Finance Minister Jim Flaherty says the number of Canadians collecting jobless benefits, already at record levels, will probably continue to rise.
Mr. Flaherty's comments Tuesday came after Statistics Canada said the number of people receiving benefits climbed sharply in May, up 9.2 per cent from April and the highest since the federal agency began collecting such statistics in 1997.
Some 778,700 people received regular benefits under the Employment Insurance program in May, up by 65,600 from a month earlier.
The number of EI beneficiaries has jumped almost 56 per cent, or by more than 278,000, since employment in Canada peaked last October.
The surge in benefit claimants continued to stoke controversy in Ottawa, as the Liberals blamed the governing Conservatives and estimated the true number of unemployed tops what Statistics Canada has disclosed.
"The sad reality is these numbers only scratch the surface of the hardships many Canadian families are facing," said Liberal House Leader Ralph Goodale.
"For everyone getting EI benefits, there's someone else who's lost their job but can't access Employment Insurance."
Alberta and Ontario showed the fastest rates of increase in May, Statistics Canada said.
The sharp rise surpassed the increase of 3.7 per cent in April.
"The good news is, recovery is at hand," said Patricia Croft, chief economist at RBC Global Management. "The bad news is, employment tends to be a lagging indicator, and for many Canadians I think this isn't going to feel like a recovery."
Ms. Croft expects unemployment will continue to rise, hitting 10 per cent in the United States and at least 9 per cent in Canada.
Tuesday's EI numbers, she said, "are a very cogent reminder that we still have some challenges ahead of us."
The statistics are certain to raise the ire of those pushing for change to the employment insurance system, to make benefits more accessible to those thrown out of work during the recession. Critics say many more Canadians have been shut out from benefits.
Last spring, Liberal leader Michael Ignatieff threatened to vote against the government if it failed to meet demands for an overhaul. In the end, the Liberals and Conservatives agreed to set up a panel that would study the issue.
Tuesday's numbers continue to show growing problems in Western Canada. Alberta, once Canada's boom province, marked the largest percentage growth in beneficiaries over the seven months since employment peaked. Following Alberta were British Columbia, Ontario, Saskatchewan and Manitoba, each marking record levels.
In May alone, the number of claimants in Alberta, where the jobless rate has spiked to 6.6 per cent from 3.7 per cent seven months ago, surged 16.8 per cent. That was almost matched by Ontario, where the number of beneficiaries soared 16 per cent.
Quebec, Manitoba and the eastern provinces have, over the past seven month, posted increases below the national average of 55.6 per cent.
Statistics Canada cited hefty increases in Calgary, Edmonton, Vancouver, Victoria and southwestern Ontario, home to the battered auto industry. Some centres - such as Kelowna and Cranbrook, B.C., and Windsor and Guelph, Ont., have seen their numbers more than triple.
Economics strategist Millan Mulraine called the numbers "a sobering reminder" on the state of the labour market.
"Indeed, even though the Canadian economic recession appears to be nearing an end and the pace of monthly job losses has abated, displaced workers continue to find it difficult to find new jobs, which continues to weigh on the government's coffers."