Other 0% 14% -14% 25% 0% 25%

Q2 2009 Q2 2010

Comments

• We are currently undergoing an expansion. – Construction

• We streamlined the number of contractors. – Mining & Oil & Gas

• We downsized by 11 per cent. – Professional, Scientific & Technical Services

• We became more efficient, then downsized. – Professional, Scientific & Technical Services

170 Percentage of companies reporting an expansion minus percentage of companies reporting a downsize.



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The balance of opinion on future business activity was slightly more positive for companies surveyed in Q2 2010.

Twenty-six per cent of the companies surveyed in Q2 2010 anticipated a business expansion in the 12 months following their survey and three per cent anticipated a downsize, for a positive balance of opinion of 23 per cent. These results are slightly more positive compared to Q2 2009, when 22 cent anticipated a business expansion, and six per cent anticipated a downsize, for a positive balance of opinion of 16 per cent.

In Q2 2010, more companies anticipated a business expansion than a downsize in the year following their survey in all of the industry categories. The transportation and warehousing industry was particularly positive about future business activity, with a balance of opinion of 33 per cent. This was a significant improvement over Q2 2009 results, when the balance of opinion for transportation and warehousing was -10 per cent. Thirty-three per cent of the health care and social assistance industry organizations also anticipated a business expansion in the upcoming year, similar to the results recorded in Q2 2009. Future Business ActivityPercentage of companies that anticipated an expansion or downsize in the 12 months following their survey

Expansion Downsize Balance Expansion Downsize BalanceOverall Results 22% 6% 16% 26% 3% 23%

Results by IndustryMining & Oil & Gas 37% 0% 37% 26% 0% 26%Construction 16% 0% 16% 16% 5% 11%Manufacturing 29% 10% 19% 33% 5% 28%Wholesale & Retail Trade 14% 14% 0% 18% 0% 18%Transportation & Warehousing 5% 15% -10% 42% 5% 37%Professional, Scientific & Technical Services 30% 5% 25% 28% 8% 20%Health Care & Social Assistance 32% 0% 32% 33% 0% 33%Accommodation & Food Services/Arts & Entertainment 14% 0% 14% 13% 0% 13%Finance, Insurance, Real Estate & Leasing 33% 6% 28% 25% 0% 25%Other 14% 10% 5% 25% 0% 25%

Q2 2009 Q2 2010

Comments

• We will be opening a new location. – Accommodation & Food Services/Arts & Entertainment

• We are estimating like crazy but not getting work. – Construction

• Being a law firm, growth for us means a couple of new people every few years. – Professional, Scientific & Technical Services

• There is a good possibility we will be expanding – Wholesale & Retail Trade



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Employment: Past Layoffs, Vacant Positions, and Future Employment

In Q2 2010, fewer companies reported they laid off employees in the three months prior to their survey, compared to the previous year.

Twenty-two per cent of the companies surveyed in Q2 2010 reported they laid off employees in the three months prior to their survey.171 Approximately 220 people were reported as being laid off. In Q2 2009, 38 per cent said their company had laid off a total of 640 employees in the three months prior their survey. Only 11 per cent of the mining and oil and gas companies and 10 per cent of the manufacturing companies surveyed in Q2 2010 laid off employees in the three months prior to their survey, down significantly from the 47 per cent and 60 per cent reported for these industries in Q2 2009. More than a third of the transportation and warehousing companies surveyed in Q2 2010 reported they had laid off employees, however, this was an improvement from the previous year when 55 per cent reported layoffs.

Comments

• No we have not laid off. We made cut backs, reduced work hours for hourly staff, but this way we could still accommodate everyone. – Health Care & Social Assistance

• We laid off staff in 2009, but not in the past three months. – Manufacturing

• We lost a contract and had to lay off employees. – Manufacturing

• Not in the last three months, but I can foresee it as happening and I see it getting worse. – Manufacturing

• No – the economy has not affected us. – Transportation & Warehousing

171 As a result of the slowdown in the economy.

Past LayoffsPercentage of companies that laid off employees in the three months prior to their survey

Q2 2009 Q2 2010

Overall Results 38% 22%

Results by IndustryMining & Oil & Gas 47% 11%Construction 58% 32%

Manufacturing 60% 10%Wholesale & Retail Trade 43% 36%Transportation & Warehousing 55% 37%Professional, Scientific & Technical Services 55% 20%Health Care & Social Assistance 11% 13%Accommodation & Food Services/Arts & Entertainment 0% 13%Finance, Insurance, Real Estate & Leasing 39% 19%Other 14% 25%



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In Q2 2010, the percentage of companies that had vacant positions that needed to be filled was up significantly from the previous year.

Fifty-two per cent of the companies surveyed in Q2 2010 said they had vacant positions that needed to be filled at the time of their survey, compared to 36 per cent of the companies surveyed in Q2 2009. Sixty-eight per cent of the mining and oil and gas companies had vacant positions, more than triple the results reported the previous year. The percentage of companies reporting vacancies was also up significantly year over year in the manufacturing, wholesale and retail trade, professional, scientific and technical services, and finance, insurance, real estate and leasing industries. In Q2 2010, only 16 per cent of the transportation and warehousing companies reported they had vacant positions that needed to be filled at the time of their survey, unchanged from the previous year.

In Q2 2010, the companies reporting vacancies reported a total of close to 450 positions that needed to be filled, which was 50 per cent more than the 300 vacancies reported by companies the previous year. Overall, this equates to a vacancy rate of 3.2 per cent for Q2 2010. Vacancy rates for Q2 2010 ranged from a low of 1.0 per cent in the transportation and warehousing industry, to a high of 7.1 per cent in the accommodation and food services/arts and entertainment industry.

Q2 2010 Vacancy Rates

IndustryTotal Vacant

Positions

Total

Employees

Vacancy

Rate

Mining & Oil & Gas 59 1,467 4.0%

Construction 26 1,301 2.0%

Manufacturing 17 1,389 1.2%

Wholesale & Retail Trade 32 1,572 2.0%

Transportation & Warehousing 12 1,235 1.0%

Professional, Scientific & Technical Services 54 1,659 3.3%

Health Care & Social Assistance 64 1,171 5.5%

Accommodation & Food Services/Arts & Entertainment 115 1,609 7.1%

Finance, Insurance, Real Estate & Leasing 43 1,143 3.8%

Other 25 1,295 1.9%

Total 447 13,841 3.2%

The top positions needed across all industries were: Food and Beverage Servers, Program Leaders and Instructors in Recreation, Sport and Fitness, Real Estate Agents and Salespersons, Early Childhood Educators and Assistants, Food Counter Attendants and Kitchen Helpers, Cooks, and Supervisors, Oil and Gas Drilling and Service.

