The Regional nature of unemployment in Canada

April 16, 2008

While ploughing through data on the history of unemployment in Canada since 1927 for one of my forthcoming books( data which is incidentally not readily available at Stats Can but which should be for free as opposed to being obliged to pay for it) I was intrigued to look at the unemployment data from the current Labour force survey on unemployment by metropolitan region. The March 2008 Labour force characteristics by census metropolitan areas 3 month moving average shows how substantial the regional differences are in unemployment. Generally speaking judging by both the rate of unemployment and the participation rate conditions in western Canada are much better than in central Canada.

The participation rate is important because even if two cmas have rates of unemployment that are close to one another but one has a much lower participation rate generally speaking that metropolis is likely to be worse off in terms of the impact of unemployment on the local economy. It could be surmised that a low participation rate is a sign of a very affluent community where people have less need to work but the income statistics suggest the opposite. A low participation rate is rather a sign of more discouraged workers because of a chronic shortage of jobs being available.

Here are the rates courtesy of Statistics Canada as of March 2008.
by census metropolitan area whose total population accounts for more than 57 % of the country's population.

CMA         Participation rate   Unemployment rate

St.Johns         67.9                       8.1
Halifax           69.6                       4.8
Saint John       66.3                       5.5

Saguenay         60.1                       9.4
Québec           67.0                       4.8
Trois Rivières   64.8                       7.3
Sherbrooke       65.0                     5.9
Montréal           67.4                     7.2

Ottawa-Gatineau 73.7                   4.3

Kingston             66.2                     5.6
Toronto               69.3                     6.2
Hamilton             67.3                     6.2
Kitchner               70.1                     5.1
London                 68.2                     6.5
Oshawa               68.4                     6.4
Ste.Catherine's     65.3                     6.2
Sudbury               64.0                     5.8
Thunder Bay         65.4                     5.3
Windsor               65.9                     8.8

Winnipeg             70.2                     4.1

Regina                 70.7                     4.3
Saskatoon             73.3                     3.2

Edmonton             73.9                     3.8
Calgary                 75.7                     3.0

Abbotsford             67.7                     5.0
Vancouver             64.9                     3.7
Victoria                 68.7                     3.3


The results are startling. First they show the very differentiated regional structure of the country with respect to economic opportunity and unemployment. Just compare Calgary with its participation rate of 75.7 % and 3.0% unemployment with Montréal with a participation rate of only 67.4 % and an unemployment rate of 7.2 %.

If we were to use fully employed Calgary as our base for the participation rate then unemployment in Montréal is actually 8.3 percentage points higher or 15.5 %. The rate in Toronto where the participation rate is currently 69.3 adjusted to the Calgary base would be 12.6 %.

The comparison of Saguenay Québec is even starker. Its participation rate is only 60.1 %. Its official unemployment 9.4 %. Adjusted to the Calgary standard its rate of unemployment would be 15.6 percentage points higher or 24.5 %.

It is quite clear that we have a long way to go before achieving full employment in all of Canada. The industrial heartland of Ontario and Québec and the Atlantic region is suffering from too high unemployment and too low labour participation rates.