Canada’s slow-motion jobs crisis

The Canadian jobs market is stuck in neutral. How long until the public turns on the Prime Minister?

Jeff McIntosh/CP

Jeff McIntosh/CP

When it comes to Stephen Harper’s track record on job creation, and what it might mean for his re-election bid next year, it helps to know which employment legacy we’re referring to: his boast that the economy has created 1.1 million jobs since the recession, or the three Senate jobs he doled out in 2008 that haunt him still?

The consensus is that the latter poses the greatest risk to the Prime Minister. The Mike Duffy Senate expense scandal will almost certainly continue to deliver manna to journalists right through the rest of the year, with the possibility of a trial underway next fall, just as the campaign gets going. Patrick Brazeau’s fraud case will probably bubble up somewhere in there and Pamela Wallin’s might, too, if the RCMP follow through on their fraud allegations with charges. All three cases threaten to cast a long shadow over the campaign.

But there’s been remarkably little attention paid to just how much Canada’s job market, the cornerstone of Harper’s economic messaging, is crumbling, and what danger that could pose to the Tories. It’s getting hard to find any good news among the monthly jobs figures. In June, Canada created a mere 72,000 net new positions from the year before, just one-third the average level of job creation for any 12-month period going back to the 1970s. In fact, that 72,000 annual jobs figure was much closer to the 45,000 level Canada endured when the job market briefly cratered after the 9/11 terrorist attacks. That marked Canada’s slowest pace of employment growth outside of a recession in 40 years, and we’re now just a notch above that. Might we reach that low again? It’s entirely possible.

Undeterred, the government has clung to its jobs-a-plenty message. At a speech in Calgary in early July, Harper told party loyalists the 1.1 million new jobs added since the recession ended have been “overwhelmingly full-time, high-paying, private sector jobs.” But even that’s debatable. The quality of new jobs has been on the decline; half of all new employment gains over the last year were in part-time positions, and the bulk of new jobs since May 2009 have been in occupations that paid wages on the mid-to-low end of the scale.

It wasn’t a surprise Harper chose Calgary for that speech. Aside from his party’s deep roots in Alberta, the province has been the one true place where his message resonates. With a population just one-third that of Ontario’s, Alberta created nearly 60 per cent as many jobs as Ontario has since the recession. In fact, Alberta was Canada’s job engine long before Harper came along. Without it, employment growth would be appalling.

And yet the weakening national job market remains an issue squarely on the back burner. Indeed, Canadians seem largely indifferent to it, so far. Two bits of data landed recently that shed some light on how people see the economy, and both show job worries are far from top of mind. A Nanos Research Group poll for Bloomberg News asked Canadians if they feel secure about their jobs, and more than 68 per cent of respondents reported a sunny outlook. At the same time, results from a series of focus groups conducted by the federal Finance Department in January have been released, showing that issues such as education, health care, pensions and veterans were all seen as priorities above the economy. In other words, now that Canadians no longer have to panic about their next paycheques, they feel liberated to worry about other squishier, albeit important, issues.

Part of that is likely due to the nature of this slowdown. Compared to the global recession, which hit employment levels like a sledgehammer, this made-in-Canada jobs crisis is unfolding at a glacial pace.

But it’s also the case that Canadians have spent the better part of the last five years being told, and telling themselves, that Canada’s economy is somehow exceptional. We’ve heard it so many times, we actually believe it. This might seem as though it would play to Harper’s favour. And, to reinforce that notion, we’ll no doubt be inundated with new mutations of Action Plan ads touting measures Ottawa has undertaken to promote “jobs, growth and long-term economic prosperity.”

But there’s a danger for Harper in this complacency. Canada isn’t special. We do not have a Teflon job market. And, unless things begin to turn around, at some point it will dawn on a great many people that the shine has come off Canada’s economic miracle—at which point, voters are going to ask: So, Mr. Prime Minister, what have you done for us lately?

What are Harper’s options? Well, you can be sure that if his government was wary in the past of instituting policies that might rock Alberta’s oil patch—carbon tax anyone?—those considerations are now completely off the table. And for a Prime Minister whose relations with his counterpart in the U.S. have been among the most strained in history, Harper has to hope beyond hope that the American recovery is not just sound, but a real humdinger.