Percentage of companies that had vacant positions that needed to be filled

Q2 2009 Q2 2010


Results by IndustryMining & Oil & Gas 21% 68%Construction 28% 37%Manufacturing 24% 52%Wholesale & Retail Trade 29% 68%Transportation & Warehousing 16% 16%Professional, Scientific & Technical Services 25% 60%Health Care & Social Assistance 74% 67%Accommodation & Food Services/Arts & Entertainment 57% 58%Finance, Insurance, Real Estate & Leasing 33% 63%Other 52% 25%



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Mining & Oil & Gas –Vacant Positions

NOC Code OccupationVacant

Positions

8222 Supervisors, Oil and Gas Drilling and Service 15

7312 Heavy-Duty Equipment Mechanics 8

2145 Petroleum Engineers 6

8615 Oil and Gas Drilling, Servicing and Related Labourers 5

1453 Customer Service, Information and Related Clerks 2

2133 Electrical and Electronics Engineers 2

2211 Chemical Technologists and Technicians 2

6221 Technical Sales Specialists - Wholesale Trade 2

7452 Material Handlers 2

7311 Construction Millwrights and Industrial Mechanics (Except Textile) 2

2243 Industrial Instrument Technicians and Mechanics 2

0212 Architecture and Science Managers 1

1225 Purchasing Agents and Officers 1

1411 General Office Clerks 1

1431 Accounting and Related Clerks 1

2113 Geologists, Geochemists and Geophysicists 1

2174 Computer Programmers and Interactive Media Developers 1

2231 Civil Engineering Technologists and Technicians 1

1211 Supervisors, General Office and Administrative Support Clerks 1

2263 Inspectors in Public & Environmental Health & Occupational Health & Safety 1

1432 Payroll Clerks 1

9211 Supervisors, Mineral and Metal Processing 1

Total 59

Construction – Vacant Positions


Positions

7271 Carpenters 7

7611 Construction Trades Helpers and Labourers 6

7282 Concrete Finishers 2

7411 Truck Drivers 2

7441 Residential and Commercial Installers and Services 2

7264 Ironworkers 2

7421 Heavy Equipment Operators (Except Crane) 1

7215 Contractors and Supervisors, Carpentry Trades 1

5241 Graphic Designers and Illustrators 1

2253 Drafting Technologists and Technicians 1

8421 Chain Saw and Skidder Operators 1

Total 26



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Manufacturing – Vacant Positions


Positions

9617 Labourers in Food, Beverage and Tobacco Processing 2

0211 Engineering Managers 1

1222 Executive Assistant 1

1414 Receptionists and Switchboard Operators 1

1431 Accounting and Related Clerks 1

1471 Shippers and Receivers 1

2132 Mechanical Engineers 1

7271 Carpenters 1


6411 Sales Representatives - Wholesale Trade (Non-Technical) 1

6252 Bakers 1


7242 Industrial Electricians 1

1473 Production Clerks 1

2253 Drafting Technologists and Technicians 1

9213 Supervisors, Food, Beverage and Tobacco Processing 1

Total 17

Wholesale & Retail Trade – Vacant Positions


Positions

6421 Retail Salespersons and Sales Clerks 14

1471 Shippers and Receivers 2



6662 Specialized Cleaners 2

1111 Financial Auditors and Accountants 1



2131 Civil Engineers 1

2242 Electronic Service Technicians (Household and Business Equipment) 1


0621 Retail Trade Managers 1

8612 Landscaping and Grounds Maintenance Labourers 1

7335 Other Small Engine and Equipment Mechanics 1

7334 Motorcycle and other Related Mechanics 1

Total 32



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Professional, Scientific & Technical Services – Top 10 Vacant Positions


Positions

2133 Electrical and Electronics Engineers 6

2171 Information Systems Analysts and Consultants 6

2231 Civil Engineering Technologists and Technicians 6

2113 Geologists, Geochemists and Geophysicists 5

2131 Civil Engineers 5

0211 Engineering Managers 4

2174 Computer Programmers and Interactive Media Developers 4


0611 Sales, Marketing and Advertising Managers 2

2121 Biologists and Related Scientists 2

1111 Financial Auditors and Accountants 1


2132 Mechanical Engineers 1

2154 Land Surveyors 1

2173 Software Engineers and Designers 1

4211 Paralegal and Related Occupations 1


2141 Industrial and Manufacturing Engineers 1

2144 Geological Engineers 1

2255 Mapping and Related Technologists and Technicians 1

7612 Other Trades Helpers and Labourers 1

Total 54 Transportation & Warehousing – Vacant Positions


Positions



1121 Specialists in Human Resources 1

Total 12 Health Care & Social Assistance – Vacant Positions


Positions

5254 Program Leaders and Instructors in Recreation, Sport and Fitness 25

4214 Early Childhood Educators and Assistants 18

4152 Social Workers 6

1122 Professional Occupations in Business Services to Management 2


3142 Physiotherapists 2

3152 Registered Nurses 1

3233 Licensed Practical Nurses 1

3413 Nurse Aides, Orderlies and Patient Service Associates 1

4164 Social Policy Researchers, Consultants and Program Officers 1

4213 Employment Counsellors 1

6663 Janitors, Caretakers and Building Superintendents 1

4167 Recreation, Sports and Fitness Program Supervisors and Consultants 1

4212 Community and Social Service Workers 1

4151 Psychologists 1

Total 64



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Accommodation & Food Services/Arts & Entertainment – Vacant Positions


Positions

6453 Food and Beverage Servers 34

6641 Food Counter Attendants, Kitchen Helpers and Related Occupations 15

6242 Cooks 15

6451 Maîtres d'hôtel and Hosts/Hostesses 10

6452 Bartenders 9

6671 Operators and Attendants in Amusement, Recreation and Sport 7

6661 Light Duty Cleaners 6

6442 Outdoor Sport and Recreational Guides 4

6435 Hotel Front Desk Clerks 3


6672 Other Attendants in Accommodation and Travel 2

6212 Food Service Supervisors 2


6441 Tour and Travel Guides 2

0631 Restaurant and Food Service Managers 1


Total 115

Finance, Insurance, Real Estate & Leasing – Vacant Positions


Positions

6232 Real Estate Agents and Salespersons 20


6231 Insurance Agents and Brokers 6


1224 Property Administrators 1




1233 Insurance Adjusters and Claims Examiners 1

1433 Customer Service Representatives - Financial Services 1

1112 Financial and Investment Analysts 1

1234 Insurance Underwriters 1

Total 43

Other – Vacant Positions


Positions



4214 Early Childhood Educators and Assistants 3



0013 Senior Managers - Financial, Communications & Other Business Services 1

0014 Senior Managers – Membership Organizations 1

6211 Retail Trade Supervisors 1

Total 25



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The balance of opinion on future employment was more positive for companies surveyed in Q2 2010, indicating companies are anticipating expanding their workforces over the next three months.

