by Heather Scoffield
Fourth consecutive month of net job losses as exodus to West continues. The sucking sound of people leaving Central Canada for the plentiful and bountiful jobs in the West is about to get a lot louder, new jobs data for October suggest. The Canadian labour market ended a three-month streak of mediocrity last month, creating 50,500 new jobs, and pushing the country's unemployment rate back down to 6.2 per cent. But 70 per cent of the new jobs were in Alberta and British Columbia, while Ontario had its fourth consecutive month of net job losses -- the worst record in 13 years. So far this year, employment has risen by a strong 261,000 positions. But Ontario, which makes up about 40 per cent of the country's economy, has accounted for only 20 per cent of total job creation, economists at National Bank Financial point out. "With the U.S. economy losing momentum, things are unlikely to improve much in Quebec and Ontario, exacerbating the East-West divide in terms of economic performance," they say. Ontario's population is growing, but only because of immigration. The number of Ontarians leaving the province has surged in the past two years: Ontario lost a net 21,391 people to other provinces between July, 2005, and July, 2006, Statistics Canada data show. That's almost double the 11,172 lost the year before, and a stark contrast to the beginning of the decade, when other provinces were sending people to Ontario, on a net basis. International immigration to Ontario has slowed down too, dropping from 156,444 people in 2001-02, to about 86,000 over the past year. As a result, Ontario's population growth rate has plunged, from a gain of 17.03 people for every 1,000 living there in 2001-02 down to a gain of 10.16 per 1,000 in 2005-06.
The population in Alberta, on the other hand, is growing three times faster than the national average, at a rate of 29.5 people per 1,000 in 2005-06, Statscan says. And given the tight correlation between migration and the job market, Ontario's residents will continue to be drawn to the West for the next two years, says Dale Orr, chief economist at Global Insight (Canada). "I think it will [continue] for a couple more years, because Ontario is not going to have a very good year next year," Mr. Orr said. "And Alberta is going to keep booming for at least a couple of years." When former U.S. presidential candidate Ross Perot spoke about the "giant sucking sound of jobs being pulled out of this country" in 1992, it sent chills across the U.S. about a deteriorating economy. In contrast, the sucking sound from one region of Canada to another these days is a healthy sign that the Canadian economy is functioning efficiently, economists say. Higher wages and a demand for labour of all kinds in Alberta are sopping up the excess labour in Central Canada. "It's a good thing all around," Mr. Orr said. The manufacturing sector, anchored in Central Canada, has been the main source of weakness in the job market, while the resource boom in the West has spurred massive job creation in that region. But those trends have persisted for so long that their effects are felt well beyond the sectors alone, says Marc Pinsonneault, senior economist at National Bank Financial. In Ontario, the services side of the economy has been creating jobs while the manufacturing sector has bled, but recently, services have not been able to keep up. Particularly weak are professional services and jobs in the cultural sector, Mr. Pinsonneault said. In Alberta and British Columbia, the demand for labour has spilled over from the resource sector to cause labour shortages in almost every sector.
People stream west for work
People vote with their feet when it comes to the economy. Alberta's fortunes have boomed this decade, fuelled by high oil and gas prices and its ample supply of both. The province has attracted a huge influx of people from the rest of Canada. Ontario's economy has slowly lost momentum as its manufacturing sector struggles to deal with expensive energy costs, the high dollar and intense global competition. Only immigration keeps its population growing, since Ontarians are increasingly leaving the province for greener pastures.
Momentum slows in heartland
The wealth generated by the commodities boom has spilled over into the rest of Alberta's economy, pushing its unemployment rate down to record lows. Labour shortages are now a frequent complaint among businesses in the West, and wages are rising quickly. Ontario's unemployment rate is still quite low, because the services sector has been creating enough jobs to make up for losses on the manufacturing side. Recently, however, services has lost some of its momentum and the province has suffered net job losses for four months in a row.
INTERPROVINCIAL MIGRATION Alberta: + 57,105 Ontario: - 21, 391
UNEMPLOYMENT Alberta: 3% Ontario: 6.4%
