The three tables that accompany this report summarize labour markets in the provinces and cities across Canada. The tables and the following analysis are based on Statistics Canada’s April 2008 figures on employment growth (year over year) and unemployment rates.

West Still Outperforming the East – Thanks to Resources
In the provincial table, the unemployment rates make it clear that western Canada is still outperforming the East. The economies of the West are largely based on resources, which are doing well as a result of high world commodity prices. The products range from crude and refined oil through base and precious metals and on to non-metallic minerals (i.e., uranium), wheat, other grains and fertilizers. The one major exception is a forestry sector that has been devastated by new-home construction weakness in the United States.

The East has resources too, which are largely a mix of forestry (which is suffering) and metals (which are doing well). However, the East’s economy is primarily dependent on manufacturing, much of which is targeted for American consumption. The U.S. economy is in slowdown mode generally and is particularly soft in the area of automotive demand at this time. Much of Ontario’s vehicle production is intended for U.S. drivers.

The four western provinces have unemployment rates that start at 4.3% for Saskatchewan and British Columbia and then drop even lower from there. In the East, Ontario has the lowest unemployment rate at 6.3% and then the figure rises to a high of 13.2% in Newfoundland and Labrador. Newfoundland traditionally has a high unemployment rate due to uncertain employment in the fisheries. The economy of that province has actually made great strides in terms of its Gross Domestic Product (GDP) per capita based on offshore oil production and the opening up of the Voisey’s Bay copper/nickel mine.

City Labour Market Rankings
To simplify the ranking of city labour markets, CanaData calculates a composite index that combines employment growth (from highest to lowest) and the unemployment rate (from lowest to highest).

According to this ranking, five of the 10 tightest labour markets in the country are either provincial capitals or the federal capital. The cities and their rankings are: Victoria (1), Edmonton (2); Ottawa-Gatineau (5); Québec City (7); and Winnipeg (10). The government cities have had particularly low unemployment rates, although they are providing new jobs at a good pace as well.

Another indication of western job market strength is the fact that the first seven cities with the lowest unemployment rates lie on the Pacific side of the Ontario-Manitoba border. In fact, Abbotsford is the lowest-ranking western city according to unemployment rates and it is only thirteenth in a list of twenty-seven.

Eastern Cities may be Narrowing the Divide

On the other hand, there are indications that the East is responding to its job market challenges in at least a somewhat effective way. Six of the ten cities with the highest year-over-year increases in employment lie on the Atlantic side of the Ontario-Manitoba boundary. There is a sense that the super-heated economic growth in the West may be easing back on the throttle just a bit and that the East may be starting to achieve some slight success in reducing the prosperity gap that has divided the two halves of the country over the last several years.

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