Analysis on (Un)Employment in Canada

Photo by Nat McBride Lockwood
Photo by Nat McBride Lockwood

The most popular indicators of labour market conditions are rates measuring unemployment and employment. These expressions are repeatedly used in every type of economic media, but the common reader usually doesn’t know what exactly they mean and what their true relationship is. Let’s see how unemployment and employment rates reflect labour market conditions.

What is the labour force?

Unemployment Rate in Canada 2000  2011
Unemployment Rate in Canada
2000 - 2011

The labour force, also called the work force, is the total number of people 15 years old and up who contribute to the production of goods and services in the country. It includes those who are either employed or unemployed, but doesn’t include persons who are not working and are not available for work or persons who are not working and are not looking for work because of specified reasons (for example, housewives, students, disabled or retired persons, and seasonal workers.)

Unemployment Rates in OECD Countries in 2010
Unemployment Rates in
OECD Countries in 2010

The employment rate shows the percentage of the labour force working for pay. The unemployment rate is the ratio of the total number of unemployed persons to the total number of persons in the labour force. The sum of employed and unemployed people, therefore, isn’t the population, but the total labour force.

Why is it so important?

A major macroeconomic indicator is the unemployment rate. When the unemployment rate is high, individual financial and psychological hardship arises. People are dissatisfied, and this may lead to demonstrations and an increase in criminal activity. High unemployment causes aggregate economic output to be less than the potential GDP level.

The unemployment rate in Canada

Canada’s unemployment rate (8.0% in 2010) is under the OECD’s average, but it is much higher than the lowest international unemployment rate, that of Norway (3.5% in 2010). During the world crisis in 2008 and 2009, the rate was increasing sharply. In the first quarter of 2009, it grew incredibly — from 6.45% to 7.83%. Since the last quarter of 2009, the rate has been modestly decreasing as the labour market has been recovering from the crisis. April’s unemployment rate was 7.6%, which was better than expected.

Unemployment Rate in Alberta 2010  2011
Unemployment Rate
in Alberta 2010 - 2011

Unemployment rate in Alberta

Alberta’s labour statistics are among the most favourable in the country. In April, Alberta ranked third in the list of lowest unemployment rates with a rate of 5.7%, and its employment rate is the highest in Canada. “Moving forward, conditions still appear to be positive for the Alberta economy, and hence the labour market is likely to see further job gains over the year,” said Dan Sumner, economist with ATB Financial in Calgary.

Unemployment Rate in Alberta 2010  2011
Unemployment Rate
in Alberta 2010 - 2011


According to a separate Bloomberg economist survey, the Canadian unemployment rate won’t decline much further this year. It will average at 7.4% in the last three months of the year. The Conference Board of Canada predicted annual employment growth in the Calgary CMA of 3.0% in 2011, 3.8% in 2012, and 2.4% in 2013. In Alberta, the Board expects modest employment growth of 2.2% this year, 3.0% in 2012, and 2.2% in 2013.

This entry was posted in Calgary Real Estate News. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *