Alberta’s unemployment rate highest since ’94

Alberta’s monthly unemployment rate surged to its highest level in nearly 22 years in July, marking the first time the province has posted a worse jobless rate than Nova Scotia, Statistics Canada said Friday.

The provincial rate rose to 8.6 per cent — the highest since September 1994 — from 7.9 per cent in June as more unemployed Albertans searched for work. That exceeded the 8.4 per cent July unemployment rate in Nova Scotia, the first time Alberta has had a higher rate since the federal agency started collecting the data in 1976.

“This isn’t entirely a bad news story, but it’s largely a bad news story because of the upswing in Alberta,” said BMO chief economist Doug Porter, adding the province’s unemployment picture may even be worse than known.

Due to the ongoing fallout from the Fort McMurray wildfires in May that led to the evacuation of 90,000 residents, Statistics Canada said it was unable to conduct its labour force survey there in May, June and July, and had to estimate values based on nearby regions.

“The jobless numbers really speak to the prolonged drop in the global price of oil and the serious consequences that is having for Alberta’s economy and Alberta’s families,” provincial Labour Minister Christina Gray said in an interview.

She said the NDP government is committed to economic diversification and promoting job creation but won’t waver on initiatives including higher carbon taxes and increasing minimum wage despite criticism by some business groups that they will further weaken the economy.

In Calgary, the unemployment rate of 8.6 per cent was the worst among 33 Canadian metropolitan areas surveyed. Edmonton’s unemployment rate of 7.7 per cent was the sixth highest.

Alberta has lost 49,000 net jobs compared to July 2015, when the province’s jobless rate was 6.2 per cent, Statistics Canada found. Fulltime employment losses during that period total 104,000.

“It really still just has to do with the energy sector (and) the recession we’re in still grinding on,” said ATB Financial chief economist Todd Hirsch.

“We saw those oil prices, they tried to claw their way back up above $50 early in the summer, but that’s all kind of unwound itself now. So my guess is we’re going to be in for a few more months here of rising unemployment.”

Alberta’s jobless rate reached its highest level in the mid-1980s, hitting 12.4 per cent in September 1984. Hirsch said although Alberta shed jobs for the fourth consecutive month, the increase in the unemployment rate was really caused by 17,600 more people entering the jobs market — and he said displaced Fort McMurray residents looking for work in Edmonton or Calgary may have been partly responsible for that.

StatsCan reported the province lost 10,600 full-time jobs and gained 9,100 part-time jobs in July compared with June.

Despite the early summer oil price rally, the Petroleum Services Association of Canada said last week it would not change its forecast for about 1,900 oil and gas wells to be drilled in Alberta this year, down from more than 2,800 last year.

“The entire sector is suffering and the trickle-down effects are rippling out to other areas of the economy which are feeling the pinch, too,” PSAC CEO Mark Salkeld said in a statement.

“The number of petroleum services companies that have, or are in danger of, closing their doors forever is growing and the thousands of workers who lost their jobs are looking at every industry, every opportunity to find work.”

A TD Bank report released last month estimates Alberta’s economy will contract by 6.5 per cent over 2015 and 2016, making the economic downturn deeper than any going back to the early 1980s.

Nationally, the Canadian labour market lost 31,200 net jobs last month as the country experienced the biggest monthly drop in fulltime work in nearly five years.

The country’s unemployment rate crept up to 6.9 per cent, from 6.8 per cent in June.