Thirty-four per cent of the companies surveyed in Q2 2010 anticipated total employment would increase in the three months following their survey and five per cent anticipated employment would decrease, for a positive balance of opinion of 29 per cent. These results are more positive compared to Q2 2009, when 11 per cent anticipated an employment increase, and four per cent anticipated an employment decrease, for a positive balance of opinion of seven per cent.

In Q2 2010, several industries were particularly positive about future employment levels, including accommodation and food services/arts and entertainment and construction. This was a significant improvement over Q2 2009, when the balance of opinion on future employment levels was only 14 per cent for accommodation and food services/arts and entertainment and 16 per cent for construction. Future EmploymentPercentage of companies that anticipated an increase or decrease in total employment in the 3 months following their survey

Increase Decrease Balance Increase Decrease BalanceOverall Results 11% 4% 7% 34% 5% 29%

Results by IndustryMining & Oil & Gas 16% 0% 16% 21% 5% 16%Construction 16% 0% 16% 58% 11% 47%Manufacturing 5% 10% -5% 29% 10% 19%Wholesale & Retail Trade 9% 9% 0% 18% 0% 18%Transportation & Warehousing 15% 5% 10% 32% 0% 32%Professional, Scientific & Technical Services 10% 0% 10% 44% 12% 32%Health Care & Social Assistance 11% 0% 11% 40% 0% 40%Accommodation & Food Services/Arts & Entertainment 19% 5% 14% 58% 0% 58%Finance, Insurance, Real Estate & Leasing 6% 0% 6% 19% 0% 19%Other 0% 10% -10% 15% 5% 10%

Q2 2009 Q2 2010

Comments

• There may be some positions that are transient, where workers will leave and we will have to fill positions again, but the number of employees will stay the same. – Accommodation & Food Services/Arts & Entertainment

• We will be hiring a few more workers for the summer season. – Accommodation & Food Services/Arts & Entertainment

• Employment will increase due to new pilot programs that are happening on an ongoing basis. – Health Care & Social Assistance

• Most likely employment will increase by ten percent. – Manufacturing

• I project that employment will decrease by twenty five percent. – Manufacturing

• It depends on what is going on in the oil field. I think it is a real hit and miss. We are hoping for an improvement by the end of this year, fourth quarter. – Manufacturing



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Temporary Foreign Workers

The percentage of companies employing temporary foreign workers in Q2 2010 was unchanged from the previous year.

Twenty-one per cent of the companies surveyed in Q2 2010 reported they employed approximately 215 temporary foreign workers, unchanged from 21 per cent in Q2 2009. Sixty-three per cent of the accommodation and food services/arts and entertainment companies surveyed in Q2 2010 employed temporary foreign workers, while none of the transportation and warehousing companies reported they employed temporary foreign workers.

In Q2 2010, the percentage of companies anticipating hiring temporary foreign workers in the year following their survey was also unchanged from the previous year.

Seven per cent of the companies surveyed in Q2 2010 anticipated applying for or hiring approximately 65 temporary foreign workers in the 12 months following their survey, virtually unchanged from Q2 2009. In 2010, 21 per cent of the accommodation and food services/arts and entertainment companies anticipated hiring temporary foreign workers in the year following their survey, compared to none of the wholesale and retail trade, professional, scientific and technical services, or finance, insurance, real estate and leasing companies.

Comments

• Yes, we have nine temporary foreign workers, although it is coming to the end of the 2-year contracts. – Accommodation & Food Services/Arts & Entertainment

• I heard E-LMO (Expedited Labour Market Opinion) is at a stand still so Iʼm going to avoid going down that road. – Accommodation & Food Services/Arts & Entertainment

• We want to renew the contracts of the temporary foreign workers (TFWs) we have right now because it gives the company some stability especially in the housekeeping department, which has the highest turnover rate. We have put in another E-LMO to keep the TFWs. Since hiring the TFWs, we have won an award in housekeeping, which is great. Most local workers are younger and tend to party (being in Banff and all) and the TFWs work harder because they need to send money home. They also tend to be older and more responsible, whereas the younger workers will get drunk and then not show up for work. – Accommodation & Food Services/Arts & Entertainment

Temporary Foreign WorkersPercentage of companies that employed temporary foreign workers at the time of their survey

Q2 2009 Q2 2010




Future Temporary Foreign WorkersPercentage of companies that anticipate applying for or hiring temporary foreign workersin the 12 months following their survey

Q2 2009 Q2 2010


Results by IndustryMining & Oil & Gas 0% 5%Construction 11% 11%Manufacturing 10% 10%Wholesale & Retail Trade 0% 0%Transportation & Warehousing 0% 5%Professional, Scientific & Technical Services 0% 0%Health Care & Social Assistance 5% 7%Accommodation & Food Services/Arts & Entertainment 33% 21%Finance, Insurance, Real Estate & Leasing 0% 0%Other 0% 5%



82

• We will try to hire locally first. The problem with getting TFWs is that the application and paperwork can take so long that by the time it goes through the restaurant could have filled the position already. – Accommodation & Food Services/Arts & Entertainment

• I can't be sure if we will hire more. We may renew three of the contracts. The reason we had to bring in the temporary foreign workers in the first place was back in 2007 there was nobody to hire, especially not qualified workers. They were rare therefore the company had to recruit internationally for the skill sets we needed. – Accommodation & Food Services/Arts & Entertainment

• Not currently but we are in the midst of applying for some. – Construction

• We have three LMOs out for temporary foreign workers. – Construction

• We are trying to renew contracts but Service Canada has turned down our LMOs, so we are working on it. – Health Care & Social Assistance

• The rules are so crazy and it takes so long that although we would like to apply for temporary foreign workers, we will not. – Manufacturing

• We have to recall all the union guys before we look for anyone else. We have 75 per cent of what we have to rehire and so the chances are very low for temporary foreign workers. – Manufacturing

• Itʼs not worth the time for processing temporary foreign workers, due to the restrictions that have been placed by the government. We would like to hire more, but it is not worth it. – Other

• We have no need to hire any temporary foreign workers. – Professional, Scientific & Technical Services

• We have temporary foreign workers in the Edmonton offices, but not in Calgary. – Professional, Scientific & Technical Services

• Not in the Calgary region. We have seven temporary foreign workers standing by to come to work at our Fort St. John location though. – Professional, Scientific & Technical Services

Recruitment Methods

Word of mouth was the most commonly used recruitment method in Q2 2010.

