Posthaste: Plummeting job vacancies another sign Canada’s economy is under the gun

Fall 28% from last year back to pre-COVID levels

Article content

Job vacancies shrank to pre-pandemic levels as the ongoing decline in openings paints a picture of a labour market that is tightening and an economy that is weakening, new data from Statistics Canada suggests.

Job vacancies, which measure the number of open positions among Canadian employers, fell to 575,400, a 28 per cent drop from April 2023. At the start of 2020, vacancies stood at 582,510. It was also the third consecutive decline in 2024, the agency said in a release on Thursday.

Advertisement 2

Article content

“Canada’s payroll survey of employment showed that labour market slack continued to open up in April, as … job vacancies dropped off by 32,000,” CIBC World Markets economist Katherine Judge said in a note.

The drop in vacancies also means the number of unemployed people per job rose to 2.3 in April from 2.2 in March.

The decline in vacancies suggests that businesses are slowing the pace of hiring, likely because of the slow economy,” Charles St-Arnaud, chief economist at Alberta Central, said in an email.

Vacancies were a major point of concern as they soared to more than a million in May 2022 as the economy opened up from the pandemic. Employers found themselves unable to fill positions and were forced to hike pay as they fought to find and keep employees.

While the struggle to fill positions may be easing, the pressures of pay increases persist.

Payroll data released alongside the vacancy numbers showed that average weekly earnings rose 3.7 per cent in April from last year.

Whether employers are truly back in the driver’s seat remains to be seen.

St-Arnaud said more proof of whether that is the case will be available in the upcoming Bank of Canada Business Outlook Survey (BOS), which asks employers about their hiring intentions.

Article content

Advertisement 3

Article content

In the previous BOS, fewer businesses said they were experiencing labour shortages, which was attributed to weaker demand for and a growing supply of available workers.

Economists have been closely watching labour data for signs that the economy is fraying as Canadians pull back on spending to deal with higher interest and inflation rates that are squeezing their pocketbooks.

The most recent labour force survey (LFS) by Statistics Canada, released on June 7, said the economy added 26,700 positions in May, for a net gain during the year of a bit more than 190,000 jobs. However, the unemployment rate has steadily risen this year to 6.2 per cent, from 5.7 per cent in January, as job creation fails to keep pace with the country’s soaring population.

The labour force survey and the vacancy data are distinct because the latter does not include the agriculture sector, private employment or many self-employed positions.

Still, the drop in vacancies could start to play out in the broader market.

“It suggests we could start seeing weaker LFS employment gains in the coming months,” St-Arnaud said.

Advertisement 4

Article content


 Sign up here to get Posthaste delivered straight to your inbox.


Population chart

Canada experienced record demographic growth last year as new arrivals to the country ramped up and expanded the population by 1.3 million people, the fastest annual pace since 1957.

Now, National Bank of Canada is predicting a “demographic hangover” after Justin Trudeau’s Liberal government announced it was cutting back on the number of foreign temporary residents allowed into the country.

“Recognizing that the situation was becoming increasingly perilous, the federal government recently decided that it was time to take a pause to allow the economy to digest the unprecedented population growth binge of the past two years,” Stéfane Marion, chief economist at National Bank, said in an analysis.

He estimates population growth will significantly slow to 0.7 per cent during the 2025-2027 period from a projected 3.1 per cent increase in 2024, allowing the country to catch up in areas such as infrastructure and housing. However, he predicts regional differences and is calling for population growth in Alberta and Saskatchewan of 1.5 and 1.6 per cent, respectively, from 2025 to 2027.

Advertisement 5

Article content

The national forecast, while much lower than the past two years, still beats the average of 0.4 per cent population growth for members of the Organization for Economic Co-operation and Development, Marion said.


  • Today’s Data: Statistics Canada releases gross domestic product for April; U.S. personal income and spending 

markets
Financial Post

Recommended from Editorial


This couple doesn’t want to leave a large inheritance behind, but they also don’t want to spend their money willy-nilly. With that in mind, they asked FP Answers to help them figure out, in as tax-efficient a manner as possible, the best ways to de-accumulate their assets for the three phases of their retirement: the Go-Go phase, the Slow-Go phase and the No-Go phase, while also meeting their goals for annual income as they age.

Advertisement 6

Article content

Read financial expert Allan Norman’s answer here.


FP Answers

Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you wondering how to make ends meet? Drop us a line at [email protected] with your contact info and the general gist of your problem and we’ll try to find some experts to help you out while writing a Family Finance story about it (we’ll keep your name out of it, of course). If you have a simpler question, the crack team at FP Answers led by Julie Cazzin or one of our columnists can give it a shot.


McLister on mortgages

Want to learn more about mortgages? Mortgage strategist Robert McLister’s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Read them here 


Today’s Posthaste was written by Gigi Suhanic, with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at [email protected].


Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here.

Article content