Alberta’s jobless toll may be the highest in 13 years, but the worst is yet to come as companies continue to cut workers during a deep recession, say economists.

Alberta’s unemployment rate rose to 7.2 per cent in July–a high not seen since June 1996, said Statistics Canada, which released unexpectedly grim labour market news Friday.

Canada lost 45,000 jobs–more than feared. Most economists were predicting 20,000 job losses in July.

Alberta lost 3,700 jobs compared to June, while the province’s labour force increased by 5,600 in July as jobseekers moved to the province.
The number of full-time workers fell by 11,900 in Alberta; those working part-time increased by 8,100– another sign economists say points to a weakening labour market.

“The current weakness in conventional oil and gas drilling, as well as the sharp retrenchment in construction and manufacturing activity, has left many companies no choice but to cut payrolls,” said ATB Financial senior economist Todd Hirsch.

Job losses in Alberta will only get worse in the next few months, he predicted.

“Labour indicators … are well-known to lag conditions in the overall economy. So even if the recession appears to be losing its grip, we don’t expect the jobs market to reach a bottom until sometime in the fall or early winter.”

Premier Ed Stelmach is confident oil and gas drilling incentives introduced this year will keep some Albertans from joining the unemployment ranks.

“The numbers are increasing more than originally predicted, and it’s very concerning to me,” he said.

“But I can assure all Albertans that we will maintain all the programs that are necessary to look after those who not only lost their jobs, but look at how we also can get them back into the workforce.”

Alberta’s unemployment rate could see improvement in September when many jobseekers leave the labour market for school or training, said Sally Stuike, a spokeswoman for Alberta Employment and Immigration.

“We are hopeful and optimistic that the jobless rate here in Alberta will improve,” she said, noting the latest statistics at least show an increase in part-time jobs.

As well, the overall job picture wasn’t bad in all parts of Alberta. The Lethbridge-Medicine Hat area’s unemployment rate remained unchanged from June to July at 5.5 per cent. The Banff-Jasper-Rocky Mountain House area remained at 5.9 per cent. Wood Buffalo-Cold Lake’s jobless rate actually declined to 5.4 per cent in July from six per cent a month earlier.

Compared to the same time a year earlier, there were 51,100 more people in Alberta’s labour force–an increase the provincial government and economists attribute to an influx of people from other parts of Canada.

Meanwhile, since July 2008 Alberta has shed 26,100 jobs.
Between June 2009 and July 2009, finance, insurance, real estate and leasing sectors lost 7,600 jobs. Accommodation and food services lost 4,600 jobs in the same period.

Third lowest
Alberta maintained Canada’s third-lowest jobless rate, behind Saskatchewan at 4.7 per cent and Manitoba at 5.2 per cent.
But since last fall, Alberta has been the hardest hit by job losses, said one economist.

“While the national jobless rate has climbed by 2.3 percentage points since the onset of the recession in October 2008, unemployment has surged the most in Alberta (a gain of 3.5 percentage points), Newfoundland (plus 3.3), British Columbia (plus 2.6) and Ontario (plus 2.6),” said Pascal Gauthier, an economist with TD Bank Financial Group.
The national unemployment rate remained flat in July at 8.6 per cent as some jobless stopped looking for work, the federal agency said. The country lost 45,000 jobs full-and part-time jobs in July.

“The current recession’s job loss tally now sits at 414,000, or 2.4 per cent, and keeps inching closer to that experienced in the early 1990s recession (3.3 per cent),” Gauthier said.

“No one said it was going to be a smooth recovery, and especially not for employment,” said Douglas Porter, deputy chief economist with BMO Capital Markets, which had been expecting something in the range of 30,000 job losses in July.

“The underlying picture still looks quite soft, and there’s little sign here that the economy is quickly turning the corner.”

Most job cuts Canada-wide were in the accommodation, food services and construction sectors, while the retail and wholesale trade sectors added workers.

Seven per cent
In Edmonton, the unemployment rate inched up to seven per cent in July, up from 6.5 per cent in June. Calgary’s rate also rose, to 6.9 per cent from seven per cent. The economic region in Alberta with the highest unemployment rate was Athabasca-Grande Prairie at 8.4 per cent; the lowest was Wood Buffalo-Cold Lake at 5.4 per cent.

Alberta’s latest jobless increase prompted Alberta Federation of Labour president Gil McGowan to call on provincial and territorial leaders to pressure Ottawa for swift reform of the national employment insurance system.
“Albertans are losing jobs at a faster pace than workers in most other provinces,” McGowan said. “But the system that is supposed to provide a safety net is failing us miserably. Only about 40 per cent of Alberta’s unemployed are getting EI benefits –the lowest rate in the country.”

The AFL and other labour groups want a uniform system of EI eligibility to replace the current system that requires people to work different numbers of hours to qualify for benefits depending on which region of the country they live.

“We think it’s nothing short of a scandal that a prime minister from Calgary continues to drag his feet when it comes to EI reform, even when Albertans are the ones who are being the most discriminated against.”

Edmonton Journal, Sat Aug 8 2009
Byline: Bill Mah