Overall, the most commonly used recruitment method for companies surveyed in Q2 2010 was word of mouth/employee referrals, followed by walk-ins/unsolicited resumes, the Internet, and company website/internal postings. Just over half of the companies surveyed said they use newspapers as a recruitment method.

For companies surveyed in Q2 2009, word of mouth/employee referrals was also the most commonly used recruitment method, followed by company website/internal postings, the Internet, and walk-ins/unsolicited resumes.

Comments

• Surprisingly, we don't have much success going through colleges and post secondary institutions. – Accommodation & Food Services/Arts & Entertainment



83

• We don't need to do much for recruiting; most applicants are walk-ins. – Accommodation & Food Services/Arts & Entertainment

• Kijiji has been the best source for our company for applicants. – Accommodation & Food Services/Arts & Entertainment

• We would take walk-ins but we never get them. We participate in the U of C internship program and if the intern was good we usually hire them after graduation. – Professional, Scientific & Technical Services

• We haven't done job fairs or used Monster in a while. In fact, we haven't needed to do much recruiting in the last year. – Professional, Scientific & Technical Services

• We use employment agencies for IT services, accountants and office administration positions. – Professional, Scientific & Technical Services

• I really donʼt like using the company website for applicants because for every one relevant application, I get lots of irrelevant ones. – Professional, Scientific & Technical Services

• Our company doesnʼt encourage walk-ins/unsolicited resumes. – Professional, Scientific & Technical Services

Recruiting Difficulties

In Q2 2010, the percentage of companies having difficulty recruiting qualified employees declined from the previous year.

Companies were asked questions regarding past and future recruiting difficulties. Specifically, they were asked if they had difficulty recruiting qualified employees in the 12 months prior to their survey, and if they anticipated having more, less or the same amount of difficulty recruiting qualified employees in the following 12 months.

Thirty-one per cent of the companies surveyed in Q2 2010 reported having difficulty recruiting qualified employees in the 12 months prior to their survey, down from Q2 2009 when 41 per cent reported having difficulty. Fifty per cent of the wholesale and retail trade companies surveyed in Q2 2010 had difficulty recruiting compared to only 20 per cent of the health care and social assistance organizations.

Comments

• Not in the last year, but from 2007-2008 it was a nightmare trying to find not only qualified workers, but enough workers to operate the company. For those years we were chronically short 30-40 employees. This last year has been heaven compared to 2007-08. – Accommodation & Food Services/Arts & Entertainment

• Before this past year we would have to hire anyone who could be another warm body to fill positions. Now the workplace has changed with the economy and now we actually have enough applicants that we can pick and choose who to hire. We can now hire people who may actually stay in a position and have the chance to work their way up. – Accommodation & Food Services/Arts & Entertainment

Difficulty RecruitingPercentage of companies that had difficulty recruiting in the 12 months prior to their survey

Q2 2009 Q2 2010






84

• Getting a carpenter with the appropriate skill level is hard to find. – Construction

• It is difficult finding drivers with a clean driving record. – Construction

• I think that due to the market down turn people are moving out of our industry. – Finance, Insurance, Real Estate & Leasing

• It is difficult finding electricians with experience working in the manufacturing industry. We have many young electricians who apply that can pull wire, but we need ones that have experience being in the manufacturing industry. – Manufacturing

• Finding the appropriate industry experience especially in the sales and marketing side is difficult. This is nothing anyone can fix. Everyone in this field is 50+ in age, so this is our problem. – Manufacturing

• It is difficult getting the right person with the right qualifications to fit in with the culture of the company. – Mining & Oil & Gas

• The problem with Calgary is itʼs a white-collar city, and itʼs hard to attract people for labour jobs. – Other

• We do get a lot of qualified people but we do an extensive criminal background check and applicants usually have a bad criminal background. – Transportation & Warehousing

• It has been fantastic for recruiting compared to three years ago when the market was insane. – Wholesale & Retail Trade

On balance, the companies surveyed in Q2 2010 anticipate having less difficulty recruiting qualified employees over the next 12 months.

Seven per cent of the companies surveyed in Q2 2010 anticipated having more difficulty recruiting qualified employees in the 12 months following their survey and 16 per cent anticipated having less difficulty, for a balance of opinion on -9 per cent.172 In Q2 2009, four per cent of the companies surveyed anticipated having more difficulty recruiting qualified employees and 39 per cent anticipated having less difficulty, for a balance of opinion of -35 per cent.

In Q2 2010, more companies in the professional, scientific and technical services and construction industries on balance anticipated having less difficulty recruiting qualified employees in the year following their survey. The balance of opinion on future recruiting difficulties was neutral for the transportation and warehousing industry.

172 Percentage of companies that anticipated having more difficulty recruiting qualified employees in the 12 months

following their survey minus the percentage of companies that anticipated having less difficulty.



85

Future Recruiting DifficultiesPercentage of companies that anticipated having more or less difficulty recruiting qualified employees in the 12 months following their survey

More Less Balance More Less BalanceOverall Results 4% 39% -35% 7% 16% -9%

Results by IndustryMining & Oil & Gas 5% 37% -32% 5% 0% 5%Construction 21% 26% -5% 0% 21% -21%Manufacturing 0% 57% -57% 10% 14% -4%Wholesale & Retail Trade 0% 55% -55% 0% 14% -14%Transportation & Warehousing 0% 40% -40% 16% 16% 0%Professional, Scientific & Technical Services 0% 55% -55% 12% 44% -32%Health Care & Social Assistance 5% 21% -16% 7% 0% 7%Accommodation & Food Services/Arts & Entertainment 5% 33% -28% 0% 4% -4%Finance, Insurance, Real Estate & Leasing 0% 33% -33% 19% 25% -6%Other 5% 24% -19% 5% 10% -5%

Q2 2009 Q2 2010

Comments

• If things keep progressing as they have we should have much less trouble. – Accommodation & Food Services/Arts & Entertainment

• Less - the last three months, we have had better quality applicants and more of them. – Finance, Insurance, Real Estate & Leasing

• Less - I just think that a lot of people right now are starting to look again because the markets are getting better. – Finance, Insurance, Real Estate & Leasing

• Our industry is very hard to hire for; you have to be specialized and have experience. You don't go to school for this type of work; you have to have the experience and the skill to work in real estate. – Finance, Insurance, Real Estate & Leasing

• With the market recovering we are going to see an exodus of individuals leaving our industry for higher paid positions in other industries. – Health Care & Social Assistance

• I want the economy to improve but when it does its harder to recruit. – Health Care & Social Assistance

• When I started to recruit in the fall of 2009 I was surprised that it has been easy. – Transportation and Warehousing

Employee Turnover and Turnover Rates

Employee turnover continued to be an issue for companies surveyed in Q2 2010.

