Jobless benefits surge in Alberta as oil shock takes vicious toll

Lower oil prices are triggering a jump in jobless benefits in Canada's main oil-producing provinces.

Across the country, the number of people getting employment insurance benefits rose 1.1 per cent in March from a month earlier, Statistics Canada said Thursday. The level is 2,600 higher than a year earlier, marking the first year-over-year increase in five years.

Alberta saw an 8.9-per-cent monthly increase, leading growth for the third month in a row. It's not just Alberta, though – Saskatchewan and Newfoundland also recorded gains. These are the three provinces whose economies are most exposed to the oil shock.

The increase was expected. Bank of Canada Governor Stephen Poloz said this week that we probably "still haven't seen the full impact of the oil price shock reflected in the employment data."

The jump reflects "a labour market that is not operating at an optimal level," said Benjamin Tal, deputy chief economist at CIBC World Markets.

More than half a million Canadians are receiving EI. But the picture varies among provinces. British Columbia and Prince Edward Island saw small monthly increases. Quebec saw a drop in beneficiaries while there was little change in New Brunswick and Ontario.

Insolvency stats paint a similar picture of divergent trends. Insolvencies in the six months to February are higher in Saskatchewan and Manitoba, Atlantic Canada and Alberta, where the cumulative number has climbed 6.5 per cent, the worst showing since the recession, according to CIBC. At the same time, insolvencies have fallen in Ontario.

In Alberta, the number of people receiving jobless benefits rose to 38,800 in March, the fifth straight monthly increase and the second-largest for the province since June 2009, Statscan said.

Among occupations, gains came among people who had worked in manufacturing, natural sciences and primary industry, which includes mining, oil and gas.

Among cities, the number of beneficiaries rose for a fifth month in Calgary and Edmonton.

St. John's, Saint John, Saskatoon, Abbotsford-Mission and especially Windsor recorded monthly increases. (Windsor's large jump may ease, as about 5,000 auto workers are back on the job this week after a 13-week plant retooling.) Compared with last year, the biggest gains in EI numbers are in Saint John, Calgary and Edmonton.

Canada's jobless rate has held steady at 6.8 per cent for the past three months, despite volatility in the oil patch. "Given the low unemployment rate, some of the increase [in EI recipients] suggests a mismatch in which people do not have the skill set that the economy needs," Mr. Tal said.

The EI numbers may subside in the coming months, at least in some provinces. The number of people filing an EI claim – an indication of how many people will wind up becoming beneficiaries – fell 1.5 per cent in March following two months of increases, the agency said. EI claims declined in Manitoba, Ontario and Quebec.