Thursday, January 25, 2007

Study: Unemployment in Canada's metropolitan areas

Canada's 28 metropolitan areas have accounted for nearly three-quarters of the growth in employment in the country during the past seven years, according to a study published today in Perspectives on Labour and Income.

Between 2000 and 2006, employment nationally rose by just over 1.7 million. Of this total, census metropolitan areas accounted for an estimated 1.3 million, or about 73%.

During this seven-year period, employment in these large metropolitan areas increased 12.6%, compared with growth of only 9.6% in the smaller urban and rural areas in the rest of the nation.

Using the Labour Force Survey, the study compares annual average unemployment rates in the 28 census metropolitan areas (CMAs) as well as non-metropolitan areas in the 10 provinces. It also examines the relative labour market performances of these areas based on ranking of unemployment rates and duration of unemployment.

The census metropolitan area of Victoria showed the biggest improvement in unemployment rate during this seven-year period.

In 2000, Victoria had an unemployment rate of 6.7%, and was in 22nd place among the 38 CMAs and provincial non-CMA areas. By 2006, its rate had dropped to 3.7% and it had risen to third place.

The census metropolitan area of Calgary had an annual average unemployment rate of only 3.2% last year, lowest among metropolitan areas. This was half the national average of 6.3% last year, which was down from 6.8% in 2000.

Labour markets in Ontario fared the worst in terms of changes in rankings. Of the 16 areas in which rankings fell over this period, 9 were in Ontario.

The study found that at the national level, the average duration of unemployment dropped by about three weeks during this period. Declines occurred in 33 of the 38 areas examined.

Nearly all the best performers have been on the Prairies

Some areas emerged as perennial best performers, in terms of having the lowest unemployment rates in five of the seven years. Others were perennial poor performers.

Nearly all the best performers between 2000 and 2006 were on the Prairies — the exception was Victoria. These included the census metropolitan area of Calgary as well as the regions of both Alberta and Manitoba that were outside metropolitan areas.

Alberta maintained its enviable position largely as a result of the prosperity brought on by the oil and gas industry and the increased activity in construction.

Note to readers This release is based on the report "Canada's unemployment mosaic, 2000 to 2006" in the current online edition of Perspectives on Labour and Income. Data came from the monthly Labour Force Survey, which samples about 54,000 households. A census metropolitan area (CMA) has an urban core with a population of at least 100,000 and adjacent urban or rural areas that have a high level of economic and social integration with the core. A non-CMA is a smaller urban or rural area that is not adjacent to a CMA.

The regions with the poorest performance were non-metropolitan areas of Newfoundland and Labrador, Prince Edward Island, non-metro areas of both Nova Scotia and New Brunswick, and the CMA of Windsor.

Windsor has been especially hard hit by setbacks in manufacturing in general and the auto industry in particular. In 2000, Windsor's average annual unemployment rate was 5.4%; by last year, it had climbed to 9.0%, well above the national average.

The highest rates among the areas considered in this study were recorded in non-metropolitan areas of Newfoundland and Labrador, where the average unemployment rate fell marginally during this seven-year period from 21.3% to 19.3%.

Unemployment rate rose in 8 of 28 metropolitan areas

The unemployment rate last year was lower than in 2000 in a substantial majority of CMAs and non-CMA areas. It was the opposite case in 8 of the 28 census metropolitan areas.

Ontario accounted for seven of these eight metro areas: Oshawa, Toronto, Hamilton, St. Catharines–Niagara, London, Windsor and Thunder Bay. The eighth was the CMA of Montréal. Unemployment rates rose in all of them between 2000 and 2006.

Ontario has been hit hard by reduced activity in manufacturing, high energy costs and reduced exports, due in part to the appreciating Canadian dollar.

The situation was similar for manufacturing industries in Montréal, where the unemployment rate rose from 7.8% in 2000 to 8.4% last year. Particularly hard-hit were its aerospace industry as well as the clothing and textile industry. Unemployment rose 19% in Montréal during this period.

Of the five census metropolitan areas that recorded the largest drops in ranking between 2000 and 2006, four were in Ontario's so-called Golden Horseshoe: Oshawa, Hamilton, Toronto and Windsor. The fifth was Regina.

In contrast, four of the five areas with the best improvement in rankings were in British Columbia. The province's labour market has benefited from gains in resource-based industries, construction and transportation, and in increased exports to the Far East, mainly China.

Average unemployment duration falls in most CMAs

The average duration of unemployment, that is, the number of weeks of continuous job searching, is one measure of the degree of difficulty faced by people looking for work.

Unlike trends in the unemployment rate, a positive picture emerges from the duration of average unemployment.

The study found that at the national level, the average duration of unemployment fell by about three weeks between 2000 and 2006, from 19.8 weeks to 16.7. Declines occurred in 33 of the 38 areas examined.

Eight areas registered a higher unemployment rate in 2006. But only five had a higher average duration of unemployment: Prince Edward Island, Saguenay, Oshawa, non-metropolitan Alberta and Victoria.

Except for Oshawa, all areas in Ontario had shorter durations in 2006. The rise in duration in Victoria is intriguing since this CMA was among those registering the best improvement in unemployment rate.

In addition, the degree of dispersion tightened. For example, in 2000, the average duration of unemployment ranged from just over 12 weeks in Edmonton to 33 weeks in Trois-Rivières.

By last year, it ranged from around 8 weeks in Edmonton to about 22 weeks in Saguenay, Trois-Rivières and Montréal.

Definitions, data sources and methods: survey number 3701.

The article "Canada's unemployment mosaic, 2000 to 2006" is now available in the January 2007 online edition of Perspectives on Labour and Income, Vol. 8, no. 1 (75-001-XWE, free) from the Publications module of our website.

For more information or to enquire about the concepts, methods or data quality of this release, contact Ted Wannell (613-951-3546; ted.wannell@statcan.ca), Labour and Household Surveys Analysis Division.

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