Study: Hires and layoffs in Canada's economic regions: Experimental estimates, 2003 to 2013
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Released: 2016-06-27
Paid employment in Canada held steady at 13.2 million from 2009 to 2010, but that figure masks the dynamic nature of Canada's labour market. For example, from January 2009 to January 2010, 2.4 million individuals were hired and 0.9 million individuals were laid off in the country.
A new study reveals that every year the number of hires and layoffs in Canada far exceeds the net change in employment. The study provides experimental estimates of hiring rates and layoff rates at the national, provincial/territorial and sub-provincial levels over the 2003-to-2013 period. Particular emphasis is placed on hiring and layoff rates within 69 economic regions across the country.
Hires and layoffs are sizeable relative to net employment growth
Regardless of general economic conditions, a large number of workers are reallocated each year. From 2003 to 2013, an average of 2.7 million employees aged 18 to 64 were hired each year, while close to 0.8 million were laid off. These worker flows far exceeded the annual net change in employment, which averaged about 170,000 during that period.
At the national level, 5.8% of employees aged 18 to 64 were laid off and 20.2% were hired on average each year over the 2003-to-2013 period.
Chart 1
Hires, layoffs and net employment change, national averages, 2003 to 2013
Layoff rates differ across provinces more than hiring rates
Layoff rates varied across provinces to a greater extent than hiring rates. For instance, annual layoff rates in Newfoundland and Labrador averaged 15.7% over the reference period—more than three times the rates in Alberta (5.1%), Saskatchewan (4.9%), Ontario (4.7%) and Manitoba (4.4%). In contrast, average annual hiring rates in Newfoundland and Labrador were slightly higher than those in Saskatchewan and almost identical to those in Alberta.
Chart 2
Hiring rates and layoff rates for employees aged 18 to 64, by province and territory, averages, 2003 to 2013
Economic regions with relatively high layoff rates do not necessarily have low hiring rates
Layoff rates also varied substantially across the 69 economic regions. Over the 2003-to-2013 period, average annual layoff rates ranged from 3.9% in Ottawa to 25.4% in the economic region of South Coast–Burin Peninsula and Notre Dame–Central Bonavista Bay in Newfoundland and Labrador. The proportion of employees in temporary jobs in a given region was a fairly good predictor of layoff rates, accounting for three-quarters of the variation in average layoff rates observed across economic regions during that period.
Average annual hiring rates ranged from 17.0% in the economic region of Interlake in Manitoba to 30.5% in Alberta's economic region of Wood Buffalo–Cold Lake.
Some economic regions had both relatively high hiring rates and relatively high layoff rates. Over the reference period, hiring rates averaged over 22.0% and layoff rates averaged over 11.0% in 10 economic regions, most of them located in the Atlantic provinces or in northern or eastern Quebec.
Dynamic labour markets in some economic regions resulted in relatively high hiring rates and relatively low layoff rates. For example, average hiring rates exceeded 22.0% and average layoff rates were below 5.5% in the economic region of Southwest Manitoba, and in Alberta's economic regions of Lethbridge–Medicine Hat, Camrose–Drumheller, Calgary and Edmonton.
Other economic regions displayed relatively low hiring and layoff rates. This was the case for the economic regions of Ottawa, London and Stratford–Bruce Peninsula in Ontario and the economic region of Interlake in Manitoba, where hiring rates averaged less than 18.0% and layoff rates averaged less than 5.5%.
Economic regions adjusted to the 2008-2009 recession mainly by reducing hiring rates
In most economic regions, firms adjusted to the 2008-2009 recession by reducing hiring and, to a lesser extent, by increasing layoffs. However, the magnitude of the adjustment that took place varied substantially across regions.
As the Canadian economy entered the recession, hiring rates fell more in western Canada than they did elsewhere. For instance, hiring rates fell by at least 7.0 percentage points from 2007 to 2009 in northern British Columbia, and in all economic regions of Alberta, except Lethbridge–Medicine Hat.
In contrast, all economic regions in Ontario recorded a decline in hiring rates of 4.0 percentage points or less during that period. In most economic regions in Quebec and the Atlantic provinces, hiring rates dropped by 4.5 percentage points or less.
Layoff rates increased more in western Canada and in some parts of the Atlantic provinces than they did elsewhere.
From 2007 to 2009, layoff rates increased by between 4.0 and 4.3 percentage points in Prince Edward Island, and in the economic regions of Annapolis Valley (Nova Scotia), Southern Nova Scotia and Cariboo (British Columbia). These rates increased by between 2.0 and 2.9 percentage points in most economic regions in Alberta. In contrast, they rose by less than 2.0 percentage points in most economic regions in Ontario and Quebec.
Nationwide, the hiring rate declined by 3.6 percentage points during this period, falling from 21.6% in 2007 to 18.0% in 2009, while the layoff rate increased moderately, rising from 5.3% in 2007 to 6.6% in 2009.
Chart 3
Hiring rates for employees aged 18 to 64 in selected economic regions of residence, 2003 to 2013
Note to readers
This study presents annual estimates of hiring rates and layoff rates for Canada's 69 economic regions (ERs) for the 2003-to-2013 period.
The study addresses several questions: (1) To what extent do hiring rates and layoff rates differ across Canada's ERs? (2) What is the profile of ERs that display relatively low or relatively high layoff rates? (3) To what extent did the 2008-2009 recession affect hiring rates and layoff rates in various ERs? The study uses data from the Canadian Employer–Employee Dynamics Database and the Labour Force Survey to examine these issues.
The study covers employees who were aged 18 to 64. Employees are defined as individuals with wages and salaries but no self-employment income in a given year. Incorporated self-employed individuals are excluded.
Hiring rate: the number of employees hired in year t and still with their new employer in year t+1, as a percentage of average annual paid employment in year t and year t-1.
Layoff rate: the number of employees laid off from a firm in year t and not returning to that firm in year t+1, as a percentage of average annual paid employment in year t and year t-1.
Employee separations for other reasons, such as quitting or retiring, are not documented in the study.
Products
The research article, "Hires and Layoffs in Canada's Economic Regions: Experimental Estimates, 2003 to 2013," which is part of Economic Insights (11-626-X), is now available from the Browse by key resource module of our website, under Publications.
A more detailed technical report, "Hiring and Layoff Rates by Economic Region of Residence: Data Quality, Concepts and Methods," part of Analytical Studies: Methods and References (11-633-X), is also available from the Browse by key resource module of our website, under Publications.
Contact information
For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca).
To enquire about the concepts, methods or data quality of this release, contact René Morissette (613-951-3608; rene.morissette@canada.ca), Social Analysis and Modelling Division.
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