Canada’s disappointing job losses raise red flag

This past week, Canada received more bad news on the economic front with a significant number of job losses in July.
The Canadian economy shed 30,000 jobs last month and the unemployment rate edged up to 7.3 percent, which is the same level it was at a year ago.
Economists were expecting a gain of about 6,000 jobs for the month and for the unemployment rate to remain steady.
In Ontario, the job market remained stable, but the unemployment rate rose two-10ths to 7.9 percent as more people began looking for work.
It is never good practice to look at one or even a few months’ worth of data to draw concrete conclusions about the future. It’s absolutely true that we must take a wider view of the world we live in over time so that we can develop a strategy or plan to help struggling Canadian industries and families cope during difficult times and to position themselves for the future.
However, monthly reports can serve as an indicator—and last month’s report is a big “red flag” that something could be going wrong here.
Canada is a trading country and the health of our export markets quickly is deteriorating. Europe, China, and, to a lesser degree, the United States all are struggling to maintain growth. Britain, Italy, Greece, and France all have entered the second half of a double-dip recession.
China is not immune, either, as their industrial production has been slowing dramatically.
The U.S. actually may be considered a bright spot in the global economy with economic growth and job growth outpacing Canada’s over the last year.
Challenges remain in the U.S., though, as we’ve seen with yet another banking scandal at J.P. Morgan and continued weakness in the housing market.
So where does this leave Canada moving forward? It’s a fair question, but one that no one has the answer to at the moment. However, I’m certain that our prospects are somewhat dimmer than the official Harper government line that our economy is “an island of stability in a troubled global economy.”
Remember, this is the same Conservative government that issued an “Economic Update” to Parliament in December, 2008 that said Canada would never enter a recession or run a deficit under Stephen Harper’s leadership.
Unfortunately, at the time of that update, Canada already was in recession and the Harper government has gone on to record the four largest deficits in Canadian history.
With the unemployment rate at the same level as 12 months ago, it is clear we need stronger job creation in order to keep wages rising, help us pay off our consumer debt, and to support our housing market.
We also must prepare for the global economic downturn by not just helping businesses, but also families and local governments prepare for what could be another difficult few years.
Unfortunately, the Conservatives already have dropped the ball on one major policy issue.
The decision by the Harper government to make Employment Insurance (EI) benefits harder to obtain for displaced workers while the economy is losing jobs could backfire on us badly. EI helps people looking for work, but also supports local economies when large local employers close or lay off some workers.
It also keeps those workers from seeking other forms of social assistance (i.e., welfare and subsidized housing) that are provided by local and provincial governments which are heavily in debt.
Add the Harper’s government’s silence on the decline of the manufacturing and forestry sectors, and recent severe agricultural difficulties caused by a long drought, and we soon could find ourselves with a “made-in-Canada” economic mess courtesy of the Harper Conservatives.
Last month’s bad jobs report is not the end of the world, but it should serve as a loud wake-up call for the Harper Conservatives.