Canada just shed over 71,000 jobs in November. Not only is this tumble in employment the most significant loss since 2009, but it also comes as a shock. The Bank of Canada has consistently emphasized healthy rises in employment rates and a sound economy.
However, despite the assurances, it seems Canada may be facing a new set of issues with the private sector looking to cut costs.
Bank of Montreal has just shed 2,300 positions in Canada and abroad because of slow growth. Scotiabank and the Royal Bank of Canada have also reported slow growth in earnings. For the Bank of Montreal, layoffs have affected 5% of its workforce.
In Alberta, 18,000 people lost jobs. Husky Energy laid off hundreds of staff, which most employees believe is due to a “politically beleaguered industry.”
The goods-producing industry shed more than 26,000 positions — natural resources down 6,500 jobs. In manufacturing, 27,000 jobs. There were 44,000 jobs shed in the service-producing industry.
November hasn't been the only month that suffered declines. In August of this year, the Spanish energy giant, Repsol, laid off 30% of its Canadian workers in locations within Chauvin and Edson, Alberta.
The Bank of Canada has been adjusting monetary policy on the premise that the Canadian economy is resilient. And while many countries have responded to the economy with reducing overnight lending rates, Bank of Canada has held firm.
However, it appears the BOC may not have been abreast of the Canadian economy when it made its statements. These new numbers may signal trouble.
And if we look back farther, October numbers were also weaker than expected.
Simply put, something is amiss in Canada since the employment report has shown the exact opposite of what was expected which was the creation of 10,000 jobs in November. Instead it lost 71,000. By contrast, in the United States, hourly earnings rose, and it created 266,000 new jobs.
Overall, the economic numbers for the US have been positive and unfortunately, have inadvertently highlighted Canada’s current weaknesses.
We should now expect the Bank of Canada to cut rates and act according to the reality that presents itself.
Sarah A. Colucci