Recent Decreases in Unemployment: Canadians Aren’t Out of the Woods Just Yet

By Cedric Lamarche
In a recent article published in the Globe & Mail, Tavia Grant reviews the unemployment numbers that have recently plagued Canadians, with a focus on recent increases in jobs.
According to Ms. Grant’s article, 43,000 new Canadian jobs were created in January alone. This increase resulted in Canada’s jobless rate falling from 8.5% to 8.3%. At first blush, this figure appears encouraging for unemployed Canadians who have had to face a depleted employment market in the past year. However, Canadians should be careful in assuming that the strong numbers in recent months, especially in January 2010, reflect a speedy recovery. As the economy readjusts after having faced one of the biggest hits in Canadian history, we are not out of the woods just yet.
In fact, Ms. Grant emphasizes in her article that the current employment rate remains significantly below its level in late 2008. Further, she points to the fact that lately, the monthly employment numbers have been “volatile”. This volatility in the numbers could very well continue as the Canadian economy emerges from the recession.
According to Ms. Grant’s article, some examples of the factors contributing to the unpredictability of job numbers in Canada include: employers requiring their employees to work longer hours instead of hiring, and the likely wind down of positions in the health care sector now that the H1N1 vaccination program, which resulted in a surge of temp jobs in December, is coming to an end.
Another factor which may have an impact on the unemployment rate in Canada is the Federal Government’s proposed increase of Employment Insurance premiums starting in 2011. In order to address the deficit, Ottawa is expected to present a plan which includes, among other things, increases in EI premiums for both Canadian employers and employees. This could very well become a disincentive for employers, especially in small businesses, from hiring new staff and consequently further depress job growth in Canada.
Although recent trends point to a recovery, Canadians should not assume that the employment market will recover at a pace consistent with recent decreases in unemployment. We are currently undergoing an economic transitional phase and many factors may very well impact Canadian jobs, for the best or for the worst.
Cedric P. Lamarche is a lawyer with Whitten & Lublin LLP, an employment law office assisting both employers and employees on various workplace legal matters.