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Canada’s job picture improved in 2007. The unemployment rate—the percentage of Canadians looking for work—averaged 6.0% over the 12 months of 2007, the lowest average annual rate in 33 years.

The number of working Canadians rose 2.3% in 2007, a net increase of 382,000 jobs. It was Canada’s fifteenth consecutive year of job growth. More than three-quarters of the newly created jobs were full time. Half of the new jobs were held by older workers (aged 55 and older), who accounted for 30% of the working-age population.

The employment growth rate of 2.3% far surpassed that of the United States, which saw employment rise by 0.8% in 2007. Historically, Canada’s unemployment rate has been higher than that of the United States.

For people unable to find work, the time spent unemployed in 2007 was the shortest since 1976: an average of 14.0 weeks.

Still, the brightening prospects for work did not seem to lure more people to the job market. In 2007, the annual average labour force participation rate—the proportion of working-age Canadians who had a job or were looking for one—was 67.6%, up slightly from 67.2% in 2006.

Several regions and industries continued to experience labour shortages, primarily the result of the strong national economy. Atlantic Canada had shortages for the first time in decades: more than 12% of employers reported having trouble finding skilled labour.

Jobs: Provincial variation

Every province recorded higher employment in 2007, for the first time since 2004. Alberta continued its job expansion, though not at such a fast pace as the year before. In 2007, Alberta’s workforce grew by a nation-leading 4.7%, compared with a 4.8% rise in 2006.

The gains were again fuelled by job growth in natural resources, construction and a number of service-producing industries.

British Columbia posted the second-highest employment gain, 3.2%. Quebec also saw above-average job growth, at 2.3%, thanks to construction; utilities; accommodation and food services; and ‘other services’ that offset declines in manufacturing employment. Among the provinces with below-average job growth was Ontario, at 1.6% in 2007, partly because of losses in manufacturing.

Job changes by sector

Several sectors saw dramatic gains in employment in 2007, including utilities, up 13.1% from the end of 2006; mining, oil and gas, 5.9%; accomodation and food services, up 5.4%; and construction, up 6.0%.

But the labour market news was not good for all industries: some continued to struggle. Manufacturing, for example, lost 3.4% of its workforce in 2007, after shedding 4.1% of jobs in 2006. The sector’s job losses were partly blamed on the higher Canadian dollar, rising energy costs and tougher competition from other countries. From November 2002 to December 2007, manufacturing jobs declined by 347,000, or 14.9% of the previous total workforce.

Other sectors that saw employment shrink in 2007 included agriculture (down 2.7% from 2006) and fishing, hunting, and trapping, (down 9.1%).

Older workers fared better

The employment situation improved for most demographic groups in 2007, measured by comparing the 12-month annual average for 2007 with that for 2006. Among them were workers aged 55 and older, whose employment rose by a revised 7.1%, more than triple the national average growth, 2.3%. Employment increased 2.1% for youth (those aged 15 to 24).

Women also fared well, as their unemployment rate fell 0.5 percentage points, to 5.6%. The unemployment rate for Aboriginal people living off-reserve in Western Canada was 9.5% in 2007, down from 12.2% in 2005. Employment rates for immigrants who arrived in Canada within the past five years remained stable in 2007, but increased slightly for immigrants who had arrived more than five years ago.

A changing labour market

The 2006 Census reveals interesting changes in Canada’s labour market since the 2001 Census. For example, Canada’s employment growth averaged 1.7% in each of the five years, higher than the average among members of the Group of Seven (G7).

There was a shift in employment away from manufacturing (which shed an average of 1.4% of its jobs each year between censuses) and toward mining and oil and gas extraction (which grew an average of 7.5% a year), construction (4.5%), and retail trade (1.8%), among others.

There were corresponding changes in occupations. For example, there were drops in manufacturing-related occupations, such as sewing machine operators (whose ranks decreased by 32.7% from 2001 to 2006) and metal fabricators, including steelworkers (whose numbers fell by 34.4%). Meanwhile, occupations in the expanding construction industry formed one of the fastest-growing categories, as the number of trades helpers and labourers jumped by 57.2% from 2001 to 2006.

An increase in the percentage of foreign-born people living in Canada was reflected in the labour market, which saw the proportion of immigrants rise from 19.9% of workers in 2001 to 21.2% in 2006.

Employee earnings have changed little. The 2006 Census found that the median earnings of Canadians working full-time for a full year was $41,401 in 2005, compared with $41,348 in 1980 (in 2005 constant dollars).

Shift in hours

Recent years have seen the continuation of a 30-year shift—the average weekly hours worked by full-time employees has steadily dropped, while those worked by part-timers has increased.

A dwindling number of people are working part-time jobs because they can’t find full-time work—another sign of a hot labour market. In 2007, fewer than one-third of part-time workers did so because of poor economic conditions.

Wage growth gallops

The booming economy and labour shortages saw wages recording their fastest growth in 2007 in a decade. For employees on payroll, average weekly earnings rose 3.2% to $771 for all industries. The average hourly wage in 2007 was $18.80, a 6.0% rise in real terms from $17.68 (in 2002 dollars) in 1997.

In the private sector, managers saw the greatest wage growth since the late 1990s. Their average hourly wages grew 20% from 1997/1998 to 2006/2007, compared with 5% for other private sector employees. Blue-collar workers in manufacturing, clerical employees and salespersons in retail trade (accounting for 26% of private sector employment in 2006/2007) saw virtually no wage growth.