Highlights of the ‘State of the West’ – Employment Report

The historically high labour market participation rate in Alberta is unique within
Canada.

The unemployment rate in the West is the lowest in a generation. Today, labour
shortages are a major concern. This stands in stark contrast to years past—the early to mid-
1990s for example—when high unemployment was a top concern of politicians and other policymakers.

Services producing industries are responsible for 3 out of every 4 jobs in the West
and Canada as a whole. Compared to BC and Manitoba, a larger proportion of people make a
living in the goods producing sectors in Alberta and Saskatchewan.
Just as services producing sectors provide the majority of jobs, these sectors have
been responsible for most of the new jobs created. In the West, services producing industries
accounted for 80.6% of new jobs. Outside the West, the services sector was responsible for
all job growth.

The changes taking place in western Canada’s agricultural and rural communities
are noticeable in changes to the workforce. For example, employment in the agriculture
sector has dropped considerably in the past 30 years. This trend is particularly evident in
Saskatchewan.

Western Canada’s workforce is better educated than ever before. At the same
time as the proportion of the workforce with post-secondary education has increased, the
proportion with less than high school has declined.

Alberta’s traditionally high labour force participation
rate—the highest in Canada—sets it apart from the other
western provinces and the rest of the country. The 1970s
were characterized by the entry of more women into the job
market, leading to a marked increase in the percentage of
working-age women in the labour force.

Shifting demographics will have an impact on future
labour force participation rates. As the population ages and
more workers retire and exit the labour force, participation
rates will likely fall.

Provincial unemployment rates in the West are the
lowest in a generation. For the majority of the past decade,
BC stood out with an unemployment rate consistently
higher than the rest of the West. However, since 2002, BC’s
unemployment rate has plummeted. Saskatchewan’s rate
of unemployment has traditionally been lower than the
Canadian average. This lower rate is due in part to outmigration
of people to other provinces. Alberta, which has
arguably reached full employment, had the strongest job
growth record in the region since 1995 (see Figure 9.3).
Between 1995 and 2007, Alberta’s average annual percent
change in employment was 3.1%, compared to 2.0% in BC,
0.8% in Saskatchewan, 1.2% in Manitoba, and 1.9% in the rest
of the country. Alberta was responsible for one-quarter of all
the new jobs in Canada in 2006 and 2007.

Three in four Canadians are employed in the broad
services producing sector. The same holds true for the
West, although a slightly larger proportion of workers in
Alberta and Saskatchewan are in goods producing sectors
compared to BC and Manitoba. Industry employment as
a percentage of total employment differs significantly from
province to province. This is especially true for industries in
the goods producing sector. Manufacturing is relatively more
important to Manitoba than to the other western provinces.
Saskatchewan has the largest share of employment in
agriculture while Alberta has the largest share in mining and
oil and gas extraction.


There have been some big changes in the employment
picture over time. In general, growth in total employment
from 1990 to 2007 was driven by gains in the services
producing sectors. In the West, 80.6% of job gains were in
service industries. For the rest of Canada, all job gains were
due to service industries—employment in goods producing
sectors contracted between 1990 and 2007. Outside the
West, particularly Ontario and Quebec, the decline in the
relative importance of the goods producing sector is largely
due to manufacturing. East of Manitoba, there were 100,000
less manufacturing jobs in 2007 than 1990; construction was
the only goods producing industry in which employment
increased. In the West however, manufacturing sector
employment expanded between 1990 and 2007.

From 1990 to 2007, total employment increased 39.9%
in the West compared to 24.4% in the rest of Canada.
However, the overall numbers for the West mask large
variations between provinces. The percentage increase in
total employment in was much higher in Alberta (53.5%) and
BC (45.3%) than in Saskatchewan (10.5%) and Manitoba
(16.1%).


Employment in agriculture declined from 1990 to 2007
with only BC posting a gain in this area. Alberta stands
out with strong employment gains in its goods producing
sector. These gains were driven by huge increases in
employment in construction and mining and oil and gas
extraction. Both Alberta and BC witnessed tremendous
gains in several services producing sectors. Construction
was also an important source of employment growth for
BC. On the other hand, BC’s important forestry sector has
suffered losses. In Saskatchewan, losses in agriculture were
counterbalanced by increases in mining and oil and gas
extraction, construction, and several industries in the services
producing sectors. Manitoba’s health care and social services
industries were responsible for over 25% of total employment
gains in that province.

Technological advancement and the increasing
importance of knowledge-based industries have contributed
to the need for a more educated workforce. The period from
1990 to 2007 saw a divergence of the proportion of total
employment that is highly educated from the proportion that
is less educated. In the West, the percentage of employed
people that have completed post-secondary education
increased from 39.8% to 53.5%. Post-secondary in this
context includes certificates or diplomas as well as university
degrees. In contrast, the proportion of workers with less than
high school fell from 23.9% to 13.4%.

This trend is likely to continue. Industries and
occupations that require highly skilled and highly educated
workers continue to gain prominence within the Canadian
economy. Demographic changes will also play a part, as older
workers are replaced by younger workers who are, on average,
better educated.

Alberta’s labour market has stood out, not just
in the West, but all Canada, for a number of reasons.
Employment growth in Alberta in recent years has been
unrivaled—it alone was responsible for one-quarter of
all new jobs in Canada in 2006 and 2007. Moreover,
Alberta’s traditionally high labour force participation
rate—the highest in Canada—sets it apart from the other
western provinces and the rest of the country.