With 54,700 new positions, the Canadian economy added twice as many jobs as expected in December, while the unemployment rate hit a 22-month low of 5.9% from 6.0% in November.
Full-time jobs surged by 1,23,000, as many part-time workers shifted to more permanent employment. Employment increased in Ontario and Saskatchewan, while it declined in Newfoundland and Labrador.
Most of this year’s gains are expected to be driven by newcomers to the country.
After declining due to international travel restrictions, the number of very recent immigrants in Canada has recovered to its pre-pandemic level in recent months.
Very recent immigrants are those who arrived in Canada within the last five years.
According to Statistics Canada’s Labour Force Survey, in December, the total number of very recent immigrants of core working age (25 to 54 years), who are most likely to participate in the labour market, was 0.6% (+5,000) higher than two years earlier.
Employment gains were largest in professional, scientific, and technical services (up 26,000 jobs, 31.3%) as well as wholesale and retail trade (up 20,000 jobs, 28.7%).
According to Statscan, this reflects the role that both higher-skilled and lower-skilled employment plays in the integration of newcomers into the labour market.
Professional, scientific, and technical services tend to be “high-skilled” jobs according to the National Occupational Classification (NOC), whereas retail trade jobs like cashiers fall under “low skilled”.
Canada’s main immigration pathway, Express Entry, focuses on admitting high-skilled workers. While there are pathways for low-skilled workers, in some Provincial Nominee Programs, for instance, there are still more economic immigrants coming to Canada as high-skilled workers.
For immigrants who landed more than five years ago, employment rates among the core-aged group were almost 83% in December.
After meeting the 2021 target of 401,000 new permanent residents, Prime Minister Justin Trudeau's administration is set to revise next year's target of 411,000.
Canada’s job market capped a strong 2021 with the addition of 54,700 net new jobs, bringing the total number of new Canadian jobs last year to around 868,000.
After losing three million jobs at the start of the pandemic, employment in Canada is now 240,500 above where it was in February 2020.
December was the seventh straight month of job growth in Canada. The number of net new full-time jobs increased by 123,000, as many part-time workers transitioned to more secure employment — a sign of confidence among employers. Indeed, full-time employment in Canada has trended up since June. Part-time employment fell by 68,000 in December.
The Canadian unemployment rate now stands at 5.9 per cent, edging ever closer to the 5.7 rates of February 2020, right before the COVID-19 pandemic ravaged Canada’s economy (and much more besides).
While the latest round of Canadian job growth again exceeded economists’ expectations, it comes with strings attached. Statistics Canada compiled the figures through the week of December 5 to 11, before Canada witnessed a wave of COVID-19 cases. The impact of fresh, Omicron-led restrictions on movement and economic activity is therefore likely to weigh on January’s numbers.
“With daily caseloads rising at an incredible pace and provinces tightening the screws on mobility, January labour market figures are likely to be more downbeat,” wrote TD Bank senior economist Sri Thanabalasingam in a report.
“Hopefully, the impact of Omicron will be short-lived, allowing the labour market to recover quickly in coming months.”
A strong finish to 2021
Two provinces — Ontario and Saskatchewan — made up almost all of December’s job gains, while the job market was steady just about everywhere else.
There were around 27,100 net new construction jobs in December, the first increase since August as the sector edges back to pre-pandemic employment levels.
Educational services and manufacturing also posted strong job gains.
Average hourly wages were up 2.7 per cent year-over-year.
Canada’s job market for newcomers in 2022
Even though a slowdown is inevitable as Canada (hopefully) exits the Omicron wave this winter, economists are still anticipating a strong 2022, with the Canadian unemployment rate expected to hang below 6 per cent for much of the year.
When Omicron dissipates, we can expect hiring to ramp up. Indeed, Statistics Canada estimates that there were around one million job vacancies close to the end of 2021.
In that report, StatsCan noted ‘The record-high job vacancies observed in recent months has focused attention on the extent to which unmet labour demand will contribute to upward pressure on wages.’
Wages are expected to continue climbing, particularly in more skilled professional occupations. In an age of creeping inflation, wage growth is good news for workers.
The newcomer advantage
The bulk of 2022’s job gains will be driven by newcomers to Canada, rather than the pandemic unemployed returning to the workforce. The federal government again plans to increase immigration levels this year to record highs. Employment of native-born Canadians has been flat for almost a decade as newcomers grab a bigger slice of Canada’s job market.
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