Alberta unemployment rate likely to be a staggering 27%

The Business Council of Alberta says Alberta’s unemployment rate is likely much higher that what Statistics Canada reported on Thursday.

StatsCan reported that officially the unemployment rare in the province rose from 7.2 per cent to 8.7 per cent in March, with the steepest employment declines coming from the accommodation and food services, wholesale and retail trade, information, culture and reaction and health care and social assistance.

“A reported unemployment rate of 8.7 per cent seriously underestimates the reality in Alberta because the labour force survey took place just as the economy was shutting down. Based on all the data we’ve seen this week, our estimates indicate the true unemployment rate in Alberta today is likely three times that – a staggering 27 per cent,” said Mike Holden, Chief Economist at the Business Council of Alberta, in a news release.

Since March 15, an estimated 4.26 million Canadians have applied for temporary income support through Employment Insurance or the Canada Emergency Response Benefit.

“That is almost four times the number of job losses reported in March. Under the modest assumption that Alberta accounts for a proportionate share of those applications, we estimate that over 490,000 Albertans are out of work,” said the Council.

“Hidden behind the headline numbers in today’s jobs data, the actual situation is even worse. Nearly 87,000 Albertans gave up looking for work. Of those who said they still had a job, more than 325,000 reported working zero hours. And based on the number of Canadians seeking income support, we can estimate that April’s job numbers will paint an even grimmer picture.”

The Council  is a non-partisan, non-profit organization dedicated to building a better Alberta within a more dynamic Canada. It is composed of the chief executives and leading entrepreneurs of the province’s largest enterprises.

StatsCan said on Thursday that employment fell by more than one million in March (-1,011,000 or -5.3 per cent in Canada.

The federal agency said the employment rate—or the proportion of people aged 15 and older who were employed—fell 3.3 percentage points to 58.5 per cent, the lowest rate since April 1997.

The unemployment rate increased by 2.2 percentage points to 7.8 per cent, the largest one-month increase since comparable data became available in 1976, it said, adding that unemployment increased by 413,000 (+36.4 per cent), largely due to temporary layoffs.

Alberta’s unemployment rate jumped from 7.2 per cent to 8.7 per cent in March as the province also lost 118,400 jobs on a year-over-year basis, said StatsCan.

“We knew it was coming, but it’s still shocking to see the initial effects of the effort to contain the spread of COVID-19 on employment,” said ATB Financial’s Economics & Research Team in its daily economic update The Owl.

“There were 117,100 fewer jobs in Alberta in March than in February—a drop of 5.0 per cent. The next largest monthly drop over the 531 months of the current data series was 1.1 per cent in May 1982.

“The unemployment rate did not jump as much as you might think because many people who wanted a job were not looking for one due to business closures or containment efforts. (To be counted as “unemployed” you have to be actively looking for work.)  Alberta’s labour force contracted by 86,900 people (3.5 per cent) in March. As with total employment, this drop is unprecedented over at least the last four decades. The next largest monthly decline in Alberta’s labour force was 1.0 per cent in October 1984.

“Not surprisingly, the largest job losses occurred in accommodation and food services (-27.9 per cent), information, culture and recreation (-25.8 per cent) and wholesale and retail trade (-8.1 per cent).”

In the Calgary census metropolitan area, the unemployment rate rose from 7.4 per cent to 8.6 per cent in March as employment fell by 17,100 month-over-month and by 23,500 year-over-year.

In the Edmonton census metropolitan area, the unemployment rate increased from 7.8 per cent to 7.9 per cent as employment dropped by 21,200 month-over-month and by 27,500 year-over-year.