There are limits to what any Prime Minister can do to juice the job market when so much depends on the policies of provincial governments. In the case of Ontario and Quebec, simultaneously the two biggest job markets and biggest job laggards in the country, the trend has been toward more intrusive government, bigger deficits and higher taxes—none of which has resulted in a lick of success at boosting employment. At least in Quebec, Premier Philippe Couillard has embarked on a plan to tackle the province’s fiscal shortfall. But that necessary belt-tightening will itself weigh on a job market where the majority of employment gains in recent years have been in the public sector.

Come to think of it, maybe Harper might welcome a bout of Senate scandal headlines come next year. It would be easier to fend off than the jobs crisis that threatens to gut his track record on the economy.


Canada’s slow-motion jobs crisis

  1. Most Canadians haven’t the slightest interest in Duffy/Wallin/Brazeau….they just want them gone.

    Canadians DO know we need education, healthcare and pensions to even HAVE a life so that they want to hear about.

    Talking smack to Putin, Hamas…and even the UN fergawdsake just makes people roll their eyes and pray for an early election.

  2. All the big paying jobs are in the PMO, and on the Harper security team. Harper spends more on security detail and advisors in short pants(and vanity videos), than he does on helping veterans.

  3. Canada’s employment rate is absolutely fine. Ontario’s is awful, but there’s nothing the federal government can do when the Ontario provincial government is determined to kill any private enterprise in that province.

    I notice that this column doesn’t actually bring out a single number to back up any of it’s claims. Why would that be? Is this author of the Justin Trudeau opinion that, despite all the numbers showing Canada’s doing great, some people just don’t “feel” great?

    Whatever. The reason it’s not top-of-mind for people, is because Canadians are quite content with the current state of the economy, and rightfully so. Now if only the Ontario government could get it’s act in order, Canada could REALLY thrive!

    • Oh I think Ont has carried the west long enough. Time to do for yourselves.

      And we like our govt just fine.

      • oh, good give back all those transfer payments! Ontario has never carried the west since oil was discovered. its been the other way around

        • Ontario doesn’t get any transfer payments. We get a small discount on what we pay into it.

          Ontario has carried every province in this country…the only province that has.

    • Ontario’s Liberals and their Union Leader allies won’t be satisfied until they’ve turned Ontario into the next Detroit.

      • The unions are allies of the NDP not the Libs….and Ont is nowhere close to being Detroit, or Greece or Somalia or anywhere else.

        We are very well off here. We supply 40% of Canada’s GDP.

  4. Automation,progress and synergy. Three words that are changing the methods and needs of employers. In time we might even find a way to replace lawyers, doctors and CEO’s. Be kind to people on the way up for you may meet them again on the way back down.

  5. How long until Canadian politicians start realizing that we need an immediate moratorium on all new immigration?
    Canadian workers are being seriously harmed by unnecessary immigration that floods the market for most entry-level jobs. Average wages would easily increase if immigration was halted. Stop flooding the market for all jobs with immigration and average wages will go up while unemployment goes down. It’s too bad that so many politicians ignore this reality, preferring instead to collaborate with foreign gov’ts, especially China, that want to get their people into a resource-rich country like Canada.

    • Canada needs a million immigrants….a year.

      • no, Canadians just need to have more than one child per family instead of importing people who will

        • So go have em.

    • much better than sending our raw material to the US so they can send it back at three times what it should cost if harper hadn’t decided to let Dubyas threats seem real,

  6. Canada has lots of jobs. What we don’t have is trained people to fill them.

    It’s called structural unemployment.

    There are currently lots of unemployed guys, high school or less, with 20 years in, who used to work on the line at car plants.

    What other jobs do you think they can do?

    • Emily, can you hear yourself thinking ?
      I’ve met more MA’s, MSc’s,.., PHD’s,…, slinging coffee at Tim’s, than I have met unemployed auto-plant workers.
      Why? -because those unemployed auto-workers have left southern Ontario to work in Alberta,…, in whatever they can get.

      • No Rickster, you haven’t.

  7. “…stuck in neutral…” ?
    holy-hemaroids batman, if anything this laughable “job market” in Canada has actually been going in REVERSE since 2008 !
    …even the 74k of Feds,…, that have been laid-off/letgo/whatever, over the past few years know that there is NO so-called “Job Market” in Canada, except for maybe Alberta, and some TFW’s, …
    – LoL.

    comon’, get a grip people, it really is that bad.