The statistics raise questions about whether the most recent unemployment figures are a temporary fluctuation in Canada's economy or a warning sign of worsening employment and economic conditions.Economic RamificationsGordon Betcherman, a professor emeritus with the School of International Development and Global Studies at the University of Ottawa, says the latest unemployment numbers indicate that the "post-COVID boom" of low unemployment has ended due to the Bank of Canada raising interest rates and the economy slowing down.
"We're now coming more back into the [unemployment] zone which is more typical of sort of a Canadian experience over the last few decades," he said.
Betchermen said Canada's unemployment rate was the lowest in "decades" coming out of the pandemic due to super-low interest rates, low population and labour force growth, and pent-up demand following the pandemic, which led to strong job creation.
Canada's population has been growing quite rapidly not due to high birth rates but to immigration, Betchermen said, adding that the labour market is having trouble absorbing the newcomers entering the workforce, leading to higher unemployment.
Dias agrees, also noting that Canada's GDP per capita and consumption per capita have remained stagnant for several years, which is a tell-tale sign of a recession.
He said that this, combined with higher unemployment numbers, indicates that Canada does not have a "healthy" labour market.
"Up until this year, you could have said 'the economy is not doing that bad, employment growth is strong.' Now, when you're seeing employment numbers really fall off like this, then that becomes very hard to argue," he said.
Employment in Alberta rose by 13,000, or 0.5 percent, while the unemployment rate increased by 0.6 percentage points to 7.7 percent, due to more people searching for work.
Nova Scotia also saw job gains, with 5,000 new jobs, or a 1 percent rise, as did Manitoba, with 4,4000 new jobs, or a 0.6 percent rise. Prince Edward Island saw 900 new jobs, or a 1 percent rise.
Newfoundland and Labrador was the only province to experience a decline in employment in August compared to the month prior, with 2,400 jobs lost, or a decline of 1 percent. Both Quebec and Ontario saw little employment change.
Compared to a year ago, the biggest unemployment rate increases were in Windsor (rising from 6 percent in August 2023 to 9.2 percent in August 2024), Oshawa (from 5.3 percent to 7.8 percent), and Edmonton (from 6.2 percent to 8.6 percent).
The unemployment rate in August rose among men aged 25 to 54 and men aged 55 and older, both experiencing an increase of 0.4 percentage points to 5.7 percent and 5.5 percent respectively. There was little change in unemployment for other demographic groups over that month.
Steven Tobin, an expert in labour market and social policy at the C.D. Howe Institute, says these full-time and part-time numbers tend to "fluctuate from month to month" and suggests the August uptick in part-time jobs was due to more students who had been working full-time returning to school and switching to part-time work.
The federal government plans to refuse temporary foreign worker applications in the low-wage stream in metropolitan areas that have an unemployment rate of 6 percent or higher. It's also capping at 10 percent the foreign workers part of a total workforce that can be hired through the program's low-wage stream.
Dias said that while these reductions would eventually modify the unemployment rate, the impact would be minor and the "damage is already done."
Tobin said Canada's increased immigration rate has impacted the overall unemployment numbers "to some degree." He said August's unemployment numbers rose despite a positive job growth rate because more people were seeking work, "part of which is a result of population and labour force growth stemming from increased levels of immigration."
It's "hard to predict" how these changes would impact the labour market, but it would "take some time before they are felt in the job market," said Tobin.