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Payroll firm ADP starts monthly labour report that aims to be more timely than Statistics Canada

Exhibitors speak with visitors at the 2014 Spring National Job Fair and Training Expo in Toronto in this April 3, 2014, file photo.

AARON HARRIS/REUTERS

Canada has a new labour report.

Payroll processor ADP launched a monthly jobs report in Canada that relies on payroll data it collects from Canadian employers.

Its first report showed a net job loss of 5,700 positions in October, owing to declines in construction, natural resources and trade.

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ADP aims to offer a more timely version of Statistics Canada's Survey of Employment Payrolls and Hours (SEPH), which also relies on payroll data but is issued about 60 days after the month ends. The ADP report will be released on the third Thursday of every month, similar to the payroll processor's jobs report in the United States.

But although ADP's U.S. national jobs report is followed south of the border, Canadian economists are not sure it will gain the same kind of traction in Canada.

"More labour market data is definitely welcome in Canada but ADP faces an uphill battle to become a widely watched measure in Canadian markets," Derek Holt, head of capital markets economics with Bank of Nova Scotia, said in a research note.

ADP's research arm worked with Moody's Analytics to develop the report. It said the report was "driven by data of 2 million workers" and government data such as housing permits and merchandise exports.

Mr. Holt said the report uses "heavy model inference to infer the change while not providing the richness of data," such as wages and hours that are available in StatsCan's labour reports.

ADP's researchers said that they hoped to produce more detailed reports in the future.

But even if the data processor manages to deliver provincial employment data by industry, for example, other economists questioned the accuracy.

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"The danger with these things, if you want to [track industries] at provincial level, you will probably get a very small sample and of course when you get a small sample it can be hugely skewed," said Don Drummond, Toronto-Dominion Bank's former chief economist who has worked on a federal panel to try to improve the country's labour data.

ADP's first Canadian jobs report had very different results from Statscan's Labour Force Survey (LFS), which showed a net gain of 35,000 positions from September to October.

However, the LFS has its own problems. The survey has a wide margin of error and can swing dramatically from month to month. It relies on Canadians providing information about their job status to Statscan's data collectors, as opposed to payroll data. ADP's own five-year trend data for Canada does show it tracking Statscan's results.

"It's another piece of information," Mr. Drummond said. "It will be interesting to see how it tracks the SEPH survey, at least you could say it is a useful piece of information because you get it sooner."

Statscan did not respond to a request seeking comment on the new report.

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Economics Reporter

Rachelle Younglai is The Globe and Mail's economics reporter. More

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