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Jobs Jobless rate on the rise but brighter outlook remains

File photo of job seekers lining up at a jobs fair in Toronto.

j.p. moczulski The Globe and Mail

Canada's labour market ended last year with a whimper, though 2014 could herald better times for job seekers.

The country shed a surprising 45,900 positions in December while the jobless rate climbed three notches to 7.2 per cent, leaving it similar to year-earlier levels.

One month doesn't make a trend, and the employment drop comes after modest increases in the previous three months. Still, job growth petered out as the year went on, resulting in average gains of 8,500 a month – a third of the monthly pace in 2012.

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"The December numbers were disappointing but it's just one month – when you look at the trend, it's slow growth, in line with the Canadian economy," said Benoit Durocher, Montreal-based senior economist at Desjardins Securities.

The pace of hiring could pick up, for several reasons. The U.S. economy, where most of Canada's exports flow, is finally on sturdier ground (notwithstanding Friday's mixed jobs report). And the weaker Canadian dollar may finally give manufacturers and exporters the confidence to invest and hire.

"Everything suggests that the gradual improvement of global economic conditions will allow the Canadian labour market… to improve in 2014," said Mr. Durocher.

Several factors made employers reticent to hire, from slow growth to uneven external demand, lower commodity prices, heated competition and, on the government side, reduced budgets. In the second half of the year, a string of companies, from Sears Canada Inc. to Potash Corp. of Saskatchewan Inc. and BlackBerry Ltd., announced job cuts while a wave of manufacturers, particularly in Central Canada, said they plan to close plants.

Last month's job losses were all in full-time positions, which tumbled by 60,000. In the past year, full-time employment was little changed.

And part-time positions have risen 2.5 per cent, a reflection of wobbly confidence.

Ontario bore the brunt of last month's job losses. Its unemployment rate climbed to 7.9 per cent from 7.2 per cent as the business services, agriculture and natural resources sectors reduced head count.

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Workers ditched self-employment. The ranks of the self-employed fell by 37,900 in the month, while private-sector firms – which account for the bulk of last year's job growth – trimmed 26,300 positions and the public sector added 18,200 jobs in December, Statistics Canada said.

It wasn't all glum news. For those who had jobs, wage gains held steady at 2.4 per cent from a year ago. British Columbia and Newfoundland created jobs last month, with Newfoundland's average jobless rate last year falling to its lowest point since record-keeping began in 1976.

Alberta led the pace of hiring last year, while Saskatchewan ended 2013 with the lowest jobless rate in Canada, at 3.9 per cent.

Among sectors, the only industries that tallied meaningful job growth last year were in professional, scientific and technical services, and natural resources – industries that tend to have better pay – Statscan said. Losses happened in agriculture, educational services, public administration and manufacturing. Construction has now shed jobs for four consecutive months.

There are several soft spots, among them a youth jobless rate that hit 14 per cent last month, with little employment growth last year. And long-term unemployment remains elevated, with the number of Canadians out of work for prolonged stretches well above prerecession levels.

Rebecca Brouwer is one of them. She got her licence as a paralegal in March, 2011, and has been looking for a permanent job ever since. She's done some temporary work, but says employers are reluctant to hire, and when they do, they have their pick from hundreds of candidates.

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"I'm hoping it's going to get better, but I'm finding contract work is where it's going – filling in for mat leaves or vacations, contracts or people starting their own businesses," says Ms. Brouwer, 41, who lives in Burlington, Ont. "It's hard out there."

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