Eighty-four per cent of the companies surveyed in Q2 2010 reported employees had left their company in the 12 months prior to their survey as a result of voluntary turnover173, compared to 71 per cent of the companies in Q2 2009.

In Q2 2010, 93 per cent of the health care and social assistance organizations

173 Initiated by the employee.

Employee TurnoverPercentage of companies with voluntary employee turnover in the 12 months prior to their survey

Q2 2009 Q2 2010


Results by IndustryMining & Oil & Gas 74% 84%Construction 47% 84%Manufacturing 67% 71%Wholesale & Retail Trade 77% 86%Transportation & Warehousing 63% 84%Professional, Scientific & Technical Services 85% 84%

Health Care & Social Assistance 84% 93%Accommodation & Food Services/Arts & Entertainment 86% 88%Finance, Insurance, Real Estate & Leasing 78% 88%Other 52% 75%



86

reported employees had voluntarily left in the year prior to their survey, compared to 71 per cent for manufacturing companies.

Overall, the turnover rate was over six per cent for companies surveyed Q2 2010.

The companies surveyed in Q2 2010 reported approximately 930174 employees left their companies in the 12 months prior to their survey as a result of voluntary turnover. This equated to a turnover rate of 6.7 per cent. In Q2 2009, companies reported a total of 1,080 employees left their companies in the 12 months prior to their survey, resulting in a turnover rate of 7.9 per cent. In 2010, the wholesale and retail trade and accommodation and food services/arts and entertainment industry had the highest turnover rates on average at over 11 per cent, while the professional, scientific and technical services industry had the lowest turnover rate at 3.6 per cent.

Comments

• The turnover is significantly less now than it was in the last three years. In 2007 it was a nightmare and now it's reduced to almost nothing. – Accommodation & Food Services/Arts & Entertainment

• People usually only come here for a season to work so they can ski or party. It's the nature of Banff. – Accommodation & Food Services/Arts & Entertainment

• Our turnover is mostly the students who want a summer job but then decide they don't. – Accommodation & Food Services/Arts & Entertainment

• Our turnover is very low. – Construction

• Our voluntary turnover rate is 2.4 per cent for BC and Alberta. – Professional, Scientific & Technical Services

174 Not all companies that reported they had turnover were able to provide the number of employees that left their

companies in the year prior to their survey.

Employee TurnoverTurnover rates (total turnover divided by total employees)

Q2 2009 Q2 2010

Overall Results 7.9% 6.7%

Results by IndustryMining & Oil & Gas 5.4% 8.0%Construction 5.4% 4.2%Manufacturing 4.7% 3.8%Wholesale & Retail Trade 5.8% 11.4%Transportation & Warehousing 6.1% 5.2%Professional, Scientific & Technical Services 4.8% 3.6%

Health Care & Social Assistance 6.7% 8.0%Accommodation & Food Services/Arts & Entertainment 22.5% 11.1%Finance, Insurance, Real Estate & Leasing 13.5% 5.2%Other 5.2% 5.6%



87

On balance, the companies surveyed in Q2 2010 anticipate employee turnover will be lower over the next 12 months.

Five per cent of the companies surveyed in Q2 2010 anticipated voluntary turnover would be higher in the 12 months following their survey and 19 per cent anticipated it would be lower, for a balance of opinion175 of -14 per cent. In Q2 2009, eight per cent of the companies surveyed anticipated voluntary turnover would be higher in the 12 months following their survey and 28 per cent anticipated it would be lower, for a balance of opinion of -20 per cent.

In Q2 2010, all of the industries surveyed on balance, (with the exception of health care and social assistance) anticipated voluntary turnover would be lower in the year following their survey. The balance of opinion on future employee turnover for the wholesale and retail trade industry was neutral, suggesting companies in this industry anticipate turnover will be about the same over the next year. Future TurnoverPercentage of companies that anticipated employee turnover would be higher or lower in the 12 months following their survey

Higher Lower Balance Higher Lower BalanceOverall Results 8% 28% -20% 5% 19% -14%

Results by IndustryMining & Oil & Gas 16% 21% -5% 5% 21% -16%Construction 5% 21% -16% 0% 11% -11%Manufacturing 0% 38% -38% 5% 19% -14%Wholesale & Retail Trade 0% 45% -45% 0% 36% -36%Transportation & Warehousing 5% 15% -10% 5% 26% -21%Professional, Scientific & Technical Services 5% 30% -25% 8% 20% -12%Health Care & Social Assistance 32% 16% 16% 13% 13% 0%Accommodation & Food Services/Arts & Entertainment 5% 48% -43% 0% 8% -8%Finance, Insurance, Real Estate & Leasing 6% 22% -16% 6% 25% -19%Other 5% 19% -14% 5% 10% -5%

Q2 2009 Q2 2010

Comments

• Turnover is pretty high normally to begin with in restaurant industry. – Accommodation & Food Services/Arts & Entertainment

• Lower - better quality candidates are coming through. – Finance, Insurance, Real Estate & Leasing

• Lower - people aren't moving because there is not availability to go somewhere else. – Other

• Turnover used to be quite high a few years ago, but we have been working towards better employee retention to keep workers and the last two years have been much better. – Professional, Scientific & Technical Services

• Lower - in the Calgary region, our two competitors have gone out of business so that doesn't leave much for the people that are looking for work. – Transportation

• Lower – because of our big focus on engagement and retention. – Wholesale & Retail Trade

175 Percentage of companies that anticipated voluntary turnover would be higher in the 12 months following their survey

minus the percentage of companies that anticipated voluntary turnover would be lower.



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Food and beverage servers were mentioned most often by companies surveyed in Q2 2010 as having a high turnover rate.

In Q2 2010, companies were asked if there were any occupations in their company that had a particularly high turnover rate. Food and beverage servers were mentioned most often by 10 companies, followed by retail salespersons and sales clerks, community and social service workers, and food counter attendants and kitchen helpers.

