Canada’s jobless rate unexpectedly rose in February, reaching its highest level in nearly three years as weak oil prices continued to bludgeon resource-rich provinces.
The country missed expectations for employment gains and lost 2,300 jobs, with a steep decline in full-time positions. The unemployment rate edged up one-10th of a percentage point to 7.3 per cent in February, the third consecutive monthly increase, according to Statistics Canada’s labour force survey.
“No matter how I slice or dice it, the results seem consistent with an economy that lacks traction,” said David Watt, chief economist with HSBC Bank Canada.
Across the country, full-time employment fell by 52,000 while part-time jobs rose by 49,500. Employment in the services-producing sector fell by 44,500 positions, with big losses in the public-sector health care and education.
Nearly 9,000 people lost work in the natural-resources sector last month, with Alberta shouldering about half of the losses. The unemployment rate in the province jumped to 7.9 per cent from 7.4 per cent in January, as more Albertans hunted for work. Weakness was also seen in other parts of the province’s economy, including accommodation and transportation.
Tens of thousands of positions have already vanished since oil started plunging in mid-2014. Husky Energy Inc. and Cenovus Energy Inc. were among those in the energy sector laying off workers again last month.
“Our main source of concern remains Alberta’s labour market,” Sébastien Lavoie, assistant chief economist with Laurentian Bank of Canada, said in a research note. “These unemployed workers will continue to have a difficult time finding a new job, given that the province’s economic activities are insufficiently diversified,” he said.
It’s not just Alberta under duress. Saskatchewan lost 7,800 jobs, the most of any of the resource-dependent provinces. New Brunswick jobs declined by 5,700 after the closing of a potash mine.
Even Ontario, which along with British Columbia is expected to see healthier economic growth, shed 11,000 positions. Losses were seen in the services sector, such as education and food services.
British Columbia was the only province to create a significant number of jobs: Employment grew by 14,000 because of an increase in trade. The B.C. economy is buoyed by a hot real estate market, tourism and film production.
“When we look at the economic outlook, B.C. stands pretty clearly head and shoulders above the rest of the country right now,” said Robert Kavcic, senior economist with Bank of Montreal.
This is the last labour report before the federal Liberal government unveils its budget later in March. The Liberals are expected to announce new infrastructure spending to help bolster the economy. Although the resource-dependent provinces are banking on some relief, some economists do not expect the stimulus spending to have a big impact on the labour market right away.
“What we need is more of a change in perception of where we want the economy to go and set the stage for not just government, but for the private sector to start creating jobs,” Mr. Watt said. “The private-sector job creation is just terrible. The private sector doesn’t have confidence to start adding jobs and that’s what we need,” he said.
Analysts polled by Bloomberg had expected employers to create 10,000 positions and the unemployment rate to remain at 7.2 per cent.Report Typo/Error