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Syncrude Canada Ltd. oil sands worker housing camps near Fort McMurray, Alberta. The province lost 63,500 jobs in the first eight months of this year, according to government data, showing the toll weak oil prices have had on the sector.Ben Nelms/Bloomberg

Alberta lost 63,500 jobs in the first eight months of this year, according to government data, showing the toll weak oil prices have had on the western province.

The losses were the largest since the global economic crisis when the province shed 72,500 jobs over the same period in 2009. Combined with the slump in employment, the average weekly pay in Alberta fell 2.6 per cent to $1,129 in the 12 months ended in August, according to Statistics Canada's survey of employment, payrolls and hours. Alberta's drop was the sharpest of all the provinces and territories.

"Earnings and employment in Alberta have been on a steep downward trend since January," said Andrew Fields, an analyst with Statistics Canada. "Prior to that, they had grown at a faster rate than the national average since the recovery from the economic downturn."

The plunge in oil prices along with the collapse in other commodities such as metallurgical coal and iron ore contributed to a mild recession in the first half of this year, with Alberta bearing the brunt of the pain.

The payrolls survey showed the mining, oil and resources industry shed 26,000 jobs across Canada, with Alberta losing 21,400 of those jobs. Construction and manufacturing sectors also declined across the nation, with the province losing nearly 30,000 of those jobs. In comparison, the total in Canada was a loss of 8,600 jobs, indicating the employment gains registered in other parts of the country. Alberta's retail and hospitality sector also took a hit.

"While there has been an active debate on whether Canada as a whole was in recession earlier this year, I believe there is no doubt that Alberta has been in recession," said Douglas Porter, chief economist with Bank of Montreal.

Many energy companies have slashed jobs to deal with the 50-per-cent drop in oil prices. Much of the oil and mining industry was responsible for creating high-paying jobs during the bull market in commodities. The average yearly earnings in the sector is around $100,000, down from $110,000 last year, but still nearly double the average of non-farm employees in Canada.

Regardless, Alberta's energy sector woes have weighed on the country's labour market. Despite huge job gains in Ontario and British Columbia, the country added just 52,700 non-farm payroll jobs in the 12 months ended in August. Also, the survey showed the average weekly wage across the country increased 0.8 per cent to $947, the smallest increase on record.

"Over the past few years Alberta had been boosting wages, but now [it is] they are pulling them down," Mr. Fields said.

The report, which collects data from business payrolls, diverged wildly from the government's monthly labour force survey, which includes self-employment and is a snapshot of the labour market mid-month.

It showed that Canada lost 59,000 jobs from July to August, while the jobless report reported that the country gained 12,000 jobs.

Even though the payroll survey lags the employment report by nearly two months, it is considered a better gauge of the labour market because it relies on payroll deduction information.

"This survey is a much more accurate representation of what's truly going on in Alberta," BMO's Mr. Porter said.

Follow Rachelle Younglai on Twitter: @rachyounglaiOpens in a new window

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