Table 20: Q2 2010: Occupations reported as having high turnover rates

NOC Code Occupation# of

Companies



4212 Community and Social Service Workers 5











2263 Inspectors in Public & Environmental Health & Occupational Health & Safety 2

6242 Cooks 2



7241 Electricians (Except Industrial and Power System) 2

7321 Automotive Service Technicians, Truck & Bus Mechanics & Mechanical Repairers 2

9619 Other Labourers in Processing, Manufacturing and Utilities 2

Comments

• I am thankful for the international staff in housekeeping because that is a department that usually has lots of turnover and is hard to replace, but we have some international workers that are hard working and staying. – Accommodation & Food Services/Arts & Entertainment

• Our housekeeping has the highest turnover. – Accommodation & Food Services/Arts & Entertainment

• Restaurants generally have high turnover, but this location that I am working at right now actually has the lowest turnover of all the restaurants Iʼve worked at. – Accommodation & Food Services/Arts & Entertainment

• We tend to have higher then average turnover, it's just the nature of the beast. We have lots of younger unskilled labourers who once they get a decent paycheck don't show up and you never see them again. – Construction

• Not recently, but in the past the problem was in welding and fabrication. – Manufacturing

• Turnover is very minimal in our company. – Professional, Scientific & Technical Services



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• I donʼt know why but the position of field assistant is like a revolving door. – Professional, Scientific & Technical Services

• There has been no turnover this year because of the economy. People want to keep their jobs, they may not have an easy time finding another one. – Professional, Scientific & Technical Services

• School bus driver - because this position is part-time and there are also a lot of expectations, the turnover is higher. – Transportation & Warehousing

• Many of the entry-level type positions have high turnover rates. – Wholesale & Retail Trade

• We have a lot of long-term employees. More than half of the employees have been employed for over five years. – Wholesale & Retail Trade

Retention

A positive work environment was the most commonly used retention strategy in Q2 2010.

Companies were asked questions regarding current and future employee retention activities. Specifically, they were asked what strategies were their companies using to retain employees, and did they anticipate their company would be focusing more, less or the same on employee retention in the 12 months following their survey.

Overall, the most commonly used retention strategy for companies surveyed in Q2 2010 was a positive work environment, followed by excellent management/supervision, and a competitive salary. Results were similar for companies surveyed in Q2 2009.

Comments

• There is great opportunity to advance with us. In fact I have helped many people go from dishwasher to prep cook to cook to supervisor as well as bellman to front desk to supervisor and manager. There are lots of hospitality grads that I want to see succeed and help progress within company and Iʼm saddened because most of them don't stick it out long enough to get the chance. – Accommodation & Food Services/Arts & Entertainment

• We have wage reviews every six months to make sure our wages are competitive; we do employee surveys every few months and according to the survey employees think the workplace is a positive environment: we do performance reviews as well for management/supervisors; and we have lots of training programs in place for employees who seek to move up in the company. The work/life balance is good for the most part, but as it is a hotel work/life is based on how busy the hotel is. – Accommodation & Food Services/Arts & Entertainment

• Benefits vary depending on the position. We haven't had cash bonuses this year, but did last year and in years previously. – Accommodation & Food Services/Arts & Entertainment

• We always have interesting and challenging work. We provide cash bonuses if the company does well. – Construction



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• Our company is very open to employee suggestions; if they have a good one, the company will recognize the employee and publish their suggestion for the company to read/be aware of. - Construction

• We have a pop machine available free of charge, coffee, and an onsite fitness facility. – Finance, Insurance, Real Estate & Leasing

• We have a fully stocked kitchen with free pop, juice, and food. – Finance, Insurance, Real Estate & Leasing

• We offer flexible hours, a compressed work week, and employees can work from home. – Health Care & Social Assistance

• We offer employees flexibility and the opportunity to work at home. We convert sick days into vacation time, and offer three weeks of vacation. We are looking into offering money towards health club memberships depending on funding. – Health Care & Social Assistance

• Employees get free use of the gym, discounted car rentals, cash bonuses twice a year, staff parties, corporate challenges and stampede parties. – Health Care & Social Assistance

• We donʼt really do anything. – Manufacturing

• Free firewood, and employees can use the shop after hours. – Manufacturing

• We have a gym on site, free inside parking, a nice location, an excellent working environment, and the building is well maintained. – Manufacturing

• We provide underground parking, benefits, discounts on software purchases and travel, hockey tickets and concert tickets. – Manufacturing

• We have developmental specialists come to our office for professional development days. - Other

• We have annual pool nights, annual golf tournaments, annual Halloween & Christmas parties, as well as Stampede events. Employees get a recruiting bonus. – Professional, Scientific & Technical Services

• The company does polls within industry to make sure our wages and benefits are competitive within the industry for retention. The work/life balance has gotten much better over the years; it used to be quite bad. – Professional, Scientific & Technical Services

• Employees have the option to work full time or reduced hours to increase the “life” part of work/life balance, but it's not mandatory. – Professional, Scientific & Technical Services

• We won an award this past year for best work environment. – Professional, Scientific & Technical Services

• We always recognize a job well done by offering bonuses and time off. For example, if there is a long weekend, we offer certain staff members extra days off for jobs well done. – Transportation & Warehousing

• We did have a reward and recognition program but it didn't work out. Employees were nominating those they thought deserved to get the money, and it basically defeated the purpose as to who really was recognized for a job well done. – Wholesale & Retail Trade



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In Q2 2010, more companies on balance anticipated they would be focusing more on employee retention in the next year.

Twenty-eight per cent of the companies surveyed in Q2 2010 anticipated they would be focusing more on employee retention in the 12 months following their survey and one per cent anticipated they would be focusing less, for a positive balance of opinion176 of 27 per cent.

In Q2 2009, 26 per cent of the companies anticipated they would be focusing more on employee retention in the year following their survey and five per cent anticipated they would be focusing less, for a positive balance of opinion of 21 per cent.

In Q2 2010, more health care ad social assistance (+53 per cent) and finance, insurance, real estate and leasing companies (+50 per cent) on balance anticipated they would be focusing more on employee retention in the 12 months following their survey, compared to companies across all industries. Future RetentionPercentage of companies that anticipated they would be focusing more or less on employee retentionin the 12 months following their survey

More Less Balance More Less BalanceOverall Results 26% 5% 21% 28% 1% 27%

Results by IndustryMining & Oil & Gas 47% 0% 47% 32% 0% 32%Construction 11% 5% 6% 11% 0% 11%Manufacturing 14% 5% 9% 33% 0% 33%Wholesale & Retail Trade 27% 5% 22% 23% 0% 23%Transportation & Warehousing 20% 10% 10% 37% 0% 37%Professional, Scientific & Technical Services 10% 5% 5% 28% 0% 28%Health Care & Social Assistance 63% 0% 63% 60% 7% 53%Accommodation & Food Services/Arts & Entertainment 29% 0% 29% 8% 4% 4%Finance, Insurance, Real Estate & Leasing 33% 6% 27% 50% 0% 50%Other 5% 10% -5% 15% 0% 15%

Q2 2009 Q2 2010

Comments

• We really had to focus a lot on employee retention in 2007-08 because it was so hard to find enough workers, let alone good workers and keep them when other places could offer a bit more money. Now that things have turned around and are going really well we don't have to focus so hard on retention practices. – Accommodation & Food Services/Arts & Entertainment

• We are in year three of the performance management program and we are basically trying to focus on where people are at, where they need to be, and how we can get them to where they need to be. – Finance, Insurance, Real Estate & Leasing

• I use the three R's: Recruit, Retrain and Retain. – Finance, Insurance, Real Estate & Leasing

• I think we will be offering more on the employee benefits side. – Finance, Insurance, Real Estate & Leasing

176 Percentage of companies anticipating they would be focusing more on employee retention in the 12 months following

their survey minus the percentage of companies anticipating they would be focusing less.



