Canada’s Metros Reversed the Recession at Record Speed

It’s no secret that while there was still a definite downturn in the Canadian economy between 2007 and 2009,  Canada wasn’t affected nearly as much as our neighbours to the south. While we’ve looked at some isolated stories about the way different industries and provinces have responded to the great recession, we haven’t given the broader picture much thought until now. There’s recently been a great deal of attention given to the rates at which different American cities are rebuilding their economies, leading to The Atlantic’s piece on Houston and our follow-up response. To get an idea of how Canadian cities are doing, we decided to run the same data analysis on Canada’s 33 CMAs, or census metropolitan areas.

The immediate question we had when we looked at job change for Canada’s CMAs from 2008 to 2013 was “what recession?” When The Atlantic graphed out how many of the jobs they had lost in the recession America’s top 10 MSAs had regained since then, the chart looked like this:

There’s an obvious statistical gap between the set of cities we looked at in the US and those we’re looking at in Canada. While MSAs and CMAs are roughly equivalent, the US has far more large cities than Canada. As a result, we limited our US research to the 50 largest MSAs, to keep our tables manageable. There are only 33 CMAs in Canada, however, which means that we’re including a number of cities much smaller than those in the US analysis. With a population of about 170,000, for example, Abbotsford-Mission wouldn’t find its way into the top 100 cities in the US (let alone the top 50), but it’s No. 23 in Canada. As a result, some of the percentages look more drastic than those in the US table.

When we did the same process for Canada, the results were wildly different. Notice that not one of the top eight CMAs has failed to completely recover the jobs it lost in the recession (here, a value of 100% means breaking even with where the economy was in 2008). In fact, none of them have added less than 130% of the jobs they lost – Vancouver’s 134% recovery was actually the lowest of the eight. Only two of them have failed to add twice as many jobs as they lost. In the US, Houston was an exceptional case for adding 230%. In Canada, that same recovery would put it squarely in the middle of the pack:

And it’s not as if the cities that outdid Houston had the advantage of only losing a few jobs to the recession, either. Edmonton lost 2% of its workforce, and Calgary lost almost 4%.

Getting an accurate sense of how each metro has recovered from the recession requires taking not one but two data points into account; the back and forth of the pendulum, if you will. For the percentages in the last table to be meaningful, we have to know how significant a decline each city had suffered prior to beginning its recover. Recovering 600% of the jobs lost is much more impressive in a CMA that lost 10% of its workforce than it is for a CMA that only lost a few thousand jobs. These are the metros that lost the most jobs from 2008 to 2009:

And these are the metros that have added the most jobs since 2013:

Interesting to note the ways in which the two lists do and don’t overlap. Toronto, unsurprisingly, is both the biggest loser and the biggest gainer. Edmonton turns out to be the winner in the Battle of Alberta; both far fewer jobs lost than Calgary and a much, much higher growth rate since ’09 thanks to those northern Alberta oil fields. Overall, there’s a sense that most of Canada, outside of the largest cities, suffered moderately in the recession and then quickly returned to about the same position it was in before.

Look, for example, at this chart, where we’ve compared the losses of the 21 CMAs that lost jobs from ’08 to ’09 against the gains they’ve made since then. The blue bars represent the job change from 2008 to 2009, while the red represent the overall change from 2008 to 2013. By showing it this way, the range between the far left value and the far right shows us the percentage of 2008 jobs that have been regained since 2009 more accurately than looking at growth rates since 2009 would (click to view larger):

All but one CMA (Moncton is the holdout) has gained more jobs since the recession than it lost in the downturn. That’s impressive. The question that will be asked immediately, though, is what kind of jobs have been being added to the economy, and if they’re as good as the jobs that were lost in the downturn. To figure that out, we’ve looked at the five fastest-recovering CMAs to see which three industries lost the most jobs in the downturn, and which three have added the most since then. Looking at earnings data for these industries should help us get a better picture of how the recovery has gone from the working individual’s perspective.

We’ve defined the top five CMAs for this ranking by how many more jobs they’ve added since 2009 than were lost from 2008 to 2009; how much they’ve “recovered.” For a sortable table of how all of Canada’s CMAs have done since 2008, including both this metric and actual growth rates for 2008-09 and ’08-13, see the bottom of the page.

Note also that EMSI data for earnings is available only for 2012. Thus figures for 2008-09 refer to the earnings potential in 2012 of jobs lost in 2009.

1. Edmonton (66,696 new jobs)

Recession losers:

• Residential building construction (1,323 jobs lost). Avg. earnings: $52,688.
• Agricultural, construction and mining machinery manufacturing (1,126 jobs lost). Avg. earnings: $71,936.
• Building finishing contractors (1,061 jobs lost). Avg. earnings: $55,865.

