Canadian job insurance claims surge
Published: August 20, 2015
Updated: July 24, 2018
Author: Luke Jones
CATEGORY: Industry News
The weakened Canadian dollar triggered by lower oil prices has spread negatively to the labor market with job-insurance claims rising to a near six year high through the month of June.
Through that month there were 266,010 renewed or first-time claims for unemployed insurance throughout Canada, a rise of 5.1 per cent from the month of May. The data was provided by Statistics Canada on Tuesday.
Year-on-year the unemployment insurance claims rose 6.5 per cent, a sizeable amount over a 12 month period. That hike in claims is attributed to a 42.3 per cent spike in Alberta, which is the financial heart of Canada’s energy sector and was the most affected by spiralling oil prices.
In Ontario, the most populated province in the country, there was also a sharp rise of 19.7 per cent through June compared to May. British Columbia rose by 9 per cent through the same period.
Job insurance claim statistics are used to indicate how many potential people will look to seek unemployment benefits, although it is not a defining factor. The numbers tend to be lagged in Canada, hence why June’s figures are only available now, and the jobless claim report is not as well monitored as its United States counterpart.
As for overall unemployment, the number of Canadians seeking benefits rose 1 per cent 531,700, with Alberta again leading that hike with a 7.7 per cent rise in out of work citizens.
The Canadian economy has been a slump due to a slip in commodity prices, with the nation’s crude oil and the falling price within the industry causing concern for investors. With a lagging economy and a weakening dollar, jobs are usually affected and the latest claims numbers suggest that is the case again. Jobs are often seen as a strong indicator for the state of an economy and a 5.1 per cent rise in claims from May to June matches Canada’s overall gross domestic product shrinkage during the first five months of 2015.
Companies have cut spending, which in turn leads to job cuts. However, despite a worrying job insurance claim rise, it seems as though unemployment rates are holding steady, sitting at 6.8 per cent over the last six months and over that time Canada has added 103,000 new jobs.