Ontario Hardest Hit As Full-Time Jobs Tumble in Canada, Unemployment Rate Rises
Friday, July 11, 2008 4:53 PM
Symbols: BNS
By Julian Beltrame, THE CANADIAN PRESS

OTTAWA - Tens of thousands of Canadians, most of them in Ontario, lost their full-time jobs or were forced into part-time work last month as the country's non-energy economy showed signs of retreating, two Statistics Canada reports suggest.

Friday's much-dreaded jobs report was even worse than forecast, with the country losing 39,200 full-time jobs, and manufacturing-dependent Ontario alone accounting for a loss of 45,500 full-time positions.

In all, there were 5,000 fewer net jobs - as a result of a pickup of 34,200 part-time employment - lifting the national unemployment rate up one-tenth of a point to 6.2 per cent, the highest it's been since January, 2007.

While the energy-rich western provinces continue to grow strongly, Ontario and Quebec have been battered by troubles in the forestry and auto sectors, which have been squeezed by the high loonie and the slumping U.S. economy. As well, a softening housing market is affecting construction employment.

"Reality may finally be catching up with the Canadian job market," said Douglas Porter, deputy chief economist with BMO Capital Markets.

"We wouldn't make too much of a one-month dip in employment. However, the jobless rate continues to gradually grind higher ... while full-time employment growth is clearly fading."

And CIBC economist Krishen Rangasamy said Canadians should expect more monthly declines, or very modest gains, for the rest of the year as Canada's export economy continues to struggle from reduced demand in the U.S.

But not everyone shared in the pain. Oil-rich Alberta created a record 10,000 new jobs in June, although all were part-time, as the oil-rich province's employment rate rose to an all-time high 72.2 per cent. Nova Scotia, which exports natural gas, gained 6,200 jobs.

The split in the Canadian economy between resource and goods producing regions was confirmed by the increase in Canada's merchandise trade surplus to $5.5 billion in May, most of it due to surging energy prices to the United States.

The trade surplus in energy hit a record $7.2 billion, while trade in machinery and equipment, autos and consumer goods, most produced in Central Canada, all declined sharply.

The Canadian dollar traded near its Thursday close of 99.10 cents US most of the day as the markets balanced the negative impacts of the job losses against positive bounce from higher oil prices.

The weak jobs number - particularly in full-time employment - should be a wake-up call to the government and the Bank of Canada, said Canadian Labour Congress president Ken Georgetti, who called for higher interest rates.

"We need decisive intervention," Georgetti said.


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