Friday, July 09, 2010

Canada Recovers Almost All Jobs Lost in Recession


Statistics Canada -- "Employment rose by 93,000 in June, pushing the unemployment rate down 0.2 percentage points to 7.9%. This is the first time the rate has been below the 8% mark since January 2009.  Employment has been on an upward trend since July 2009, increasing by 403,000 (+2.4%). These gains offset nearly all the employment losses observed during the labour market downturn which began in the fall of 2008. The June unemployment rate, however, remained well above the October 2008 rate of 6.2%, due to a large increase in the number of people in the labour force over this period."

19 Comments:

At 7/09/2010 3:01 PM, Blogger Dr William J McKibbin said...

Interesting -- we need to keep an eye on the Canadian experience in the coming months...

 
At 7/09/2010 3:03 PM, Blogger Bill said...

Canada led by Conservative Prime Minister, Stephen Harper.

USA led by leftist President Barack Obama.

Canada in full recovery while US in subpar sputtering recovery.

Coincidence?

 
At 7/09/2010 4:38 PM, Blogger Craig said...

A Conservative Prime Minister who just happens to be an economist, presumably not of the Keynesian persuasion either.

 
At 7/09/2010 6:43 PM, Blogger Jason said...

Canada is a socialist country (or at least really close). So they have many of the same issues we have: Anchor class, ridiculous entitlements, a strong union movement.

However, their economy is fueled by commodities. As long as commodities prices are high, Canada's economy will continue to expand. If things implode in Europe or America, they will be in the dumps very quickly. But they also don't have our debt. Although, I think their unfunded liabilities situation is similar...

 
At 7/09/2010 7:41 PM, Anonymous Anonymous said...

The Canadian economy has certainly been aided by demand for commodities, but this is a very narrow perspective. Canada can no longer be seen solely as a country with an economy based on primary resources.

Approx 76% of the labour market is service based in a broad range of industries including retail, fiancial services, real estate, health care, travel/tourism, motor vehicles, industrial machinery, aircraft, information technology, telecommunications, chemicals, plastics, and fertilizers.

Canada has socialist elements within its political and economic infrastructure, but no where near the degree that we see in China or even certain parts of Europe.

Canada has also had a strong fiscal and financial policy over the last 12 years. Since the early 90's, the government had reformed several programs and social services to eliminate the countries chronic deficit. They have also restructured tax policy to promote a more business friendly environment.

Remember, it wasnt too long ago that China and Japan were dismissed as economic threats to the US. Don't under estimate the potential for any country to rise to the occasion.

 
At 7/09/2010 7:50 PM, Anonymous Anonymous said...

The couterpoint to the current Canadian recovery is the Trudeau years. That was socialism at its worst.

 
At 7/09/2010 8:06 PM, Blogger Jason said...

Anon 7:41: But Canada has a simmering immigration situation. I wonder if Canada's immigration issues are worse than America's. Depending on the news day I flip back and forth on the matter.

I would hardly say Canada is a pro-business country ala say a Singapore. Improved, probably. Windsor has lagged the rest of the Canadian economy, so there are no magic bullets in the Canadian gun when it comes to manufacturing, for instance. Stable banks help, of course.

No matter how diversified the Canadian economy or the bank situation, don't dismiss the POWER of having money flowing into a country, rather than flowing out. That is a fuel for wealth creation fire.

 
At 7/09/2010 9:14 PM, Anonymous Anonymous said...

Jason,

With regards to immigration, Canada has brings in 240,000 to 265,000 per year with a requirement that 65% have skills in 38 high-demand occupations such as health and skilled trades. In fact, Canada needs immigration to offset an aging populous.

On a side note, immigration always becomes a hot issue during troubled economic times. This issue is not new and is an issue with countries world wide.

And it has become more business friendly since the 90's. Deep business tax cuts (even in the 2010 budget), establishing more pro-business oriented policies, and making solid attempts at reducing monopolies as recently seen with its sale of wireless spectrum to 24 non-entrenched competitors. In fact, according to the 2009 IMD World Competitiveness Yearbook, Canada leads all G7 countries in ease of doing business.

Your example of Windsor cites only a small condition of a local economy facing difficult times. This is not uncommon when demand changes (ex: core Detroit). But you should examine growth in other Canadian cities, such as Toronto, to present a more holistic view.

 
At 7/09/2010 9:58 PM, Anonymous Aelric said...

They lost only about 2.3% of jobs from peak to trough. That's not much of a recession.

It's only implication for the US is the impact on our exports to Canada.

 
At 7/10/2010 2:38 AM, Blogger PeakTrader said...

With so many natural resources, and few people, why is Canada's standard of living so low?:

Canada's living standard 9th among 17 top nations: conference board
October 27, 2008

Canada's standard of living slid five spots to ninth among the world's 17 top industrialized nations in the past two decades, according to a report from the Conference Board of Canada.

Canada's per-person income is approximately $6,400 less than the U.S. average income, a gap that has doubled between 1984 and 2006.

"Lower labour productivity accounts for the largest component of the income gap between Canada and the United States," the conference board said.

"Canada needs to boost investment in resource sectors by eliminating the capital tax on businesses and removing remaining internal trade barriers, such as restrictions on interprovincial log trade in the forest sector," said board president and chief executive officer Anne Golden.

Canada received its worst marks in "innovation," where the country scored a "D."

