CANADA EMPLOYMENT AND LABOR MARKET –DECEMBER

2016 – ANALYSIS AND COMMENTARY

BY: PAUL YOUNG, CPA, CGA

DATE: JANUARY 6, 2017

PRESENTATION

• This presentation will discuss the December 2016 labor market trends for Canada

AGENDA

• Summary

• Comments

• Labor Market Trends

• Job Quality Survey / 2015

• Education and Income

SUMMARY – DECEMBER 2016 – LABOR MARKET - CANADA

• Employment rose by 54,000 (+0.3%) in December, the result of gains in full-time work. The unemployment rate increased 0.1 percentage points to 6.9%, as more people participated in the labour market. In the fourth quarter of 2016, employment increased by 108,000 (+0.6%), the largest increase since the second quarter of 2010. This followed a gain of 62,000 (+0.3%) in the third quarter. In the 12 months to December, employment gains totalled 214,000 or 1.2%, compared with a growth rate of 0.9% observed over the same period one year earlier. A year-end review is presented in a separate section below.

Source – Stats Canada

PROVINCIAL IMPACT / LABOR• Employment in Quebec rose 2.2% (+90,000) in 2016, primarily in full-time work (+85,000) and driven by gains in the second half of

the year. The unemployment rate has trended downward throughout the 12-month period, declining 1.3 percentage points to 6.6%.

• In Ontario, employment increased 1.2% (+81,000) in 2016, mainly in part-time work (+74,000). The unemployment rate declined 0.3 percentage points to 6.4%.

• In 2016, employment in Newfoundland and Labrador fell 2.4% (-5,700), all in full time. The unemployment rate was little changed at 14.9%, the result of fewer people participating in the labour market. At year end, employment in Saskatchewan was down by 1.2% (-6,900). All of the decline occurred in the first two months of 2016. In the 12 months to December, the unemployment rate in the province increased by 1.0 percentage point to 6.5%, continuing an upward trend that began in late 2014.

• In Alberta, employment edged down (-0.8% or -19,000) in the 12 months to December. There were notable employment declines in manufacturing, natural resources, and information, culture and recreation. At the same time, employment increased in the "other services" industry and public administration. In 2016, the number of people searching for work increased by 40,000, pushing the unemployment rate up 1.5 percentage points to 8.5%.

Source – Stats Canada

BUSINESS SEGMENT IMPACT / LABOR

• From December 2015 to December 2016, employment increased by 2.0% in the service sector, while it declined by 1.6% in the goods-producing sector. In 2016, employment in information, culture and recreation rose by 6.5% (+49,000), following little change in 2015. Employment in this industry has been on an upward trend since the spring

• Employment in the "other services" industry grew 5.5% (+42,000) in 2016, driven by gains in the last three months of the year. Employment in this industry increased notably in Quebec and Alberta. In public administration, employment increased by 3.9% (+36,000), with most of the growth in Quebec, Alberta and

• Saskatchewan. There were more people employed in finance, insurance, real estate, rental and leasing (+3.5% or +39,000) in 2016. Employment in this industry has been on an upward trend throughout the year. Year over year, employment also increased in accommodation and food services (+2.6% or +31,000), construction (+2.0% or +27,000) and wholesale and retail trade (+1.4% or +38,000).

• On the other hand, employment in natural resources fell 8.3% (-29,000) in 2016, with most of the decline occurring in Alberta and Ontario. There were also decreases in Newfoundland and Labrador as well as New Brunswick. At the national level, the largest declines were in oil and gas extraction.

• In agriculture, employment was down by 4.7% (-14,000), mainly in Quebec. The number of workers in manufacturing declined by 3.1% (-53,000), mostly in the first four months of the year.

• Employment in this industry decreased mainly in Alberta and British Columbia. On a year-over-year basis, the number of public sector employees increased by 2.0% (+71,000), driven by gains in public administration; information, culture and recreation; and health care and social assistance. The number of private sector employees rose by 1.9% (+222,000), with increases across a number of industries in the service sector.

• Self-employment decreased by 2.8% (-78,000) from December 2015 to December 2016. This decline was partly due to the fact that self-employment peaked in December 2015. The declines over this period were spread across several service sector industries.

Source – Stats Canada

TD ECONOMICS - COMMENTS

Source – TD Economics

CANADA LABOUR MARKET TRENDS

Source – Stats Canada

Analysis:• Natural Resources Sector

continues to lose jobs• Construction jobs have

rebounded, but only slowly. Infrastructure money has been slowed

• Service sector is led by public administration and Information technology

• Bulk of the jobs created in 2016 have been part-time temporary jobs

GOODS PRODUCING VS SERVICE SECTOR

Source – Stats Canada

PROVINCIAL EMPLOYMENT / CANADA

• Source – Scotiabank

PROVINCIAL EMPLOYMENT / CANADA

• Source – Scotiabank

LABOUR MARKET – RBC - COMMENTS

Source - RBC

Harper "has the worst record on jobs creation since World War II," Liberal Leader Justin Trudeau said on Thursday. "He knows how to distract with fear and division, and that is something, quite frankly, that Canadians across the country are quite tired of."

Source - http://www.cbc.ca/news/politics/canada-election-2015-stephen-harper-jobs-analysis-1.3254371

JOB QUALITY SURVEY / 2015

Source – CIBC

Comment:• There was an unmistakable jump in the share of part-

timers in the Canadian labour market rate rose from 18% to 20% during the recessionary peak. But at the current 19.3%, that share is still elevated. The contributing factor here was the jump in part-time jobs during the year ending October 2016, with part-time jobs accounting for no less than 90% of all jobs created.

• Canada has matured economy as such good producing jobs are being replaced by service sector jobs.• What can be done?

• Canada needs to focus on innovation and exports

• Canada needs to reduce the time it takes for projects to be approved, i.e. pipelines, mines and processing plants

• Canada needs to revisit all policies from taxation to hydro rates to create the condition to support FDI

POST – SECONDARY ENROLMENT BY FIELD OF STUDY

GRADUATES

Commentary:• Canada is producing 500K to 516K and the job

market is only creating 200K in new jobs• Declining enrolment is impacting education• Healthcare cutbacks are forcing the elimination of

healthcare jobs• Canada is export driven economy. Exports need to

expand to new markets. For each $1B in exports is 5,500 jobs

• Retail Channel is evolving to more eCommerce.• There is a skills gap. Education has not align to jobs

in areas like advance manufacturing, Cybersecurity, Analytics, Expert Farming, etc

•