Canada’s economy continues to struggle with job creation that keeps up with its population. Statistics Canada (Stat Can) data shows the unemployment rate was unchanged in December. However, the population growth means nearly 20% more unemployed than last year. That excludes the demand for work from international students—many attracted by promises of working extended hours while they study.
Canada Added 202k More Workers Than Jobs Over The Past Year
Canada’s record population boom continues to add more people than jobs. The working-age population (15 years or older) rose 0.22% (+74.2k people) to 32.95 million in December. At the same time, the number of employed individuals rose 0.02% (+4.8k) to 21.56 million over the same period. The combination helped to drive the employment rate 0.2 points lower to 61.6%. Roughly 2 in 5 working-age adults are unemployed or not in the market for work—a relatively high level considering Canada is the youngest G7 country.
Over the past year, the labor force has added 632k people to reach 21.56 million people. During that period, the economy added 430k jobs to hit 20.31 million. Failing to keep up with growth is creating a lot of unemployment, an issue obfuscated by the rate.
Canada Has Nearly 20% More Unemployed People Than Last Year
Canada has seen the unemployment rate rise significantly over the past year. The unemployment rate hit 5.8% in December, rising five of the past seven months. Since April, it has added 0.8 points, the same increase observed over the past year.
Unemployment is low as a rate, at least from a historical perspective—but it’s still a lot of people. Unemployed individuals hit 1.2 million people in December, up 19.3% (+202k people) from last year. Before the pandemic, August 2019 was the last time the rate reached 5.8%, and it did so with 70.8k fewer unemployed workers. It may not register much as a rate, but a lot of people are searching for work. That’s problematic, especially when GDP is refusing to budge.
Unemployed Canadians Surpass Pre-Pandemic Levels
The number of Canadians considered unemployed (“ready, able, and looking for work”).
Source: Statistics Canada; Better Dwelling.
In addition, Canada’s unemployment data also fails to capture rising stress among international students. The immigration minister has stated these students fulfill an essential role in labor demand, attracting students looking to study and work. However, this demographic never counts towards the unemployed count—only those employed.
The problem of excluding these students is more apparent after a recent policy extension. At the end of December, a measure that allowed international students to work more than 20 hours was supposed to expire. It was extended after criticism regarding the inability of students to afford to study without working more than 20 hours alongside classes.
It’s easy to dismiss the data from a high level by looking at the rate. However, clear problems are building up. Methodology and rates can conceal the extent of the issue, but mounting liabilities are still liabilities the economy will face.
