Canada adds a record 108,700 jobs in April

Tavia Grant

Canadian companies are hiring in force again, a sign that the country is weaning itself off government stimulus.

The job gains point to a recovery with self-sustaining momentum as consumers with new paycheques spend and stronger demand encourages businesses to hire further. The mounting crisis in Europe and the turmoil in financial markets, however, are reminders that Canada’s economy isn’t in a vacuum and could temper any sense of optimism.

“The private sector is clearly beginning to hire in a big way in Canada, and in an important way in the U.S. as well, which suggests that it’s simply not true that this recovery still relies on the artificial stimulus of government spending,” Douglas Porter, deputy chief economist at BMO Nesbitt Burns, said in an interview. “Unfortunately, the confidence angle might be attacked because of what’s happening in global financial markets.”

While the latest jobs report from Statistics Canada Friday led to renewed speculation that Bank of Canada Governor Mark Carney would raise interest rates from their record low levels next month, that is by no means a done deal, given the unpredictability of Europe’s mess and the volatility in markets that it’s helping to fuel. Should the central bank tighten in June, policy makers are likely to take a slow and measured approach, economists said.

“This is underscoring that the world’s troubles are not entirely in the rearview mirror,” Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce, said in an interview. “The lesson of 2009 for Canada was what happens outside our borders clearly matters.”

Canada’s economy churned out a monthly record number of jobs in April, Statistics Canada said, as employers added 108,700 workers and the jobless rate dipped a notch to 8.1 per cent. Most of the gains were in the private sector, led by men and youth in the construction, retail and building services sectors, with a split between full and part-time work.

While some economists questioned the sustainability of the improvement, what’s beyond dispute is that the economy has created jobs for four straight months, at an average pace of 32,000 new positions since last August. April’s surge brings total gains since the start of the labour market’s recovery in July to 285,000 people – meaning the economy has recouped two thirds of the total jobs lost during the recession.

And hiring is now under way in virtually every province.

Peter Niclasen, who lost his job as a finance manager in late 2008 as Canada was pulled into the global downturn, spent more than a year searching for work, only to find few postings. Finally, through word of mouth, he landed what he calls his dream job in late March.

“It feels like being alive again,” said Mr. Niclasen, who is now controller at Multivans Inc., a company in Bolton, Ont., that makes truck bodies. “It’s very tough being in transition. Actually being wanted and needed at a great company – I’d say that’s what life is all about.”

The jobless rate could actually creep higher again as more people are encouraged to return to the labour market in search of work. That dynamic helped push the U.S. jobless rate up to 9.9 per cent in April from 9.7 per cent, the U.S. Labour Department said Friday.

For now, sectors from retail and wholesale trade to construction and information, culture and recreation are in hiring mode, as are pockets of the technology sector.

About 2,000 tech jobs are currently waiting to be filled in the Waterloo, Ont., region in the next six to 12 months, said Iain Klugman, head of Communitech, an industry group. The openings range from software engineers to quality assurance and sales and marketing positions.

But in a sign that companies remain cautious, many jobs remain contract-only, said Jim Geraghty, president of the professional networking group Happen.

“Companies are wanting to ‘test drive’ you before they commit to a permanent position,” he said.