A new report from Statistics Canada shows the country’s unemployment rate is near record low – and that’s a bad sign, according to a business and public policy expert.
Business professor Ian Lee told True North that Canada’s near record low unemployment rate – reported as 5% for the month of January – is a reflection of Canada’s struggling economy.
“There’s just massive, serious [worker] shortages,” he said.
“The [low] unemployment rate is because you’re hiring everybody that’s raising their hand.”
While low unemployment may sound like a good thing to most people, Lee said it’s a misleading figure, resulting from one specific burden on Canada’s economy.
“The unbelievable vacancy rate,” he said. “The largest ever in the history of Canada.”
Last May, Statistics Canada reported there were over a million unfilled positions in Canada – setting a record high.
The shortage fell to roughly 850,000 in the most recent data from November, but Lee says the problem isn’t going away soon.
“We’re no longer in the boomer half-century,” said Lee. “We are not in a period […] of significant labour excess. We are going to be, for the next half century, according to every forecast I’ve read, [in] massive labour shortages.”
“It’s changing everything.”
Lee said labour shortage is steering Canada’s unemployment rate to its recent record lows.
Last year, Canada set two unemployment rate records: the first for its lowest annual rate (5.3%), and the second for its lowest rate in any given month (4.9%).
With respect to the country’s labour shortages, these numbers are not a good sign, according to Lee.
Not everybody agrees with him.
In a press conference on Monday, Deputy Prime Minister Chrystia Freeland cited the unemployment rate, among other stats, as a show of Canada’s prosperity.
“Canada is operating from a position of fundamental economic strength,” she said. “Our economy added almost 70,000 jobs in December, and our unemployment rate is at 5%, close to our record low.”
Canada set its record low unemployment rate last June, one month after setting its record high of over 1,000,000 job vacancies.
Since 1976, the annual unemployment average has been roughly 8.1%. The high was 12%, set in 1983, and the low was 5.3%, set in 2022.