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• We will be developing more challenging opportunities for professional growth. – Health Care & Social Assistance

• We are focusing on all areas of retention. We anticipate in the next ten years we are turning over 70 per cent of our key technical staff. Therefore, we have plans in place to counter this turn over and the effects that it will have. – Manufacturing

• We are just trying to create a more happy work place. – Other

• We will be focusing on improving management and communication. – Professional, Scientific & Technical Services

• We have struggled in the past to retain workers so in the past few years we have totally reworked our retention strategies because we need to keep up with big companies. The last two years have been better. We have more applicants now as well. – Professional, Scientific & Technical Services

• We will be focusing more on flexibility in hours and increasing wages for drivers and dock workers. – Transportation & Warehousing

• As the recession is winding down, we are working very hard to keep our qualified people. – Transportation & Warehousing

Supplemental Question

Formal Training

Over 90 per cent of the companies surveyed said they offer formal training to employees.

In the second quarter of 2010, 91 per cent of the companies surveyed reported that they offer formal training to employees. Formal training is more structured, typically involving either on-site training with an internal or external trainer, or off-site training. Informal training is more unstructured on the job training such as coaching or mentoring.

All of the companies surveyed in the health care and social assistance and accommodation and food services/arts and entertainment industries said they offer formal training to employees.

The source most used by companies to deliver formal structured training to employees is internal staff.

Ninety per cent of the companies that offer formal training to employees reported they use internal staff to deliver the training. Private training institutions were the next most mentioned source used to deliver training, followed by public education institutions, professional organizations, and non-profit organizations.

Formal TrainingPercentage of companies that offer formal training to employees

Q2 2010

Overall Results 91%

Results by IndustryMining & Oil & Gas 84%Construction 95%Manufacturing 86%Wholesale & Retail Trade 86%Transportation & Warehousing 89%Professional, Scientific & Technical Services 84%

Health Care & Social Assistance 100%Accommodation & Food Services/Arts & Entertainment 100%Finance, Insurance, Real Estate & Leasing 94%Other 90%



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Comments

• Each department head does the formal training. – Accommodation & Food Services/Arts & Entertainment

• We have a two-week in depth training course that is delivered by internal staff. – Accommodation & Food Services/Arts & Entertainment

• Our corporate office provides regional trainers. – Accommodation & Food Services/Arts & Entertainment

• We usually just do safety training for which we have qualified internal staff trainers. – Construction

• Any specific training that is required by an employee will be provided regardless of where the training is accessible through. – Construction

• We have distance learning/training. We also have trainers within the company that travel and train. – Health Care & Social Assistance

• We have some suppliers that come in and supply training to our employers. – Manufacturing

• We only have formal training for certain positions. – Professional, Scientific & Technical Services

• Our formal training is very infrequent - only if some new software or something comes along that we need to be trained for. – Professional, Scientific & Technical Services

• We find it's more efficient to have on-site training. – Professional, Scientific & Technical Services

• If an employee wants to take additional training, like managerial training, it's up to the employee to bring the request to us and then we will work together to accomplish the employeeʼs goal. The employee will go to whatever facility they need to get training. – Professional, Scientific & Technical Services

• Aside from safety and first aid training we don't have any other formal training. – Professional, Scientific & Technical Services



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JOB BANK ANALYSIS This section provides a summary of jobs posted to the Job Bank in the second quarter of 2010.

CALGARY (CITY) For Calgary (city), there were 10,121 unique job postings on the Job Bank in the second quarter of 2010, advertising for a total of 23,281 positions. Sixty-three per cent of the job postings were from companies located in South Calgary, while the remaining 37 per cent of the job posting were from companies located in North Calgary.

Figure 32: Job Bank: Job Ad Postings in Calgary (city) by Quadrant

Forty-six per cent (10,621 positions) were sales and service occupations, and 23 per cent (5,320 positions) were trades, transport and equipment operator occupations.

Figure 33: Job Bank: Number of Job Positions in Calgary (city) by Occupation for Q2 2010



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The top 5 occupations advertised on the Job Bank in the second quarter of 2010 were food counter attendants, kitchen helpers and related occupations (2,655 positions), retail salespersons and sales clerks (1,041 positions), cooks (979 positions), truck drivers (882 positions) and light duty cleaners (817 positions).

Table 21: Calgary (city) Positions177

NOC Code Occupation Positions

6641 Food Counter Attendants, Kitchen Helpers and Related Occupations 2,6556421 Retail Salespersons and Sales Clerks 1,0416242 Cooks 9797411 Truck Drivers 8826661 Light Duty Cleaners 8177611 Construction Trades Helpers and Labourers 6997452 Material Handlers 6076611 Cashiers 5906474 Babysitters, Nannies and Parents' Helpers 5346453 Food and Beverage Servers 4966212 Food Service Supervisors 4836623 Other Elemental Sales Occupations 4358612 Landscaping and Grounds Maintenance Labourers 4300621 Retail Trade Managers 4146411 Sales Representatives - Wholesale Trade (Non-Technical) 3106622 Grocery Clerks and Store Shelf Stockers 2592242 Electronic Service Technicians (Household and Business Equipment) 2531453 Customer Service, Information and Related Clerks 2461471 Shippers and Receivers 2437421 Heavy Equipment Operators (Except Crane) 2435254 Program Leaders and Instructors in Recreation and Sport 2426221 Technical Sales Specialists - Wholesale Trade 2352225 Landscape and Horticultural Technicians and Specialists 2309617 Labourers in Food, Beverage and Tobacco Processing 2047271 Carpenters 1937414 Delivery and Courier Service Drivers 1934167 Recreation, Sports and Fitness Program Supervisors and Consultants 1881122 Professional Occupations in Business Services to Management 1847284 Plasterers, Drywall Installers and Finishers and Lathers 1846651 Security Guards and Related Occupations 1801414 Receptionists and Switchboard Operators 1724212 Community and Social Service Workers 1656663 Janitors, Caretakers and Building Superintendents 1651411 General Office Clerks 1590611 Sales, Marketing and Advertising Managers 1583413 Nurse Aides, Orderlies and Patient Service Associates 1582133 Electrical and Electronics Engineers 1489619 Other Labourers in Processing, Manufacturing and Utilities 1417412 Bus Drivers and Subway and Other Transit Operators 1397294 Painters and Decorators 1366471 Visiting Homemakers, Housekeepers and Related Occupations 1350711 Construction Managers 1316662 Specialized Cleaners 1296211 Retail Trade Supervisors 1257252 Steamfitters, Pipefitters and Sprinkler System Installers 1147265 Welders and Related Machine Operators 1147321 Automotive Service Technicians, Truck Mechanics and Mechanical Repairers 1146435 Hotel Front Desk Clerks 1126433 Airline Sales and Service Agents 1106465 Other Protective Service Occupations 1037312 Heavy-Duty Equipment Mechanics 1037264 Ironworkers 102

