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Rony Sehayek, an IT specialist who's been out of work for a year and his sons, Dan, left, and Matthew pose get dressed for photos in their Brampton apartment, October 20, 2010. Sehayek can no longer afford to put his boys through karate lessons.

J.P. Moczulski/The Globe and Mail

The economy has officially left the recession and the stats show all the jobs lost have now been recovered. But a closer look at Canada's largest city shows troubling trends behind the numbers.

Bankruptcies in Toronto are nearly triple the national average. Higher-paying manufacturing jobs are disappearing while lower-paying service-sector jobs are being created. More people are waiting for social housing. Welfare rates are the highest in more than a decade.

The unemployment rate for the census metropolitan area has risen to 9.2 per cent, well above the national average, and an analysis to be released on Friday predicts it will remain elevated for two more years. All this is straining social services just as charity funding is getting squeezed.

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It's a sobering picture of a city that's home to one in eight jobs in the Canadian economy. The recession may indeed be over, but its legacy lingers.

"There are an awful lot of people who are facing very difficult and trying times, and the aggregate economic numbers mask that story," said Craig Alexander, chief economist at Toronto-Dominion Bank, which is releasing the paper.

Although the number of jobs has returned to pre-recession levels, the reality is that full-time positions disappeared while more part-time jobs were created, he added. He expects the city's jobless rate will stay high through 2012 amid tepid economic growth, fiscal restraint and a weak factory sector.

Many of the country's 1.5 million unemployed are seeing sluggish hiring. Rony Sehayek, a former IT specialist at Nortel Networks Corp., is one of them. The 50-year-old father of two has been out of work for more than a year. He has had to cash in RRSPs and can no longer afford his son's karate lessons, or maintenance on his car.

Curbed spending by Mr. Sehayek's family spills into the broader economy - the karate teacher has fewer students, business slows for the mechanic - pointing to cooling retail sales.

The Concordia University commerce graduate spent much of the past year doing all the right things - taking night courses, networking, polishing his resumé, upgrading his skills, applying for jobs. No luck. "It's very difficult," he said. "Companies are looking for more specific requirements. And there are a lot more candidates applying."

Social assistance rates tell much of the story. Welfare numbers in the city of Toronto more than doubled in the recession, and continued to climb this year, to about 90,000 caseloads. Agencies are seeing a wave of people who were in the city's middle or high-income category using their services for the first time.

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The unemployment rate for the city of Toronto itself is now 10.3 per cent, compared to the national average of 8 per cent.

Rising welfare rates are worrisome because once someone lands on social assistance, skills atrophy and re-entering the labour market becomes harder. Squeezed budgets - welfare pays about $585 a month in Ontario - on top of rising debt levels and muted employment prospects have broader impact on everything from housing to consumer spending.

The recession may have officially ended last fall, but demand has only increased for services such as resumé-writing workshops, child care, free meals and counselling families on abuse, said Susan McIsaac, president and chief executive officer of the United Way Toronto, which supports 200 agencies in the city.

"Some positive numbers give a sense of serenity, but underneath that is churn, and a lot of people who are not making ends meet," she said. "Some of our agencies would say it's nearing a crisis."

TD researched and wrote the report independently, but the bank has ties with the United Way. Ed Clark, TD's chief executive, is chair of the United Way Toronto 2010 campaign, under way now.

Charities are grappling with an explosion of need just as government funding is dwindling and donations are on the wane.The United Way maintained its donation levels last year, but nationally, more than half of charities are seeing higher demand, and 29 per cent say their existence is at risk, Imagine Canada said in an August report.

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Strain is showing up at the food banks. Daily Bread, which supports 170 member agencies, says activity rose 16 per cent in the year to March, or by 123,000 uses - to a point where some trucks are wearing out from carrying heavier loads more frequently.

The fastest-growing population at food banks are single males from 45 to 60 years old who were typically employed in manufacturing, lost their jobs, exhausted unemployment benefits and have liquidated their assets, said executive director Gail Nyberg. Most can't find work because they're not qualified for the services jobs on offer. "As citizens of this city and province and country, we need to figure out what to do. Many will never work again."

Friday's report, released exclusively to The Globe and Mail and CBC, comes days before Torontonians head to the polls to a elect a new mayor after an election campaign made scant reference to poverty issues.

The recession's hangover has left some relying on services they've never needed before. Administrator Brenda Renwick has been looking for a job since last October after 20 years of working at the same company and is now a frequent visitor to Times Change women's employment services. She characterizes the job search as difficult, frustrating and depressing. "My stress level is off the scale. It does affect the sleep," she said.

And she's skeptical about the notion of a recovery. "I really don't think we're out of a recession. It's not going to get back to the way things were. There's still a lot of unemployment out there."

With a report from Anna Mehler Paperny.

By the numbers:


Number of social assistance caseloads in the city of Toronto, more than double 2007 levels.


Percentage increase of households looking for assisted housing in Ontario from 2009. Almost half are from Toronto, although it comprises just a fifth of the province's population.


Toronto's ranking of 15 major Canadian cities in terms of income inequality, as of 2005.


Manufacturing's share of total employment, down from its peak of 16 per cent almost eight years ago.


Number of 2009 consumer insolvency filings in the GTA is nearly triple the national average.

Source: TD.

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