Low unemployment and high participation rate indicate persistent job vacancies in Canada

Asheesh Moosapeta
Published: October 14, 2023

Statistics Canada’s latest Labour Force Survey reveals signs of healthy employment, as the country’s economy continues to normalise after the COVID-19 pandemic.

In the latest report covering September of 2023, Canada’s unemployment rate—the number of unemployed individuals in the country over the age of 15, divided by the country’s total labour force (population aged 15 and older)—was stable at 5.5%, seeing little change from the start of the year.

Similarly, the employment rate (number of labour force participants divided by the Canadian population aged 15 and over) was consistent throughout the year, standing at 62% in September. Employment rose among both core aged (25-54 years of age) women and men, while employment for those 15-25 and older than 54 years of age saw little change.

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These findings seem consistent with a tight labour market in Canada (new vacant positions quickly being filled by unemployed workers), especially given the recent increase in the country’s population. Canada’s labour force grew by 381,000 individuals since the start of the year, a figure that is largely driven by newcomers settling and finding work in Canada—continuing a record-breaking trend of yearly immigration to address labour shortages in key provinces and employment sectors.

Which industries saw the biggest changes in employment?

Several industries saw changes to their employment in September 2023, most of them positive.

The number of individuals employed in educational services saw an increase of 66,000 employed positions in, September, which compensated for the drop of 44,000 in August. Employment opportunities also grew in transportation and warehousing by 19,000 positions.

Conversely, the following industries experienced contractions in employed positions in September:
• Finance, insurance real estate, rental and leasing: -20,000 employed positions;
• Construction: -18,000 positions; and
• Information, culture and recreation: -12,000 positions.

Sectors targeted by category-based selections

To combat persistent labour market shortages in key sectors, Immigration Refugees and Citizenship Canada (IRCC) has instituted category-based selection draws to the Express Entry system; wherein candidates with professional experience in these sectors may be chosen for Canadian immigration with more importance placed on their professional qualifications, rather than their Comprehensive Ranking System (CRS) score. This year is the first where the effects of this new policy may be measured. Candidates with experience in sectors that require labour may find success immigrating to Canada through these specific categories.

Post a 13,000 increase in employed positions in August 2023, transportation and warehousing jobs surged by 19,000 employed positions in September. Since January, employment in transportation and warehousing has grown by 82,000 positions, accounting for over a third (34.4%) of total employment growth across all sectors during this period.

The construction sector experienced a decline in employment by 18,000 employed positions in September, partially counterbalancing an August increase of 34,000 positions. From the peak in January 2023, employment in this sector has reduced by 3.4% or 55,000 positions.

Employment in health care and social assistance saw a minor change in September. Despite a year-over-year rise of 2.5% or 66,000, the rate was on-par with the average growth across all industries over the year (+2.8%). Latest data from the Job Vacancy and Wage Survey indicates that unfilled positions remain high in the healthcare and social assistance sector, constituting 1 in 5 or 19.9% of all job vacancies.

Which provinces saw the biggest changes in employment?

Employment increased in Quebec in September by 39,000 employed positions, marking a 0.9% rise following negligible changes over the previous seven months. The unemployment rate stood relatively stable from the previous month at 4.4%. With the employment growth outstripping the growth in the working-age population, the employment rate rose to 62.3%.

British Columbia experienced an employment growth of 26,000 positions, marking the province's second consecutive monthly gain. The provincial unemployment rate of 5.4% in September remained largely unchanged from August. Ontario preformed similarly in September, adding 19,900 new employed positions across sectors.

In contrast, Alberta experienced a decline in employment by 38,000 employed positions in September, negating the cumulative gains of 30,000 positions over the two previous months. On a smaller scale, New Brunswick also experienced a decrease in employment in September, by 2,700 employed positions or 0.7%.of their labour force.

Positive changes in employment were also seen in other provinces, including:
• Manitoba +8,800 employed positions;
• Saskatchewan +6,000 positions;
• Nova Scotia +3,200; and
• Prince Edward Island +2,700; in September.

What does this all mean?

One of the key insights of this month’s Labour Force Survey, is the continuing tightness of Canada’s labour market. This is evidenced by the consistency of the country’s unemployment and employment rates throughout 2023, despite record numbers of immigration. This is further indication of the importance of immigration to addressing not just historical labour force shortages, but new ones as the continue to arise in Canada.

On the topic of persistent labour shortages, it is important to note that the continue to be present still. The high number of vacant positions in the healthcare sector, despite targeting by IRCC as a skilled category for immigration, is a strong signal that shortages remain high in the sector, and that immigration is a key component to addressing them.

Still there are good signs that IRCC’s new category-based selections are having their desired effect. Two other targeted categories that have seen healthy signs of increased employment and productivity are Canada’s construction and transportation and housing sectors—which have seen sizeable gains to their workforce. These are good indications that IRCC will continue to pursue category-based draws in the future, with the possibility of turning an eye to other sectors in need of workers in Canada (however it is still too early to determine the long-term effectiveness of these strategies).

Importantly, these shortages are spread out through all of Canada’s provinces, but tend to be more punctuated in less populated provinces and areas—making the need for immigration to these areas crucial, and increasing the prevalence of Canada’s Provincial Nominee Program(PNP) in the process.

Overall economic signs relating to labour force growth and participation are favourable, and give indications that Canada is on-track to address shortages in key sectors.

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