Recovery leaders

• Employment services (6,897 jobs added). Avg. earnings: $54,320.
• Support activities for mining and oil and gas extraction (4,692 jobs added). Avg. earnings: $84,644.
• Architectural, engineering, and related services (4,128 jobs added). Avg. earnings: $68,333.

Edmonton’s recovery has been remarkably strong, thanks to the oil and gas economy. While in most markets seeing employment services at the head of the pack would seem less than promising, Edmonton’s temp jobs are earning eye-popping wages, since most of them are presumably still in oil and gas.

2. Toronto (60,428 new jobs)

Recession losers:

• Employment services (9,945 jobs lost). Avg. earnings: $33,377.
• Motor vehicle parts manufacturing (6,306 jobs lost). Avg. earnings: $51,156.
• Plastic product manufacturing (4,879 jobs lost). Avg. earnings:$48,394.

Recovery leaders:

• Full-service restaurants (7,116 jobs added). Avg. earnings: $18,153.
• Limited-service eating places (5,448 jobs added). Avg. earnings: $18,009.
• Elementary and secondary schools (4,967 jobs added). Avg. earnings: $59,822.

Things are less rosy in Toronto, where much of the initially promising job growth has come from minimum-wage restaurant jobs that are hardly a replacement for the well-paid manufacturing jobs lost to the recession.

3. Calgary (32,880 new jobs)

Recession losers:

• Architectural, engineering and related services (4,062 jobs lost). Avg. earnings: $88,315.
• Oil and gas extraction (3,994 jobs lost). Avg. earnings: $154,557.
• Support activities for mining oil and gas extraction (2,130 jobs lost). Avg. earnings: $116,564.

Recovery leaders:

• Universities (6,365 jobs added). Avg. earnings: $57,788.
• Architectural, engineering and related services (5,260 jobs added). Avg. earnings: $
• Support activities for mining and oil and gas extraction (4,283 jobs added). Avg. earnings: $116,564.

Calgary’s managed to recover jobs in the same industries that suffered the most four years ago. The only difference is, it’s added significantly more than it shed; twice as many jobs added as lost in oil and gas extraction support activities, for example.

4. Montreal (26,752 new jobs)

Recession losers:

• Employment services (3,131 jobs lost). Avg. earnings: $29,743.
• Rail transportation (2,446 jobs lost). Avg. earnings: $70,092.
• Scheduled air transportation (2,123 jobs lost). Avg. earnings: $58,362.

Recovery leaders:

• Provincial and territorial public administration (6,534 new jobs). Avg. earnings: $54,206.
• Full-service restaurants (3,725 new jobs). Avg. earnings: $18,911.
• Management of companies and enterprises (3,294 new jobs). Avg. earnings: $58,787.

Montreal is an interesting case, and exactly the opposite of Calgary, with no overlap between where the losses and gains are. Again, low-paying restaurant jobs are prominent in the mix, and government jobs are rarely a sign of a healthy economy. But increasing corporate management suggests that there are still companies growing, even if none of them are as prominent as one might hope.

5. Ottawa-Gatineau (25,164 new jobs)

Recession losers:

• Employment services (2,585 jobs lost). Avg. earnings: $43,139.
• Local, municipal and regional public administration (2,357 jobs lost). Avg. earnings: $49,664.
• Communications equipment manufacturing (1,720 jobs lost). Avg. earnings: $86,376.

Recovery leaders:

• Local, municipal and regional public administration (2,105 new jobs). Avg. earnings: $49,664.
• Limited-service eating places (1,879 new jobs). Avg. earnings: $15,413.
• Universities (1,703 new jobs). Avg. earnings: $49,215.

Hardly a surprise to see government jobs at the crest of the wave in Ottawa, in both directions. But new jobs at fast-food restaurants are a shoddy replacement for losing 1,700 communications equipment manufacturing jobs that earned $86,000 a year.

Overall, Canada’s CMAs appear to be something of a mixed bag; in some areas, but not nearly all, the new jobs added since the recession have been as good as those lost to the downturn. In many areas, too, the growth has come in new industry sectors, which is exciting from an economic standpoint. From a human perspective, though, it suggests that many of Canada’s urban workforces may be playing catch-up, trying to find employment in industries for which they lack experience. Even with this rapid recovery, the spectre of the skills gap continues to haunt Canada’s economy.

Data for this post came from Analyst, EMSI’s online labour market data tool. For more information on what Analyst can do for your college or business, contact Fraser Martens. Follow us on Twitter @DesktopEcon.