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The monthly unemployment rate is one of Canada’s most closely watched indicators of economic well-being. In 2006, the unemployment rate continued to be a good news story, as it hovered around a 30-year low, thanks largely to strength in industries such as mining and oil and gas extraction as well as construction.

The average unemployment rate over the course of 2006 was 6.3%, down from 6.8% in 2005. Employment rose 1.9% in 2006—the fourteenth straight year of job growth in Canada. As most Canadians receive most of their income from a job, paid work is a cornerstone of our society and economy, and having a job is a priority for many of us.

Six provinces set 30-year low unemployment rates in 2006. In all the western provinces, the rate was under 5.0%; it generally increased from Ontario (where it was 6.3%) heading east, with the highest rate, 14.8%, in Newfoundland and Labrador.

Canada’s labour force participation rate—the proportion of working-age Canadians who had a job or were looking for one—remained at 67.2% in 2006.

Women driving employment growth

The employment picture varies based on characteristics such as sex and age. For example, adult women (aged 25 and older) made strong gains in 2006. They accounted for nearly half of all employment growth that year. Over the course of 2006, the proportion of adult women who were working hit a record high of 58.3%, pushing their unemployment rate to 6.1%, below that of adult men (6.5%).

Youths, those aged 15 to 24, have also seen an improved labour market in recent years. Their unemployment rate fell to 11.6% in 2006, the lowest rate since 1989.

The effects of the baby boom are being seen in the participation rates of workers aged 55 and over, as more boomers reach that age. In 2006, 30.5% of Canadians in that age group had jobs, and their numbers increased 5.1% from 2005. The number of workers under 55 rose just 0.9%.

Aboriginal people have typically not fared as well in the labour force as non-Aboriginal people. In 2006, the unemployment rate for Aboriginal people living off reserves in the four western provinces was 9.8%, compared with 4.0% for the non-Aboriginal population.

Where the jobs are: Natural resources, the western provinces

Almost all industries gained jobs in 2006. The strongest proportional gains were posted in mining and oil and gas extraction, professional, scientific and technical services, business, building and other support services; finance, insurance, real estate and leasing; construction; educational services; health care and social assistance; and wholesale and retail trade. Only manufacturing and utilities lost jobs. Ontario continued to feel the loss of manufacturing jobs, which have declined by 130,000 in the province since the sector’s peak in 2004. There were strong gains in mining, oil and gas extraction and construction in Alberta, Saskatchewan and British Columbia.

Manufacturing, despite recent job losses, is still the second-largest employer in Canada, behind the wholesale and retail trade industries. Nevertheless, a continuing shift away from jobs in the goods-producing industries to those in services is occurring.

As for occupations, the largest group of Canadian men work in trades or as transport or equipment operators. The most common occupations for women are in sales and services. The trend toward self-employment seems to have levelled off—reaching a peak of 17.1% of workers in 1997, but settling down to 15.2% in 2006.

Changing work hours

We have yet to reach the lives of leisure that some futurists predicted last century. In fact, after having declined steadily since 1994, the average work week for full-time employees rose in 2005 for a second straight year.

But the recent rise is not necessarily a bad thing—it is one indication that the hot labour market is almost at capacity. Employers unable to find more staff are giving more work to their existing employees.

Labour shortages may be one reason why the proportion of people working part time has been declining in recent years, reaching 18.0% in 2006, down from 18.8% in 2002. Most job growth has been in full-time work. In 2006, over 9 out of 10 jobs created were full time. To meet their growing labour needs, some sectors have converted some part-time positions to full-time jobs. Among those working part time, most do so because they are attending school or out of personal preference.

Wages on the rise

The tightening labour market has pushed up wages. In 2006, total labour income grew by 6.1%, well above the inflation rate of 2.2%. Employees’ average hourly wage was $19.72 in 2006, compared with $15.59 in 1997. When inflation is taken into account, that meant a 4.8% average increase.