OTTAWA: Could this be the tipping point for Canada’s economy, or at least the labour market? We’ll have to wait and see.
Certainly after a disastrous first quarter, the outlook suddenly seems a lot brighter. For that, we can thank an unexpected surge in hiring in May — the biggest gain in seven months, in fact, and more than six times larger than anyone had expected.
And the majority of those new jobs were created in a previously unlikely location — Ontario, which had seen its prominence diminish in recent years as the manufacturing-focused economy turned to energy-heavy provinces for growth.
It’s probably too early to say Ontario is back in the drivers seat, but it indicates that the plunge in oil prices is helping to shift the focus from the West — not counting a still-thriving British Columbia — back to Central Canada.
“I think it’s pretty clear that the Canadian economy is going to rebalance over the next two to three years,” said Jeremy Lawson, chief economist at Edinburgh-based Standard Life Investments.
“You’ve been through a period where the high level of oil prices and the strong investment in that sector — particularly being reflected in the strong growth of Alberta — is unwinding,” he said. “So Ontario, where a lot of that import-competing manufacturing and non-oil related manufacturing is located, is certainly going to improve relative to Alberta.”
Statistics Canada added weight to that scenario on Friday, reporting that about 58,900 new jobs were created overall last month — most of those being full-time positions and mainly in the private sector.
As expected, the unemployment rate remained at 6.8 per cent for the fourth consecutive month, a sign more Canadians have been actively seeking work.
The jump in May employment was the best performance since October 2014, when 62,200 more people found work. The previous big gain was 93,000 in April 2012, the federal data agency said.
Last month’s net new job total surpassed economists forecast for an increase of about 10,000 positions.
Most of those new jobs created during May were in Ontario, with 43,900, followed by British Columbia, at 30,600. Nova Scotia gained 3,700 workers.
Not surprisingly, resources-dependent Alberta saw the biggest decline in employment last month, shedding 6,400 positions in the wake of the oil-price collapse. New Brunswick lost 4,600 jobs, while Newfoundland and Labrador had 4,300 fewer workers, Quebec dropped by 2,100 and net hiring in Saskatchewan — another resources-rich province — was flat.
