Canada loses 70,600 jobs in a month, most since 1982: unemployment 6.3 per centDecember 5, 2008 - 3:17 pm
By: Julian Beltrame, THE CANADIAN PRESS
OTTAWA - Canada lost almost 71,000 jobs last month - the worst single-month drop in a quarter-century - with Ontario emerging as ground zero of the growing economic crisis.
Ontario shed 66,000 workers - 42,000 of them in factory jobs - pushing the province's unemployment rate up six-tenths of a point to 7.1 per cent in November - tied with Quebec and above the national average of 6.3 per cent.
Finance Minister Jim Flaherty, who represents an Oshawa, Ont.-area riding heavily dependent on the auto industry, called it a "devastating occurrence."
The minister said the Conservative government - which has been under fire for its handling of the downturn - already has programs to help displaced workers and he promised new measures on Jan. 27, when he is scheduled to bring down a budget.
"Between now and then, we will work and consult with business leaders, labour representatives, the opposition and our international partners to take the necessary, prudent action to protect the Canadian economy," he said in a statement.
Liberal finance critic Scott Brison called the response "pathetic," urging Prime Minister Stephen Harper to call back Parliament, which was shut down on Thursday at Harper's request until Jan. 26.
"Seventy thousand Canadian workers lost their jobs and every one is wondering why Stephen Harper shot down Parliament instead of providing a real plan to Canadians," Brison said.
Canadian Auto Workers economist Jim Stanford was also critical of the parliamentary time out, called by Harper to avoid defeat of his minority government at the hands of the Liberals, New Democrats and Bloc Quebecois.
Stanford predicted November's job losses will look like small change compared what will happen if Ottawa lets the auto industry unravel for the next seven weeks.
"We needed a powerful, immediate stimulus program from the federal government two months ago," Stanford said.
The Conservatives' position is that they provided stimulus through tax cuts announced in October 2007, which will gradually phase in over the next few years, and through measures to bolster the commercial banks' ability to continue lending to their clients.
TThe November job losses, coupled with a Washington report showing the United States cut 533,000 workers in November, leave "no doubt that the Canadian economy is in recession and the U.S. contraction is accelerating," said BMO Capital Markets chief economist Sherry Cooper.
The Toronto stock market and the Canadian dollar fell heavily Friday morning, with the currency touching a new four-year low, but both rallied late in the day on a positive note.
With Parliament in recess, economists are looking to the Bank of Canada to bolster activity by making deep cuts to interest rates at its scheduled announcement next week.
Scotia Capital economist Derek Holt said the central bank was already on track to cut its key rate by half a point to 1.75 per cent on Tuesday, but given the darkening outlook might move to 1.5 per cent. Either rate would be an all-time Canadian low.
While the one-month plunge in jobs was the worst in 26 years, as a proportion of the market it was the ninth-worst since the 1982 recession.
Overall, the Canadian jobless rate edged up to 6.3 per cent from 6.2 per cent in October.
As bad as the Canadian figures were, the accelerating deterioration of the U.S. labour market was as worrying to economists since Canada's exporters are counting on a U.S. recovery to create a market for their products. But the figures indicate the year-old American recession is deepening.
November's carnage brings to 1.9 million the number of U.S. jobs that have disappeared in 2008 - 1.25 million in the past three months.
"The real question is whether the economy is in a recession or depression," commented Peter Morici, a business professor at the University of Maryland.
Canada too is almost certainly in recession after 17 years of expansion, with little growth in the first three quarters of this year and a tumble of more than one per cent widely projected for the current quarter.
Falling commodity prices and slumping U.S. housing and auto sectors have dealt a blow to the forestry, mining and manufacturing sectors. And with oil more than US$100 off its summer high, even the oilpatch is feeling the chill.
As long as the U.S. remains in a slump, Canadian factories will struggle, said Jayson Myers of Canadian Manufacturers and Exporters.
"What's happening is companies are working off the orders they have but new orders have really plummeted," Myers said.
"What we're seeing is temporary layoffs, and we're seeing an increasing rate of closures - and those are permanent job losses."
The Liberal-NDP coalition, which will get another chance to unseat the Conservatives when Parliament resumes, has called for billions of dollars in immediate spending on infrastructure and the troubled auto and forestry sectors.
While many economists had anticipated that Canada's relatively robust labour market would start showing symptoms of malaise, the consensus expectation was for a 20,000 contraction last month, and even the most pessimistic had projected no more than 50,000.
November's loss of 70,600 cut deeply into the job creation record for the year, bringing the accumulated gain to 133,000, well below's last year's 361,000 January-November improvement.
The loss in factory jobs brings the decline in manufacturing to 388,000 since the peak in 2002.
The other major employment drop came in public administration, with the layoff of 27,000 temporary workers helping to run the Oct. 14 federal election.
The weaker labour market has yet to be reflected in wages, however, which remained 4.6 per cent higher in than a year earlier, well ahead of the current 2.6 per cent inflation rate.
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