My comment: A lack of financial innovation may explain why houses in Canada are so small compared to the U.S.

Typically, there can't be a bust without a boom. However, there can be a more stable and stagnant economy while other economies go through booms and busts.

 
At 7/10/2010 7:50 AM, Blogger juandos said...

Bill says: "USA led by leftist President Barack Obama.

Canada in full recovery while US in subpar sputtering recovery.

Coincidence?
"...

I think NOT...

You may find the following worth a read...

From the Daily Caller: Lack of jobs increasingly blamed on uncertainty created by Obama’s policies

 
At 7/10/2010 8:49 AM, Blogger Paul said...

Juandos,

That Daily Caller article was interesting. Amazing how many CEO's and billionaires who backed Obama are now recoiling in horror. My eternal question is what were they thinking in the first place? Alot of us average folks saw that nitwit for what he is when we first laid eyes on him, so why couldn't the business leaders and other elite?

 
At 7/10/2010 11:48 AM, Anonymous Canadian said...

Oh, where to start...LOL

It is a widely held view in Canada that Americans don't know nuttin' about Canada and some of the posts here certainly support that view.

There are many similarities between the two countries. Just as deficits soared during the Reagan and Bush Jr years, deficits have grown in this country during Conservative Party goverments (Mulroney, Harper). In both countries it was the other side that lowered/eliminated deficits (Clinton/Chretien).

In Canada, Harper's decision to lower the GST (value added tax) by two percent before the financial crisis solely to satisfy his conservative base has made the present deficit situation worse.

To Peak Trader I would say:GDP per capita is indeed lower in Canada....so we drive Ford Escapes instead of Hummers. We still get to where we're going. You might watch the news on a 52 inch TV while we watch on a 26 inch...but the news is still the same. Bigger houses??? good for you, me? I hate cleaning...LOL...Hey, Peak, google "HDI index"...there's more to life than the size of your car or house.

Home ownership is higher in Canada than it is in the US and owners have much more equity in their houses...and we did this whitout subsidizing home ownership through tax deductions. And Canada is the "socialist" country????? We don't even have food stamps for pete's sake....what are those for anyway??? You use 'em to mail food down there????LOL

KPMG reported that the US has some of the highest corporate taxes in the world (attention Obama bashers, the report is from 2008).
To become more competitive the US will have to lower corporate tax rates. On the other hand, some people are still demanding that the Bush tax cuts be extended. Clearly both can't happen.

The idea that cutting taxes for the "rich" would lift all people has been proven to be a hoax. Reaganomics don't work in the long term. Get over it and move on.

 
At 7/10/2010 1:00 PM, Blogger juandos said...

"The idea that cutting taxes for the "rich" would lift all people has been proven to be a hoax. Reaganomics don't work in the long term. Get over it and move on"...

Does Canadian = Keynesian?

Apparently so if that fairy tale comment is anything to go by...

"Alot of us average folks saw that nitwit for what he is when we first laid eyes on him, so why couldn't the business leaders and other elite?"...

Ahhh, the multi-trillion dollar question Paul...

I would've thought that the Joe the Plumber episode should've been lesson enough for even the most obtuse individual...

 
At 7/10/2010 3:21 PM, Blogger PeakTrader said...

Canadian:

It seems Canadian household debt is higher than U.S. household debt, although Canadians live in smaller houses, drive smaller autos, and generally consume less. Perhaps, Canadians can learn something from Reaganomics:

The Bankwatch
Asset value increases hide a rise in Canadian debt levels

"In 2009 Canadians also increased debt through mortgages and loans, with the average ratio of household debt to income at 146.2%."

Federal Reserve Bank of San Francisco
FRBSF Economic Letter
May 15, 2009

"U.S. ratio of debt to personal disposable income...reaching an all-time high of 133% in 2007...it currently stands at about 130% of disposable income."

 
At 7/10/2010 4:22 PM, Blogger PeakTrader said...

Perhaps, you should change the sentence from "(Canadian) owners have much more equity in their houses" to Canadian owners have much more debt in their houses.

 
At 7/10/2010 6:30 PM, Anonymous Aliset said...

Canada did not have a financial crisis. There is a world of difference between recessions with and without financial crises. The former are usually V shaped, the latter U or L shaped.

 
At 7/10/2010 11:37 PM, Blogger Ron H. said...

"From the Daily Caller: Lack of jobs increasingly blamed on uncertainty created by Obama’s policies"

Thanks for the interesting link, juandos, Do you suppose some of those businesses names have found that being in bed with Obama hasn't gotten them the love they expected?

Warren Meyer at Coyote Blog explains how uncertainty makes it difficult for him to plan for the future. In his evaluation spreadsheet, small changes in tax rates, health care costs, or numerous other future unknowns make all the difference between success and failure for his business, so he isn't investing or hiring.

 
At 7/11/2010 3:07 PM, Blogger juandos said...

Hey Ron H, per your link to the Coyote blog: "I am not going to risk a half million dollars on a 20-year investment when the government is considering so much legislation that will arbitrarily move the value of this investment"...

Exactly right!

I hear the samething locally...

Larry Kundlow has been telling us about buyer's remorse many in business have been feeling for over a year now...

Even CNN/Money is chiming in now:

What health care reform means for your business


Health care law's massive, hidden tax change

Yeah, this is no way to run an economy anywhere but down...

 

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