Understanding provincial workforces, participation rates
The composition of each province’s workforce differs, sometimes quite dramatically.
For example, the participation rate is a key measure of workforce characteristics in Canada. It refers to the percentage of the working-age population actively working or looking for work.
Participation rates will become increasingly important to Atlantic Canada over the next decade or so due to the expected exodus in large numbers of the baby boom generation from the workplace.
Participation rates vary by province for several reasons. An aging population will decrease the rate, as will weak economic conditions and job demand. Rates are also affected by the type of work available, and the number of full-time jobs available versus the number of seasonal jobs.
ECONOMIC HEALTH
In Canada, before the COVID-19 crisis, the participation rate was nearly 66 per cent. In April, it dipped to below 60 per cent but has since rebounded.
Within the region, Prince Edward Island (64 per cent) comes closest to matching the national rate. Newfoundland and Labrador has the lowest participation rate not only within the region but in the country, reflecting multiple economic challenges there.
These differences largely correlate with the health of the provincial economies over the last decade or so. P.E.I. has led the region in terms of economic growth over that time. It is also the only province in the region to increase the number of jobs in a meaningful way.
GENDER GAP
Historically, participation rates for males have always been higher than females, although the gap has been narrowing. In Canada, 70 per cent of working-age males were in the labour force in September, according to Statistics Canada. This compares to 61 per cent of working-age females in the labour force.
The participation rate among females has increased significantly over the last 50 years (40 per cent in 1970). Much of the difference has been related to the primary responsibility of raising children falling to females. The increasing availability of affordable child care has contributed to increasing participation rates for females, though more needs to be done in this regard.
The Island compares the best with national numbers, while Newfoundland and Labrador compares the worst in terms of participation rates for both genders. Newfoundland also has the oldest population and the weakest population growth in the country, contributing to lower participation rates.
Most of the time, when talking about employment numbers, the emphasis is on the number of those who are unemployed but included in the participation rate.
Before the pandemic, unemployment rates had been declining in concert with the continuing exit of a large number of baby boomers from the workforce. While unemployment rates have increased significantly as a consequence of the pandemic, it can be anticipated that those numbers will decline over time as the economy normalizes.
EMPLOYMENT RATE
Another way to look at the health of the economy is the employment rate in each province. It is the percentage of those currently working among all those available to work of working age, including those choosing not to work.
In Canada, the employment rate in September was 56 per cent, down from 62 per cent in February. The employment rate excludes those under 15 and over 65.
In Nova Scotia, the employment rate is currently about 56 per cent, while in New Brunswick the employment rate is 55 per cent. The Island has the highest employment rate in the region at 57 per cent, while Newfoundland has the lowest at 49 per cent.
Another way to look at it: Newfoundland has the lowest number of people in Canada working proportionately to support its provincial population.
AGING POPULATION
One of the key consequences of an aging population and slow population growth over many decades is that the region is facing a rapidly decreasing labour force.
The recent success in attracting immigrants to the region will mitigate this problem, as will the increasing ability to retain our youth in the region.
Nonetheless, there will be a need to increase the percentages for participation rates and employment rates across Atlantic Canada to bridge the gap between increasing labour demand and a declining labour force.
The two best ways to increase participation rates until population growth is sufficient to maintain the labour force are the retention of older workers and increasing the number of women in the labour force. Encouraging older workers to continue working will require flexible working arrangements, such as reduced hours, reduced work days or working during parts of the year.
Increasing female participation in the workforce will require more child-care options and perhaps work schedule flexibility, including the ability to work from home. The pandemic has paved the way for more people to do so.
The bottom line is that for the economies in Atlantic Canada to grow more in line to the national economy, annual population growth of one per cent will be required. This will lead to more job growth and an increased rate of participation in the labour force.
Canada’s recent announcement to increase the level of immigration to more than 400,000 per year for the next three years will help, as long as Atlantic Canada receives its fair share. With some planning, it may also help reduce the reliance on seasonal work for many in the region.
Don Mills is the former CEO and owner of Corporate Research Associates (now Narrative Research) and continues to be active in the business community through various investments. He remains an advocate for change in Atlantic Canada using data for such purposes.