177 Only occupations with 100 or more positions are shown in the table.



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COMMUNITIES SURROUNDING CALGARY For the communities surrounding Calgary, there were 1,823 unique job postings on the Job Bank in the second quarter of 2010, advertising for a total of 4,285 positions. Forty-seven per cent (2,034 positions) were sales and service occupations, and 23 per cent (979 positions) were trades, transport and equipment operator occupations.

Figure 34: Job Bank: Number of Job Positions by Occupation for Q2 2010

Communities Surrounding Calgary

Ten per cent of the positions (424 positions) were food counter attendant, kitchen helper and related occupations, seven per cent (315 positions) were retail sales occupations, six per cent (259 positions) were cooks, and six per cent (240 positions) were babysitter, nanny and parent helper occupations.



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Table 22: Communities Surrounding Calgary Positions178


6641 Food Counter Attendants, Kitchen Helpers and Related Occupations 4246421 Retail Salespersons and Sales Clerks 3156242 Cooks 2596474 Babysitters, Nannies and Parents' Helpers 2407411 Truck Drivers 1989462 Industrial Butchers and Meat Cutters, Poultry Preparers and Related Workers 162

6661 Light Duty Cleaners 1517611 Construction Trades Helpers and Labourers 1276212 Food Service Supervisors 1028432 Nursery and Greenhouse Workers 986611 Cashiers 828431 General Farm Workers 756211 Retail Trade Supervisors 730621 Retail Trade Managers 707452 Material Handlers 708612 Landscaping and Grounds Maintenance Labourers 666453 Food and Beverage Servers 627421 Heavy Equipment Operators (Except Crane) 622113 Geologists, Geochemists and Geophysicists 607291 Roofers and Shinglers 526681 Dry Cleaning and Laundry Occupations 517443 Automotive Mechanical Installers and Servicers 507271 Carpenters 477292 Glaziers 476411 Sales Representatives - Wholesale Trade (Non-Technical) 451122 Professional Occupations in Business Services to Management 43

7321 Automotive Service Technicians, Truck Mechanics and Mechanical Repairers 427441 Residential and Commercial Installers and Servicers 428253 Farm Supervisors and Specialized Livestock Workers 416662 Specialized Cleaners 389617 Labourers in Food, Beverage and Tobacco Processing 372225 Landscape and Horticultural Technicians and Specialists 358611 Harvesting Labourers 306651 Security Guards and Related Occupations 279619 Other Labourers in Processing, Manufacturing and Utilities 27

BANFF/CANMORE AREA For the Banff/Canmore area, there were 1,017 unique job postings on the Job Bank in the second quarter of 2010, advertising for a total of 2,610 positions. Sales and service occupations dominated the Job Bank in the second quarter of 2010 accounting for 78 per cent of the total positions.




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Figure 35: Job Bank: Number of Positions by Occupation for Q2 2010

Banff/Canmore Area

Fourteen per cent of the positions (359 positions) were light duty cleaners, twelve per cent (310 positions) were food counter attendants and kitchen helpers, and eight per cent (210 positions) were cooks.

Table 23: Banff/Canmore Area Positions179




6242 Cooks 210


5254 Program Leaders and Instructors in Recreation and Sport 178



6671 Operators and Attendants in Amusement, Recreation and Sport 110

6241 Chefs 84

6441 Tour and Travel Guides 80

6682 Ironing, Pressing and Finishing Occupations 45



0631 Restaurant and Food Service Managers 32


5221 Photographers 27

6215 Cleaning Supervisors 27

6672 Other Attendants in Accommodation and Travel 26

6212 Food Service Supervisors 24


3235 Other Technical Occupations in Therapy and Assessment 20

6681 Dry Cleaning and Laundry Occupations 20




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Job ad data is available each week for the Job Bank.180 Since July 21 2009, job postings for Calgary and surrounding area varied from a low of 1,240 postings the week of January 5, 2010 to a high of 2,499 postings the week of June 29, 2010. Job postings for Banff/Canmore area varied from a low of 71 postings the week of December 1, 2009 to a high of 251 postings the week of April 20, 2010.

Figure 36: Number of Job Postings on the Job Bank per week

180 Total job postings are all unduplicated postings appearing in the Job Bank each week. This figure includes postings

from the previous weeks that have been reposted as well as new job postings.



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APPENDIX A

SURVEY METHODOLOGY The Q2 2010 Calgary and Area Employer Survey is based on responses to a telephone questionnaire conducted in May and June 2010. The survey sampled 200 Calgary and area companies with 50 - 99 employees. Following are the number of respondents from each industry sector included in the sample:

IndustryNumber of

Respondents

Mining & Oil & Gas 19Construction 19Manufacturing 21Wholesale & Retail Trade 22Transportation & Warehousing 19Professional, Scientific & Technical Services 25Health Care & Social Assistance 15Accommodation & Food Services/Arts & Entertainment 24Finance, Insurance, Real Estate & Leasing 16Other 20Total 200

The ʻOtherʼ industry category includes a variety of companies from the remainder of the industry categories: Agriculture, Utilities, Information & Culture, Management of Companies, Administrative & Support Services, Educational Services, Other Services and Public Administration.

It should be noted that the method of sample selection provides a good cross-section of opinion. Nevertheless, given the size of the sample, the statistical reliability of the survey is limited, particularly when the data is reported by industry. The value of this survey, however, goes beyond the data captured by the questionnaire. The telephone interview allows companies to expand on their responses, which provides invaluable information and comments that cannot be measured quantitatively.

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